Rewarding Irresponsibility: The Fall of Financial Integrity


Who, if anyone, is surprised that Mr. Stanford’s chapter unfolds in Madoff-ite fashion, politics and all? Who, if anyone, does not expect bailouts and partisan subsidies to continue, with justice thrown to the wind as evidenced in the expanding mortgage subsidy affair? Is there anyone not in high office who does not think the political ethic is now warped by supposed macro-financial imperatives? Is it true that morality is subservient to security during recessions and that personal honor means little if you can’t grow your assets?

When, if ever, has America witnessed the type of dispiritedness and dejection about economic morality that has arisen during the last several months? People — some of them almost lily white in their integrity until now — are beginning to excuse themselves in financial wrongdoing. This fall from good behavior is accelerating as the perception grows that in the evolving financial climate one falls far behind if one does not bend to greed and “me-first” thinking. Increasingly, people are concluding that financial integrity is a losing proposition. Indeed, Forbes magazine recently heralded this trend with the front cover header, “How to Cheat like a Pro”.

A national disaster that far overshadows the ‘Great Depression’ will occur if the national body politick remains infected with the idea that businesses and individuals should cheat the government because the government is cheating them. That kind of thinking leads to anarchy and a systematic dysfunctionality that robs nations of leadership and eventually brings empires to their knees. Yet, it is hard for people not to feel this way when government proclaims in heroic outbursts that it will subsidize the financially incautious, negligent and even reckless to restart growth and keep the day of economic reckoning at bay. Such duplicitous government might as well declare openly a policy of putting at competitive disadvantage the individuals and businesses that did the right things year after year. Why penalize the faithful? Why send power to the foolhardy who pushed too far? Such policy failures denote a government derelict of duty.

If the Obama administration is now culpable for spreading the disease, the Bush administration is all the more blameworthy. When, if ever, in American history has there been a redistribution of wealth so utterly unwarranted on moral terms than in the Bush administration’s capitulation to free market excesses? The reckless first decade of the 21st century makes the gilded years of the Roaring Twenties look like child’s play. If an unpalatable economic slump in those days served as an unfortunate but necessary remedy to a financial culture gone wild, what will be adequate to bring much needed sobriety today? Does the bailout and subsidy of irresponsibility get us there?

According to biblical tradition the prodigal son was forgiven by his father only after the boy had come to his senses far from home while competing in a pigpen for refuse scraps. Nowadays, we think people and banks will learn by being recapitalized before the pain grows intense. Nonsense. The determination of two administrations to prevent this nation from slipping into an economic depression as repayment for financial sins will set the stage for a balloon payment of apocalyptic proportions. When that ‘end-of-bubble payment’ comes due — the one consisting of moral as well as economic repayment — the collection agency will be a colossal Grim Reaper, the like of which has not been seen in modern history. This is the one that comes knocking not only for individuals but for nations well rotted in their souls.

What is there not to be understood about the moral delinquency of our government policies? By analogy, what we do now is similar to police officers replacing $150 speeding tickets with equally sized gift certificates for the stubbornly lead footed. Is there something in the Ivy League education or upbringing of privileged persons serving in the U.S. government that prevents their educated mind from seeing the conspicuous? It takes willful ignorance not to see that roads become unsafe if law enforcement officers reward irresponsible behavior rather than penalizing it. This is the “moral hazard” of our era. Only a grand delusion could prevent people from seeing the obvious. Perhaps, though, end of era delusions serve the purpose of allowing lawlessness to run its course, resulting in froward nations being gathered for universal war so that a new justice wrought by bloody upheaval can rob of financial and emotional security those who sought illegitimate safety in the riches of lawlessness.

The world will someday get better. Long-term optimism is warranted. But before it does, this nation will endure a tearing of its fabric and a shattering of the peace. The seeds are sown now for the “everyman for himself” episode which arrives after people lose hope in governmental redress of societal ills. There is good reason to expect anarchy in two waves.

The first wave of financial anarchy approaches soon. The government will lose more in tax cheating and proactive corporate write-downs than it gains in stimulus. Consequently, government will push for police powers in taxation, absolute identity protocols, and an end to the cash society. It will soon realize that it cannot get there without the greater powers of global government — a factor that will grease the skids as we slide into international plutocracy.

When national government is shown to have inadequate resources or answers for the problems at hand, we’ll turn to the power of the last resort — globally contrived deep pockets that become co-regents with the overarching government itself. While this top-down strategy may work for a few years, tensions, injustices and ecological imperatives will soon overwhelm the system, the root problems of greed and irresponsibility remaining unresolved. The decay of that fiasco will provide an environment conducive for apocalyptic experiences — such experiences as much an expression of the Almighty’s goodwill as an indication of his anger at unrequited wickedness. It will take nothing less than a sweeping overthrow to give Mother Nature a break and the responsible a chance to inherit the earth.

This picture need not be unsettling for those unafraid to walk higher roads. But it takes inspiration to walk the highways to the sun. Such inspiration is available even from Hollywood in unforgettable pictures like “The Inn of the Sixth Happiness” (1958) or “Mr. Smith Goes to Washington” (1939). Thus, if your financially unscrupulous neighbor or business colleague seems to be pulling ahead, walk your affections to another inn on life’s road.

We’re passing through an amazingly rapid period of world evolution. Most people are not going to possess in 2030 whatever they think they have title to today. The world is fast becoming so sickened by the greed and rascality of business and political leaders that a flame will be put to the whole infrastructure of ownership. On the backside of the chaos we’ll see capital assets and leadership responsibility redistributed, this time on a wholesome ethical basis that rewards responsibility and meritorious contribution to the public good in all reputable career fields. Capitalism and prudent market principles will be restored, this time on honorable grounds. The incredible electronic archiving of data already underway will provide ample societal memory to create a much more constructive distribution of stewardship over corporate assets. So let your prayers rise to the Universal Sovereign and be patient in doing productive things for honorable reasons. The sun will set on the wicked and the day of the good steward will dawn.