Vol. 22, No. 5,514 - The American Reporter - September 7, 2016

by Randolph T. Holhut
American Reporter Correspondent
Dummerston, Vt.
February 16, 2002
On Native Ground

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DUMMERSTON, Vt. -- Conservatives have been quick to dismiss the Enron collapse as a business scandal, rather than a political scandal. In a recent column in The Washington Post, Michael Tomasky made the case that it's neither.

"Enron is a values scandal, and specifically a conservative values scandal," wrote Tomasky, a political columnist for New York magazine. "Far from being an accident, the Enron affair is the inevitable culmination of20 years of agitation against government regulations, employee protections and other progressive policies that might have prevented, or at least softened, the blow," Tomasky writes.

"Even since Ronald Reagan took office, conservatives have treated nearly all regulations as manacles on corporate behavior, rather than safeguards against corporate misbehavior. While it had help from Democrats, the GOP in particular conflated its conservative philosophy of government with a conservative moral code, while creating an environment of corporate permissiveness in which an Enron was bound to happen."

Conservatives have long had a stranglehold on the word "values." But few conservatives see the contradiction between their professed values of patriotism and social stability and the "everything is for sale" ethos of unfettered global capitalism where the only value is "maximizing shareholder value" by any means necessary.

Maybe conservatives can't see the contradiction because of their devotion to laissez-faire capitalism. For years, they have believed that the only appropriate role for the public sector was national defense. Government can't do anything else right, while the private sector can do no wrong -- especially if all those silly laws and regulations that inhibit the genius and creativity of the private sector are eliminated. But we all know what happens when corporate behavior is unchecked. History has shown us that economic collapse usually follows. Laissez-faire capitalism has never been successful in the long run. Sooner or later, the government has to step in to save the capitalists from themselves.

Historically, capitalism has always worked best when the concept of utility -- the greatest good for the greatest number -- is fully and fairly applied. When the workers, the managers and the owners all believe that the system is fair and democratic, everybody gets along. When the government regulates the markets to protect its players from their own greed, provides for the people for whom the free market doesn't work and makes laws that protect the health, safety and welfare of all citizens, everybody benefits.

This isn't a "way out" notion; this was the basic foundation of the American political and economic system known as democratic capitalism. But conservatives don't seem to realize that the combination of trickle-down economics, the weakening of government and public institutions and a social policy that punishes the poor while rewarding the rich is a recipe for disaster.

Unfortunately, liberals haven't been making much of a case for capitalism with a human face. They have allowed conservatives to portray them as being unpatriotic and immoral libertines while failing to point out that it was liberalism that gave us Social Security and Medicare, the 40-hour work week and the minimum wage, the G.I. Bill and the Civil Rights Act and cleaner air and water, just to name a few things that most Americans think are great ideas.

Economist John Kenneth Galbraith once said that "economic justice can be measured by the screams of anguish from the very rich." The very rich and corporations both have screamed at every proposal over the past century that would benefit the many at the expense of the few. They fail to see that they have ultimately benefited every time that government saved capitalism from its worst excesses and promoted economic growth for all.

Until its collapse, Enron profited in an atmosphere of deregulation. It could give millions of dollars to politicians to get laws rewritten to help make it easier to do business. It could lie to investors about the true financial condition of the company. It could open hundreds of secret offshore subsidiaries to hide its debt and avoid taxes. It could manipulate the energy markets to rip off consumers for billions of dollars in inflated electric rates. It could do all these things secure in the knowledge that nothing bad would happen. And Enron probably would have gotten away clean, had their lies not caught up with them.

Even more alarming is that Enron isn't the only one caught cheating. According to Business Week, investors have lost more than $200 billion in the last six years as a result of 783 audit failures at firms that overstated their profits. In an atmosphere where disinformation rules,can any investor have complete confidence in the markets?

Much as the free marketeers and laissez-faire economists would liketo think it, the laws of human nature haven't been repealed. Men still aren't angels, and self-regulation doesn't work when you have people whotry cheat, lie and manipulate the markets for profit. The collapse of Enron shows the folly of this thinking and more than that, points out the need for a return to effective public regulation of markets.

Randolph T. Holhut has been a journalist in New England for more than 20 years. He edited "The George Seldes Reader" (Barricade Books).

Copyright 2016 Joe Shea The American Reporter. All Rights Reserved.

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