-Caveat Lector-
~~for educational purposes only~~
[Title 17 U.S.C. section 107]
Bush and the Money Changers
by Llewellyn H. Rockwell, Jr.
For all the talk about corrupt CEOs who betray
their stockholders, it's time we consider the
problem of power-mad politicians who betray the
voters.
With or without criminal penalties for CEOs, the stock
market is brutal in its propensity to punish companies
with shady management. What means is there to punish
governments with leaders who do everything contrary to
what they promised in the election?
In his campaign, Bush promised a humble foreign policy,
smaller government, freedom for enterprise, and free
trade. In practice, he was been a big-government
warmonger who has massively increased the power of the
consolidated state and topped it off with brazen
protectionism.
From a moral point of view, it is no different from a CEO
hired to build a company who then turns to destroy it a
very rare occurrence in a market economy because such
behavior is not rewarded. But because there is no market
to buy and sell presidents only the crude, fickle, and
vacuous opinion poll there is no real way to register
displeasure and thus very little accountability.
Imagine if the market for CEOs worked like a presidential
election. Imagine there were two huge cartels for CEOs
called the reds and the blues. Every four years, each team
picked one person they deem appropriate to run a
company. The stockholders of that company in turn
could vote, but the vote would be was rigged in such a
way that either a red or a blue would always win.
Of course candidate red and candidate blue would be
very pleased to say whatever is necessary to get elected
as CEO. Once one of them is in power, he knows that he
will maintain power until the next election, scheduled four
years hence, and, in the meantime, there is nothing that
anyone can do to dislodge him from that post. In fact, he
has the power to shut up, audit, smear, harass, and even
jail anyone who objects too strenuously to the things he
does.
What is to keep this CEO from using his position, not to
help the company, but to help himself and his friends? In
four years, he knows that he can wash his hands of the
whole thing. Obviously, this is a prescription for business
corruption on a massive scale. Maybe if we christen this
system economic democracy and kept it around for 100
years, we would get used to it, but that wouldn't change
the reality.
Of course the analogy is far from exact. Under this
system of choosing CEOs, there would be some standard
by which to evaluate his performance, stemming from the
marketplace. In government, there is no such standard, so
the possibilities for corruption are far greater. In fact, we
shouldn't be surprised that government deprived of all
financial incentive for accountability, with no standards of
profit or loss, where the goal is to reward your friends,
punish your enemies, and grab whatever power you can
for yourself while hoping to be rewarded in the history
books for having presided over some fabulous domestic
and international calamity would operate like a "jungle in
which only the unscrupulous survive," a power-grabbing
"free-for-all guided only by greed."
But wait a minute! Those are the words that George W.
used to describe the currently existing market economy.
More precisely, he said this is what the market economy
would amount to were it not for the glorious power of the
state. We are spared that fate, he says, thanks to his new
edict that adds criminal penalties for corporate fraud.
Perhaps it is only a symbolic gesture but it is a powerful
one: it seems designed to taint all of business life with the
suspicion that criminality and commerce are somehow
closely related.
"No boardroom in America is above or beyond the law,"
he said, but he might have added that the lawmakers
themselves consider themselves above and beyond this
law or any law. "Those who deliberately sign their names
to deception will be punished," he said, leaving out that
this is precisely what happens every time he signs a
budget or a law, or Congress votes.
"In the aftermath of September 11," Bush said concerning
a violent attack on a profit-making center, "we refused to
allow fear to undermine our economy and we will not
allow fraud to undermine it either�. No more easy
money for corporate criminals. Just hard time�. This law
says to every dishonest corporate leader, you'll be
exposed and punished. The era of low standards and
false profits are over."
Bush himself brags that the new laws are the "most
far-reaching reforms of American business practices
since the time of Franklin Delano Roosevelt." It is not a
bad analogy. FDR ran on a platform of cutting
expenditures by 25 percent, ending deficits, reducing
federal salaries, assuring a sound currency, protecting
states rights, and keeping the peace. And when he
governed, he did exactly the opposite.
FDR's first inaugural provided the tone for this recent
series of Bush speeches. Note how FDR and Bush are
highlighting the same alleged problem (corporate
corruption), diagnosing the downturn in the same terms
(as a loss of confidence in business), and proposing the
same solutions (national planning to curb business):
The rulers of the exchange of mankind's goods have
failed, through their own stubbornness and their
own incompetence, have admitted their failure, and
abdicated. Practices of the unscrupulous money
changers stand indicted in the court of public
opinion, rejected by the hearts and minds of men�.
Stripped of the lure of profit by which to induce our
people to follow their false leadership, they have
resorted to exhortations, pleading tearfully for
restored confidence.� The money changers have
fled from their high seats in the temple of our
civilization. We may now restore that temple to the
ancient truths�. The joy and moral stimulation of
work no longer must be forgotten in the mad chase
of evanescent profits.�. There must be an end to a
conduct in banking and in business which too often
has given to a sacred trust the likeness of callous
and selfish wrongdoing. Small wonder that
confidence languishes, for it thrives only on
honesty, on honor, on the sacredness of obligations,
on faithful protection, on unselfish performance;
without them it cannot live�. [T]here must be an
end to speculation with other people's money�.
Our international trade relations, though vastly
important, are in point of time and necessity
secondary to the establishment of a sound national
economy. This I propose to offer, pledging that the
larger purposes will bind upon us all as a sacred
obligation with a unity of duty hitherto evoked only
in time of armed strife.
FDR was demonizing business for two reasons: to
distract from the reality that the growing Great Depression
was a complete failure of government, not of the market,
and to consolidate power in the US in the same way it
was being consolidated in Italy, Germany, and Russia,
and with the same rhetoric against the commercial class.
Hitler on the cause of the collapse of the Second Reich,
Mein Kampf:
[M]oney became more and more of a God whom all
had to serve and bow down to. Heavenly Gods
became more and more old-fashioned and were laid
away in the corners to make room for the worship
of mammon. And thus began a period of utter
degeneration which became specially pernicious
because it set in at a time when the nation was more
than ever in need of an exalted idea, for a critical
hour was threatening. Germany should have been
prepared to protect with the sword her efforts to
win her own daily bread in a peaceful way.
Unfortunately, the predominance of money received
support and sanction in the very quarter which
ought to have been opposed to it.� In practice,
however, all ideal virtues became secondary
considerations to those of money, for it was clear
that having once taken this road, the nobility of the
sword would very soon rank second to that of
finance.� A serious state of economic disruption
was being brought about by the slow elimination of
the personal control of vested interests and the
gradual transference of the whole economic
structure into the hands of joint stock companies�.
In this way labour became degraded into an object
of speculation in the hands of unscrupulous
exploiters. The de-personalization of property
ownership increased on a vast scale. Financial
exchange circles began to triumph and made slow
but sure progress in assuming control of the whole
of national life.� The best evidence of how far this
�commercialization� of the German nation was able
to go can be plainly seen in the fact that when the
War was over one of the leading captains of
German industry and commerce gave it as his
opinion that commerce as such was the only force
which could put Germany on its feet again.
Josef Stalin, December 27, 1929:
We could not permit dekulakization as long as we
were pursuing the policy of restricting the exploiting
tendencies of the kulaks, as long as we were unable
to go over to a determined offensive against the
kulaks, as long as we were unable to replace the
kulak output by the output of the collective farms
and state farms. At that time the policy of not
permitting dekulakization was necessary and correct.
But now? Now things are different. Now we are able
to carry on a determined offensive against the
kulaks, break their resistance, eliminate them as a
class and replace their output by the output of the
collective farms and state farms. Now,
dekulakization is being carried out by the masses of
poor and middle peasants themselves, who are
putting complete collectivization into practice. Now,
dekulakization in the areas of complete
collectivization is no longer just an administrative
measure. Now, it is an integral part of the formation
and development of the collective farms.
Consequently it is now ridiculous and foolish to
discourse at length on dekulakization. When the
head is off, one does not mourn for the hair. There
is another question which seems no less ridiculous:
whether the kulaks should be permitted to join the
collective farms. Of course not, for they are sworn
enemies of the collective-farm movement.
Hitler, Stalin, and FDR eventually got their real armed
strife, which solidified their power. The first two are seen
today as criminals. But FDR, rather than go down in the
annals of history as a criminal betrayer and looter, is
treated by historians as the model and ideal of a
president, a man who disregarded traditional standards of
public service to seize power in a time of national
emergency. Every president since has hoped to be so
highly regarded by history.
Murray Rothbard argued that the core political struggle is
always the same: the great war of power on the market.
No dictator in at least a century has failed to demonize the
commercial class. Corporations on the front lines of the
market side of things often forget what is at stake. But
Bush's unrelenting war on the market reminds us that
government never really forgets what is at stake.
It remains true today as it did in fascist Italy, socialist
Germany, New Deal America, and socialist Russia:
freedom has no greater opponents than those who
despise and demonize commercial society. Today, it's
not the money changers but the power-mongers who
need to be thrown out of the temple.
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