Much of the Christian Century Network blog conversation over the last year or so has been about the need for a new economic ethos in the United States, one that is based on honest productivity, fair compensation tied to real contributions, equitable distributions of compensation that mitigate against extreme differences between the very highly compensated and everyone else, and a national character that is not driven by unwarranted consumerism.
The recent news of a $3.44 billion second quarter for Goldman Sachs combined with their announced bonus pool of $11.36 billion is a troubling, but not unexpected, sign that things may not be headed as hoped for. There seems to be some mystery, and more than a little suspicion, about how they generated that $3.44 billion in earnings. Was it from the expansion of credit to small and medium size businesses? Or was it from some financial version of three card monte? And how does one generate over $11 billion in bonuses from $3 billion in earnings? Moreover, exactly who would be eligible for a share, and what did they do to earn it? In related news it has been reported that the banking industry is gearing up for a fight to kill the Consumer Financial Protection bill that would, among other things, make contracts for loans and credit cards simple and easy to read.
The point is that an industry’s corporate culture based on engineered duplicity and greed does not come easily to a conversion experience. They live and succeed in a world governed by greed, and however many of their colleagues go to jail for malfeasance simply culls the herd of competition and sharpens the taste buds of their avarice.
The easy thing to do would be to lay all the blame on Wall Street, but that would be unfair and self-deluding. Goldman Sachs and other investment bankers provide a necessary service that makes the ebb and flow of credit possible; the very ebb and flow of credit that allows main street shops to stay in business, new startups to borrow the capital they need, houses to be built an cars to be bought. There is nothing wrong with that. We need it. But couldn’t they do that with less greed driven compensation?
If we look a bit closer it becomes obvious that most of us play by the same rules that we condemn on Wall Street. We actually lust after the debt laden over consumption that we abhor when we are not a part of it. Economic recovery, to many, means getting back to building millions of oversized, overpriced houses, and inefficiently manufacturing cars in too many plants, selling them through too many dealerships, and plying us with ads encouraging inappropriate use of predatory consumer credit to keep it all going.
The virtues of a more ethical society that we so highly praise would mean more new kinds of jobs at less extravagant wage and salary levels producing a wider variety of products and services of more utilitarian value in smaller lots. Population shifts might result in a greater distribution of people into more modest cities located in more environmentally sustainable areas. These are not changes that we are likely to endorse in real life. They could mean the loss of jobs and products we are used to. Cities in unsustainable places such as L.A., Los Vegas, New Orleans and the like could become much smaller. Credit cards would be harder to get. Houses would be less expensive, probably smaller, and one would have to have a decent down payment to get in. A flatter corporate structure would mean less opportunity for income potential as a rising corporate bureaucrat. That might make teaching, family medicine, general farming and the like more attractive as long term careers. Who wants that?
The fact is that we are inclined to go along with a more authentic, transparent and equitable private enterprise based economy until we see that unique opportunity to slam dunk our neighbor and gain an unassailable competitive advantage. Then the old game is on again in a rampage of legal but morally questionable greed driven consumerism.
Maybe we are on a path that will not go in that direction. I hope so. But it will not be a comfortable path for some, and it may take a full generation to become comfortable with a new and better way of being American.