Brooklyn Broadside: It’s Not Just Wall Street

March 21, 2012 Brooklyn Eagle Staff

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By Dennis Holt

“Every individual … generally neither intends to promote the public interest, nor knows how much is he promoting it. He intends only his own gain.”

This statement was not made by an avowed Socialist nor by a Occupy Wall Street person. It was made by the person considered to be the father of modern capitalism, Adam Smith.

The following statement was made by Franklin Roosevelt in 1937: “We have always known that heedless self-interest was bad morals: we now know that it is bad economics.”

These two statements, made almost 200 years apart, come as close as any to summarizing what has happened to our economy these past several years.

These thoughts stem from the remarkable confession, indictment, or mea culpa from Greg Smith, an officer with Goldman Sachs, in his recent op-ed piece in the New York Times. One of his statements sounds almost mild: “To put the problem in the simplest terms, the interest of the client continued to be sidelined in the way the firm operates and thinks about making money.”

It was almost like he was quitting because Goldman Sachs wasn’t playing fair. In truth, almost all of Wall Street hasn’t been playing fair for a very long time, and the intoxication of making money and even more money, by any means, almost brought on a world-wide collapse. In truth, we came very close to that collapse.

Hardly a day has passed for years now, when somebody else goes to jail, is indicted, or gets out of jail for financial malfeasance and for failing to serve the public interest.

And it isn’t just greedy Wall Street or traditional corporate America that we have to be concerned about. The new corporate America — the product of Silicon Valley — bears close watching too. Writing in the March 12 issue of Newsweek, Rob Cox issues this warning:
“The truth is, it’s increasingly tough for the establishment of Silicon Valley to argue that their business is any less evil — or does any more good — than the bulk of corporate America. Underneath the haughty language of moral superiority lies the same profit motive that drives all business — and a ruthlessness rivaling history’s greatest industrial bullies.”

And where has contriteness gone? The very people who brought us this mess are fighting every effort to monitor matters and to prevent this from happening again. They argue that rules will harm the free market system, but the market system hasn’t been “free” in a long time. More of the same isn’t the answer.