In one of the more memorable television commercials of the go-go nineties, a New Economy electricity industry spokesman asked "why", when confronted by "stodgy old politicians who were refusing to deregulate utilities–on the deluded and elitist grounds–that they know what’s best for them." The now infamous Why ask Why? ads from Enron Corporation were one of a series that propounded the "revolution" in entrepreneurial thinking demanded by the new economy. "TV commercials celebrating the subversive power of those who ‘ask why’, which was said to be ‘the chosen word of the nonconformist’" (citation from One Market Under God).
Some 70-75 years ago, sociologist Thorsten Veblen railed against the "commercial sabotage" of a similar group of entrepreneurs, the "predator business tycoons" that led the 1920s into the speculation and crash of 1929, and a decade-long depression. Today’s re-run of the Teapot Dome scandal, replete with White House intrigue and oil barons plotting the midnight drilling of public oil reserves, destroying the lives of thousands of workers and robbing millions of investors (including pension trusts) and energy consumers, is but one viral strand of an mass epidemic of really evil runs on the public trust.
Many of the nation’s blue bloods and business leaders have been hard at work in the middle of the night, like little financial Jeffrey Dahmers, leaving their carnage stored like partial bodies under floorboard. Con artists at several other corporations such as Global Crossing have bilked billions and devastated workers. Enron’s "entrepreneurial" auditor Arthur Anderson is busy scraping together hundreds of millions of dollars to settle the rip-off of almost $700 million from elderly church ladies in the Arizona Baptist Foundation ponzi scheme, not so long after settlements on Waste Management and Al Dunlap’s Sunbeam. Brokers and bankers from Cleveland to New Jersey have been shifting hundreds of millions offshore, to a magical secret island where all of the bloodthirsty corporate cannibals have been planning to rendezvous and party like it’s still 1999, in some devilish bacchanalian hootenanny.
But many of the "New Economy" schemes were pulled off in broad daylight. Wall Street and New Economy venture entrepreneurs have been behind many of the dot-com bubble shake-downs, the emerging markets speculation, the mergers that manufactured golden parachutes and gold-lined management fees, the massive public dollars lifted in the derivative scams. They learned much from the savings-and-loans swindlers and junk-bond kings of the 1980s. The early century robber barons seem almost paternalistic today; while richer in comparative terms, they at least (a) produced products (b) produced most of their products in the U.S., (c) developed, over time (if after long fights) relationships with unions, and (d) opened libraries, hospitals and universities. Maybe their actions were only a result of laws and societal pressure. .
These guys today are making a run on the piggy banks of our nation (private assets) and the candy store (public treasury) that is massive in scope, and it has only been building in intensity, sophistication and comprehensiveness through the years. Federal regulators have been bought off for so long they can put up only the flimsiest of inquiries. Political leaders have been compromised. The investment houses are complicit. Corporate boards are interlocked and locked-in for ill-gotten profits. Who the hell is watching the store?
If writers have employed hyperbole to embarrass the crooks, and yet their rhetoric seems to be falling short, it may be because the system has been cooked for so long, there is no shock value left. "Thousands screwed and laid off" has been published so many times, it doesn’t mean as much to the public as it once did. As Arthur Levitt, the former Chairman of the SEC said about the Enron situation, the capital markets have failed.
And, partly due to the bursting of these speculative bubbles, the global economy crashed in 2001, continuing into 2002. Over two million workers have lost their jobs due to the downturn, and a large numbers of industries have been closed, seriously damaged or are in bankruptcy. Much of this damage is permanent, with one-half of the steel industry in bankruptcy. It adds hundreds of thousands of previously jovial new economy sector people-including technology, communications, transportation and services employees– to the ranks of more sober blue-collar workers, who have watched slow-motion de-industrialization for years. Entire communities dependent on some of these industries have lost their employment base, and replacing the jobs lost is a long-term and uncertain prospect.
In other news, a war is being waged now on four-five fronts, while the Congress is playing catch up to stay "in the loop". Many innocent Americans and Afganis have died since September.
While over 3,000 Americans died horribly on September 11, the effects of increased dislocation on social stress could lead to an increase of premature mortality rates of 5.3% due to heart disease, and 3.1% due to stroke, for every 1% increase in the unemployment rate. Given the fact that the rate increased at least 1.5% since the end of 2000, it is possible that 20,000-30,000 additional deaths may result over a two-year period. If this is a slow, jobless recovery, as predicted in many quarters (and job loss continues after recovery), the additional damage to health and the increase in predicted crime would be considerable.
In the country, families are fearful for their children who are stationed overseas in the creeping mission that is the war on terror and the evil ones; insecure both about their personal futures and about the direction of the country, in many cases having had their retirement savings reduced; worried about the wrecking of the environment and the continuing erosion of sovereignty due to unfettered global trade pacts; and, in some cases, upset and cautious about the increased invasions of privacy and "politically correct" speech and thought that characterizes the new Homeland Security measures to ensure support for the war. Professors and journalists who have asked questions have been censored or lost their jobs, and activists have been detained and de-railed from travel plans.
The "capital markets" have absolutely failed, Arthur, and the one thing that a new generation of "predatory business tycoons" have been good at producing is the extraction of assets from great colonies both domestic and abroad. Whether it’s the relatively miniscule proceeds from a retired teacher’s 401(k) or the prospect of oil in mid-south Asia hunting grounds, the extraction schemes are steadily producing, day and night.
Meanwhile, a whole new generation of workers and families, too, are taking to the road, searching out new hopes and leaving behind the lost dreams of their lives, like the "New Poor" of dislocated blue-collar workers in the ’80s, and some of our grandparents and great grandparents in the great depression. This time, its not just blue collar, but also educated people who slaved away at their jobs in the ’90s, confident that their stock options and 401s gave them motivation to work 60-80 hour weeks, and the chance to succeed like their parents never imagined.
The optimistic jauntiness and entrepreneurial hubris of the great gatsby ’90s has given way to fear and loathing, and a lot of uncertainty. Even if the feel-good media can convince the public that the economy has recovered, it will be a long time before people are convinced it’s safe to come back out and play. It has been, and is, indeed, the year of living dangerously.
© 2002 T.W. Croft
T.W. Croft is Director of the Heartland Labor Capital Network, managed by the SVA. Heartland has commissioned Working Capital: The Power of Labor’s Pensions, recently released by Cornell University Press. Visit www.heartlandnetwork.org for more information. He can be reached at: email@example.com