No word, it seems at first, could better explain the deepening financial crisis that currently threatens the stability of the market as a whole. As the finger pointing begins in earnest, the pundits and politicians have filled the airwaves with stories of unscrupulous lenders, devious speculators and inattentive government regulators.
 |
Jon Corzine, Democratic Governor of New Jersey and former CEO of Goldman Sachs, has blamed the White House for failing to “to protect the public.” Independent presidential candidate Ralph Nader called for a series of new regulations and Congressional investigations into the “greed and lack of regulation that is shaking the foundations of Wall Street.”
Even John McCain, a multimillionaire with seven houses and a lifelong advocate for deregulation, has made the battle against “Wall Street greed” the centerpiece of his recent speeches.
The fact of the matter is that what the ruling class labels “greed” during an economic crisis they celebrate as “genius” when everything is running smoothly. The ability to cut costs and wages, to squeeze the consumer for every possible buck, to pass off financial risks, to expand as quickly and as far as possible, to buy low and sell high, to find the loopholes that allow a company to turn profits into super-profits—these are the traits necessary for any successful capitalist.
Greed—the excessive desire to acquire more than what one needs—is the ground on which Wall Street is built. Investors at each corporation have one responsibility when they arrive at work in the morning: to maximize shareholder profits. They do not ask the shareholders how much they “need.” They do not stop working when they personally have acquired what they personally need. They do not set for themselves a limit on how much they can make. They always need more.
It is not hard to see why the capitalist system would naturally avoid regulation. The capitalist system seeks government intervention only when it feels weak. As soon as it regains its feet, it begins to fight and evade restrictions, dynamically developing new ways to exploit workers and maximize profits. Without an economic crisis bearing down, the capitalists regain their strength and the ruling class gradually loses its will to self-regulate.
Ralph Nader and others whose final aim is to make capitalism “work” believe that the current crisis was “born from deregulation” and was “totally preventable.” But this crisis was born from an overproduction of housing. The capitalist class poured trillions into the housing market in the search for ever-greater profits to remain competitive. A Wall Street executive would not have to be individually greedy to be held to this same law.
This is the absurdity of the system. Workers now face widespread layoffs, cutbacks, and the loss of savings for no fault of their own, but because they produced more houses than could be sold at a profit. The entire history of capitalism is of such booms and busts. As the crisis of stagflation showed in the 1970s, capitalist downturns can easily happen in the context of government regulation. The normal and legal forms of capitalism produce crises of overproduction and lead to reckless speculation.
We have no doubt that many on Wall Street are exceedingly selfish. And yes, the bankers who have plunged the working class into misery should be put on trial, just like the Bush administration officials who directed the Iraq war.
But individual selfishness does not explain the economic crisis any more than the cold-bloodedness of military commanders explains the bombing of Baghdad. Over a million Iraqis died not because of the character flaws of Pentagon generals; they have fallen victim to a system addicted to war as a means to secure natural resources and profits.
We, of course, advocate for a wide range of regulations to protect workers. Every economic disaster hits working people—those who have never traded a stock or participated in boardroom decisions—the hardest. There should be a moratorium on all foreclosures and evictions and a massive public works program to create good-paying jobs. But there’s no hope in regulating the private banks and corporations into becoming good banks and corporations. As long as they remain in private hands, they will work for their private interests.
This crisis, in other words, is not an example of “casino-style capitalism” gone wrong, as Ralph Nader suggests. Capitalism itself is always a casino—in which the lives of workers are wagered, the game is rigged, and the house always wins.
