Two Responses to Greed-American Style

Evangelist Jim Wallis is mad as heck:

The financial collapse of Wall Street is the fiscal consequence of the economic philosophy that now governs America — that markets are always good and government is always bad. But it is also the moral consequence of greed, where private profit prevails over the concept of the common good. The American economy is often rooted in unbridled materialism, a culture that continues to extol greed, a false standard of values that puts short-term profits over societal health, and a distorted calculus that measures human worth by personal income instead of character, integrity, and generosity.

Americans have a love-hate relationship with government and business. The climate seems to shift between an “anything goes” mentality and stricter government regulation. The excesses of the 1920s, leading to the Great Depression, were followed by the reforms of Franklin Roosevelt.

The entrepreneurial spirit and social innovation fostered by a market economy has benefited many and should not be overly encumbered by unnecessary or stifling regulations. But left to its own devices and human weakness (let’s call it sin), the market too often disintegrates into greed and corruption, as the Wall Street financial collapse painfully reveals. Capitalism needs rules, or it easily becomes destructive. A healthy, balanced relationship between free enterprise, on the one hand, and public accountability and regulation, on the other, is morally and practically essential. Government should encourage innovation, but it must also limit greed.

Economist Paul Krugman has a few reactions to the proposed bailout:

. . . if the government is going to provide capital to financial firms, it should get what people who provide capital are entitled to — a share in ownership, so that all the gains if the rescue plan works don’t go to the people who made the mess in the first place.

That’s what happened in the savings and loan crisis: the feds took over ownership of the bad banks, not just their bad assets. It’s also what happened with Fannie and Freddie. (And by the way, that rescue has done what it was supposed to. Mortgage interest rates have come down sharply since the federal takeover.)

But Mr. Paulson insists that he wants a “clean” plan. “Clean,” in this context, means a taxpayer-financed bailout with no strings attached — no quid pro quo on the part of those being bailed out. Why is that a good thing? Add to this the fact that Mr. Paulson is also demanding dictatorial authority, plus immunity from review “by any court of law or any administrative agency,” and this adds up to an unacceptable proposal.

I’m aware that Congress is under enormous pressure to agree to the Paulson plan in the next few days, with at most a few modifications that make it slightly less bad. Basically, after having spent a year and a half telling everyone that things were under control, the Bush administration says that the sky is falling, and that to save the world we have to do exactly what it says now now now.

But I’d urge Congress to pause for a minute, take a deep breath, and try to seriously rework the structure of the plan, making it a plan that addresses the real problem. Don’t let yourself be railroaded — if this plan goes through in anything like its current form, we’ll all be very sorry in the not-too-distant future.

Obama on Economic Justice

Today I joined 18,000 neighbors at a the Key Arena to see Barack Obama. The stadium was a multicolored sea. From my perch in the nosebleed section, the packed stadium resembled an enormous multi-colored braided rug, the kind they sell in the Land's End catalog. When the "wave" came through, it was like a strong wind ruffling the human rug.

It was thrilling, to say the least.

And so was Barack Obama. His wide-ranging speech was constantly interrupted by roars of approval, and only later, in this video was I able to catch all his words. I recommend watching the whole thing if you have time.

I found this particularly interesting:

"I believe in the free market, I believe in entrepreneurship, and I believe in capitalism. It is the most dynamic economy ever devised. But when CEOs are making more in 10 minutes than ordinary workers are making in a year, and it's the CEOs who are getting the tax breaks and ordinary workers are left holding the bag, something is out of balance."

"We need to restore a sense of balance in our country . . . . if you work in this country, you should not be poor."

Here are some startling statistics:

In 2006, 36.5 million people were in poverty, and 35.5 million Americans lived in "food insecure" households, 22.8 million adults and 12.6 million children. On any given night in America, anywhere from 700,000 to 2 million people are homeless, according the National Law Center on Homelessness and Poverty.

Poverty in America is considerably higher today than it was in the 1970s and children are especially affected. The U.S. lags behind other developed countries in this area. While Denmark and Finland lead 26 participating OECD (Organization for Economic Cooperation and Development) countries with child poverty rates below 3 percent, Mexico and the United States are at the other end of the spectrum, both with child poverty rates of more than 20 percent.

The above is from this article decrying the media's silence about this issue.

I'm glad our candidates are talking about economic justice.

I'd like to know what you think about it.