Greed is not a virtue

Greed is Not a Virtue by David Koren of Yes! Magazine

We humans are living out an epic morality play. For millennia humanity’s most celebrated spiritual teachers have taught that society works best and we all enjoy our greatest joy and fulfillment when we share, cooperate, and are honest in our dealings with one another.

But for the past few decades, this truth has been aggressively challenged by a faith called market fundamentalism—an immoral and counter-factual economic ideology that has assumed the status of a modern state religion. Its believers worship the God of money. Stock exchanges and global banks are their temples. They proclaim that everyone does best when we each seek to maximize our individual financial gain without regard to the consequences for others.

In the eyes of a market fundamentalist, to sacrifice profit for some presumed social or environmental good is immoral. The result is a public culture that proclaims greed is a virtue and sharing is a sin.

Having established control of the institutions of the economy, media, education, government, and even religion, market fundamentalists initiated a global social experiment to test their theory. The results are now in.

The prophets of the older faith traditions were right. Our common future depends on rediscovering their truth and redefining our public culture and governing institutions accordingly.

The following are some of the more visible elements of Wall Street’s global campaign of moral perversion.

• It uses control of media outlets, advertising, and politicians to shape and spread a global culture of individualistic greed, material self-indulgence, ruthless competition, and moral irresponsibility.
• Through the pursuit and celebration of financial gain at any cost, it provides role models for immoral behavior.
• It undermines democracy and the legitimacy of government by buying politicians to do its bidding.
• It uses student loan programs to get the best and brightest youth mired in debts they can repay only by selling themselves to jobs that serve Wall Street interests.
• It buys up and monopolizes control of the world’s land and water resources in anticipation of extracting monopoly profits by charging what the market will bear as scarcity increases.
• It uses its financial power and creative accounting skills to manipulate markets and obscure market signals, as when helping governments hide their debt or helping corporate CEOs hide their insider bets against the future of their own companies.
• It buys the deeply discounted debt obligations of hapless underwater homeowners and countries on the open market and then demands full value payment from governments or philanthropists who step in to lend a helping hand to the afflicted.
• It puts in place global rules requiring that if a government introduces regulations that prevent a foreign corporation from harming or killing people with its toxic products or discharges, the country’s government must compensate the corporation for the profits it estimates it will lose.

By capitalism’s perverse moral logic, if a person sells toxic assets by knowingly misrepresenting them as sound, the fault lies not with the misrepresentation of the seller, but rather with the lack of due diligence on the part of the overly trusting borrower. When the assets prove worthless and threaten both the solvency of both the seller and the borrower, the logic says the party responsible for the misrepresentation has a moral obligation to demand redress from the government, “Buy my toxic assets at face value and make me whole so that I return to my trade in toxic assets, or I will be forced to stop lending and crash the economy.”

Step back to take in the big picture, and it turns out Wall Street market fundamentalists have proclaimed the seven deadly sins of pride, greed, envy, anger, lust, gluttony, and sloth to be virtues. In turn they have proclaimed the seven life-serving virtues of humility, sharing, love, compassion, self-control, moderation, and passion to be sins against the market.

There is a widespread sense that with Wall Street’s apparent recovery, the window of opportunity for serious structural change has passed. Such a judgment, however, is premature. Far from closing, the window of opportunity for serious change continues to widen as public awareness of Wall Street corruption grows and true and appropriate moral outrage builds.

Most psychologically healthy adults recognize in their heart of hearts the moral perversion of the old economy, but may fear to speak up because so many experts—including even some religious leaders—continuously assure us in so many words that greed is good, even that God wants us to be financially rich and financial wealth is a mark of God’s favor.

If all who share a mature moral consciousness find the courage to speak the simple truth that greed is driving us to collective self-destruction and cooperation is essential to our common salvation, we can put the perversion behind us and secure the future of our children.

While I don't share his assertion that the "prophets of the older faith traditions" had the right idea in general, I understand what he is saying. The concepts of common good and moderation have been turned into socialist mandates. Gluttony and selfishness are considered virtues. And our modern organized religions are at the front of the line of preaching a Rapture mentality that encourages consumption and fomenting of war. They will get what they wish ... an end to the world. But, they will be disappointed when there is nothing on the other side. Everyone has to understand that this planet, right here and right now, is both our Heaven and our Hell. It is what we make of it.

"We Americans are not usually thought to be a submissive people, but of course we are. Why else would we allow our country to be destroyed? Why else would we be rewarding its destroyers? Why else would we all — by proxies we have given to greedy corporations and corrupt politicians — be participating in its destruction? Most of us are still too sane to piss in our own cistern, but we allow others to do so and we reward them for it. We reward them so well, in fact, that those who piss in our cistern are wealthier than the rest of us. How do we submit? By not being radical enough. Or by not being thorough enough, which is the same thing." -- Wendell Berry

Tyranny of the Fortunate

"Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone." -- John Maynard Keynes

Is it any wonder that we've lost our way (not that we ever really knew "our way") when tragedy happens and the things we are worried about are our stock portfolios? Capitalism is broken. Our media is broken. People are broken.

Larry Kudlow Devalues Human Life With Japan Earthquake Freudian Slip

In these tough economic times, isn’t it nice to know that calamitous natural disasters needn't have an adverse affect on your investment portfolio? After the 8.9-magnitude earthquake in Japan failed to induce a market nosedive, CNBC’s Larry Kudlow expressed his relief in terms that seemed to appall even his fellow cheerleaders for capitalism: “The human toll here,” he declared, “looks to be much worse than the economic toll and we can be grateful for that.”

I detest the trolls that populate these channels and I detest the sheep that hang on their every word. Go and get real job. Build something. Make something. Help someone. Don't profit from the suffering of others. We need to stop rewarding people for just moving money around. Insurance agents, mortgage lenders, bankers, stock brokers, venture capitalists, CEO's ... my garbage man contributes more to society than you do.

"Advocates of capitalism are very apt to appeal to the sacred principles of liberty, which are embodied in one maxim: The fortunate must not be restrained in the exercise of tyranny over the unfortunate." -- Bertrand Russell

Reformers, My Ass

You ever get the feeling you've been cheated?

WASHINGTON - In one $85 billion (47 billion pound) fell swoop, the U.S. Federal Reserve may have wiped out what credibility it won resisting Lehman Brothers' rescue plea and opened its door to countless other companies to come calling for cash.

... By providing a massive loan to American International Group on Tuesday, just two days after refusing to use public funds to save Lehman Brothers from bankruptcy, the central bank also invited tough questions on how exactly it determined whether a company was too big to fail.

Between the $29 billion the Fed pledged to swing the Bear Stearns sale to JPMorgan in March, $100 billion apiece to rescue mortgage finance firms Fannie Mae and Freddie Mac, up to $300 billion for the Federal Housing Authority, Tuesday's $85 billion loan to insurer AIG and various other rescue deals and loans, taxpayers are potentially on the hook for more than $900 billion ...

"We're essentially continuing a system where profits are privatized and...losses socialized," Roubini said, adding that auto makers, airlines and other struggling businesses would no doubt be asking for government help too.

The government was hard pressed to say no to AIG because of concerns that its collapse would harm thousands of companies around the world and cause chaos in the $62 trillion market for credit default swaps, where it is a big player ...

But Roubini said instead of handing out money to firms that made bad bets -- which could inadvertently encourage more risky behaviour if companies think they have a safety net -- the government should be buying up mortgages and rewriting the terms so that households are not buried in debt.

And guess why we have unregulated credit default swaps? Just ask McCain economic adviser, Phil Gramm.

Of course, Mr. "Maverick", John McCain, will come bounding into town and march out propaganda that the Third Reich would have been proud of ("Original Mavericks"):

"We will never put America in this position again. We will clean up Wall Street. This is a failure."

And in a statement released by his campaign, McCain called for greater "transparency and accountability" on Wall Street.

If McCain wants to hold someone accountable for the failure in transparency and accountability that led to the current calamity, he should turn to his good friend and adviser, Phil Gramm.

... eight years ago, Gramm, then a Republican senator chairing the Senate banking committee, slipped a 262-page bill into a gargantuan, must-pass spending measure. Gramm's legislation, written with the help of financial industry lobbyists, essentially removed newfangled financial products called swaps from any regulation. Credit default swaps are basically insurance policies that cover the losses on investments, and they have been at the heart of the subprime meltdown because they have enabled large financial institutions to turn risky loans into risky securities that could be packaged and sold to other institutions.

... the Lehman fiasco--caused in part by the use of unregulated swaps--could lead to ruin elsewhere in the economy.

Gramm is responsible for the rise of the wild and woolly $62 trillion swaps market. And he was chairman of the McCain campaign and a top economic adviser for McCain--until he dismissed Americans worried about the economy as "whiners."

Not to be outdone with complete bullshit, hypocritical statements, Sarah Palin had to pipe in:

"John McCain and I will put an end to the abuses in Washington and Wall Street that have resulted in this financial crisis." She promised a McCain administration would "reform the way Wall Street does business."

... What neither she nor McCain has explained is how they plan to be able to reform Wall Street when they are being assisted by 177 lobbyists and the guy who greased the way to the current crisis with a backroom legislative maneuver.

... By the way, both McCain and Palin decried golden parachutes for CEOs. What might Carly Fiorina, a top McCain adviser and surrogate, think of that? She received a $21 million severance package when she was forced out as CEO of Hewlett-Packard, after her not-so-successful stint there--and the value of her golden parachute eventually reached $42 million.

People have different reasons for voting for someone. Social issues, patriotism, economics all come into play. And I'm generally reluctant to call into question someone's intelligence when analyzing why they've voted for a particular candidate. But, I just can't resist ... anybody that will vote for McCain/Palin for economic reasons (or any reason for that matter) is a complete moron and needs to have their head examined.

We Can't Even Shop Right

The Fall of the American Consumer
by Barbara Ehrenreich
How much lower can consumer spending go? The malls are like mausoleums, retail clerks are getting laid off and AOL recently featured on its welcome page the story of a man so cheap that he recycles his dental floss–hanging it from a nail in his garage until it dries out.

It could go a lot lower of course. This guy could start saving the little morsels he flosses out and boil them up to augment the children’s breakfast gruel. Already, as the recession or whatever it is closes in, people have stopped buying homes and cars and cut way back on restaurant meals. They don’t have the money; they don’t have the credit; and increasingly they’re finding that no one wants their money anyway. NPR reported on February 28 that more and more Manhattan stores are accepting Euros and at least one has gone Euros-only.

The Sharper Image has declared bankruptcy and is closing ninety-six US stores. (To think I missed my chance to buy those headphones that treat you to forest sounds while massaging your temples!) Victoria’s Secret is so desperate that it’s adding fabric to its undergarments. Starbucks had no sooner taken time off to teach its baristas how to make coffee than it started laying them off.

While Americans search for interview outfits in consignment stores and switch from Whole Foods to Wal-Mart for sustenance, the world watches tremulously. The Australian Courier-Mail, for example, warns of an economic “pandemic” if Americans cut back any further, since we are responsible for $9 trillion a year in spending, compared to a puny $1 trillion for the one billion-strong Chinese. Yes, we have been the world’s designated shoppers, and, if we fall down on the job, we take the global economy with us.

“Shop till you drop,” was our motto, by which we didn’t mean to say we were more compassion-worthy than a woman fainting at her work station in some Honduran sweatshop. It was just our proper role in the scheme of things. Some people make stuff; other people have to buy it. And when we gave up making stuff, starting in the 1980s, we were left with the unique role of buying. Remember Bush telling us, shortly after 9/11, to get out there and shop? It may have seemed ludicrous at the time, but what he meant was get back to work.

We took pride in our role in the global economy. No doubt it takes some skill to make things, but what about all the craft that goes into buying them–finding a convenient parking space at the mall, navigating our way through department stores laid out for maximum consumer confusion, determining which of our credit cards still has a smidgeon of credit in it? Not everyone could do this, especially not people whose only experience was stitching, assembling, wiring and packaging the stuff that we bought.

But if we thought we were special, they thought we were marks. They could make anything, and we would dutifully buy it. I once found, in a party store, a baseball cap with a plastic turd affixed to its top and the words “shit head” on the visor. The label said “made in the Philippines” and the makers must have been convulsed as they made it. If those dumb Yanks will buy this…

There’s talk already of emergency measures, like making Christmas a weekly holiday, although this would require a level of deforestation that could leave Cheney with no quail to hunt.

More likely, there’ll be a move to outsource shopping, just as we’ve already outsourced manufacturing, customer service, X-ray reading and R&D. But to whom? The Indians are clever enough, but right now they only account for $600 million in consumer spending a year. And could they really be trusted to put a flat screen TV in every child’s room, distinguish Guess jeans from a knock-off and replace their kitchen counters on an annual basis?

And what happens to us, the world’s erstwhile shoppers? The President recently observed, in one of his more sentient moments, that unemployment is “painful.” But if a pink slip hurts, what about a letter from Citicard announcing that you’ve been laid off as a shopper? Will we fill our vacant hours twisting recycled dental floss onto spools or will we decide that, if we can’t shop, we’re going to have to shoplift?

Because we’ve shopped till we dropped alright, face down on the floor.

Oh, how the mighty have fallen. We don't make the best cars. All our favorite actors are foreign. And now ... we can't even shop right! lol.

Well, this a mantle that I'd be proud of us losing. It might actually indicate that we are finally figuring out that an economy is not ran on encouraging people to buy stuff they don't need. The businesses that will survive are the ones that make things well, make them affordable and that make things that people need regardless of the economy. It's all about sustainability. Just because you can fool some poor sap into buying that 70 inch plasma TV that he doesn't need and can't afford, doesn't mean that you should. You'll say that the market will sort it out. A perfect market may. But not one inhabited with a bunch of morons like ours. Our market has producers whose only criteria is how much they can make and consumers whose only criteria is how much debt they can get into to keep up with the Jones's. There has to be a concept of common good. But, WAIT!, you will say. You might even quote Ayn Rand to me:

"America's abundance was not created by public sacrifices to "the common good", but by the productive genius of free men who pursued their own personal interests and the making of their own private fortunes." -- Ayn Rand

I'd probably agree with the free market types who say you can't legislate "common good". But at the same time, you can't have a government who actively encourages the exact opposite of common good. That's not a free market either. We're not living in some Ayn Rand fantasy world. How exactly is the market "correcting" anything when CEO's of companies that hemorrhage money are given $20 million golden parachutes? "Productive genius of free men", my ass.

"Win or lose, we go shopping after the election." -- Imelda Marcos

Stimulate this

Dumb, dumb, dumb. In typical Republican fashion, the President thinks the best way to get out of a problem is to spend your way out of it. The proposed economic stimulus plan suggests just that. That was his response to 9/11 and it's his response to an economic downturn. To be fair, it appears to also be the answer of our leading Democrats.

The people that will get the most are the ones that need it the least and that are likely to just save it. So, you've rewarded the rich, done nothing to help the economy and have effectively handed off a larger deficit to the incoming administration. Brilliant.

I'd gladly give every bit of refund that we would get if it would help move us closer to universal healthcare or to reduce our dependence on foreign oil. Instead of attacking the real causes of why people can't make ends meet, they've done a blatant attention-grabbing stunt to mollify the electorate and make the Republican candidates look better.

When are these idiots going to get it through their thick fucking heads that trickle-down doesn't work? We need a trickle-up policy. Until you lift people out of poverty, you are going to have an increasingly two-class society.

Now, someone I like a lot, Paul Krugman, has said all this better than me:

Published on Friday, January 25, 2008 by The New York Times
Stimulus Gone Bad
by Paul Krugman

House Democrats and the White House have reached an agreement on an economic stimulus plan. Unfortunately, the plan - which essentially consists of nothing but tax cuts and gives most of those tax cuts to people in fairly good financial shape - looks like a lemon.

Specifically, the Democrats appear to have buckled in the face of the Bush administration’s ideological rigidity, dropping demands for provisions that would have helped those most in need. And those happen to be the same provisions that might actually have made the stimulus plan effective.

Those are harsh words, so let me explain what’s going on.

Aside from business tax breaks - which are an unhappy story for another column - the plan gives each worker making less than $75,000 a $300 check, plus additional amounts to people who make enough to pay substantial sums in income tax. This ensures that the bulk of the money would go to people who are doing O.K. financially - which misses the whole point.

The goal of a stimulus plan should be to support overall spending, so as to avert or limit the depth of a recession. If the money the government lays out doesn’t get spent - if it just gets added to people’s bank accounts or used to pay off debts - the plan will have failed.

And sending checks to people in good financial shape does little or nothing to increase overall spending. People who have good incomes, good credit and secure employment make spending decisions based on their long-term earning power rather than the size of their latest paycheck. Give such people a few hundred extra dollars, and they’ll just put it in the bank.

In fact, that appears to be what mainly happened to the tax rebates affluent Americans received during the last recession in 2001.

On the other hand, money delivered to people who aren’t in good financial shape - who are short on cash and living check to check - does double duty: it alleviates hardship and also pumps up consumer spending.

That’s why many of the stimulus proposals we were hearing just a few days ago focused in the first place on expanding programs that specifically help people who have fallen on hard times, especially unemployment insurance and food stamps. And these were the stimulus ideas that received the highest grades in a recent analysis by the nonpartisan Congressional Budget Office.

There was also some talk among Democrats about providing temporary aid to state and local governments, whose finances are being pummeled by the weakening economy. Like help for the unemployed, this would have done double duty, averting hardship and heading off spending cuts that could worsen the downturn.

But the Bush administration has apparently succeeded in killing all of these ideas, in favor of a plan that mainly gives money to those least likely to spend it.

Why would the administration want to do this? It has nothing to do with economic efficacy: no economic theory or evidence I know of says that upper-middle-class families are more likely to spend rebate checks than the poor and unemployed. Instead, what seems to be happening is that the Bush administration refuses to sign on to anything that it can’t call a “tax cut.”

Behind that refusal, in turn, lies the administration’s commitment to slashing tax rates on the affluent while blocking aid for families in trouble - a commitment that requires maintaining the pretense that government spending is always bad. And the result is a plan that not only fails to deliver help where it’s most needed, but is likely to fail as an economic measure.

The words of Franklin Delano Roosevelt come to mind: “We have always known that heedless self-interest was bad morals; we know now that it is bad economics.”

And the worst of it is that the Democrats, who should have been in a strong position - does this administration have any credibility left on economic policy? - appear to have caved in almost completely.

Yes, they extracted some concessions, increasing rebates for people with low income while reducing giveaways to the affluent. But basically they allowed themselves to be bullied into doing things the Bush administration’s way.

And that could turn out to be a very bad thing.

We don’t know for sure how deep the coming slump will be, or even whether it will meet the technical definition of a recession. But there’s a real chance not just that it will be a major downturn, but that the usual response to recession - interest rate cuts by the Federal Reserve - won’t be sufficient to turn the economy around. (For more on this, see my blog at krugman.blogs.nytimes.com.)

And if that happens, we’ll deeply regret the fact that the Bush administration insisted on, and Democrats accepted, a so-called stimulus plan that just won’t do the job.

Paul Krugman is Professor of Economics at Princeton University and a regular New York Times columnist. His most recent book is The Conscience of a Liberal.