Another lifetime ago - by which I mean sometime during the year 2000 - I remember seeing the cover of a magazine, Time or Newsweek, asking, "Are you rich yet?" Or words to that effect. Those were heady times. The point of the story was that people were becoming millionaires at such an unprecedented rate that even the notion, "millionaire," was becoming meaningless as a signifier of having "made it." That wasn"t all. Also embedded in this giddy piece of journalism was the idea that if I, the consumer of this piece, wasn"t rich yet myself, there was something wrong - with me.
This, at least, is what I took away from the piece. And, at the time, within the context of what seemed like an endless economic boom, a period that was proving history didn"t matter, when every day it seemed like we heard about somebody else who had just scored big in the markets, it was easy to conclude that if we ourselves weren"t participating it was because we were too lazy, too fearful or too stodgy to seize the day.
Seeing that magazine cover made me feel like a dope.
What a difference two years can make. First came Enron. Then Tyco. And Worldcom. Move over Halliburton, make room for Qwest Ö Arthur Andersen has left the building.
Suddenly, some people who thought they were rich, aren"t.
The immediate reaction, from no less a beneficiary of shady accounting practices than the president himself, has been to call for increased penalties for corporate malfeasance. President Bush would double the length of prison time for those convicted of capitalist crimes. In an attempt to link the Hollywood action movie motif that seems to inform and inspire his thinking about policy with things financial, Bush has also called for a "SWAT team" of corporate watchdogs to monitor the actions of rogue accountants.
These moves, it is hoped, will shore up public confidence in the markets. Restore the trust necessary to encourage people to invest their money in American business. Nothing, it is said, is wrong with the system; it"s the "corporate culture" or a few "bad apples" that are to blame for this debacle.
There"s the rub. Punishing a few transgressors won"t begin to get to the core of this very American problem. From the early 1980s through 2000, Americans fed on the idea that anybody could be a millionaire. Wealth seemed to be an ever-expanding condition that, we were assured, would eventually envelop us all. If you doubted it, there were plenty of companies ready to give you credit cards so you could spend against that day your ship sailed in.
Americans would much rather entertain the idea of expanding wealth than redistributing it. In the "80s and "90s, for all the talk of the "liberal media," you had to look hard to find anyone willing to so much as suggest that redistribution of wealth from haves to have-nots might be an option. This, in spite of the fact that between 1989 and 1997 the inflation adjusted income for middle-class Americans grew just $285. Or that the number of middle-income workers with some form of employer-provided health insurance fell during this period, leaving almost 30 percent of the middle class without coverage.
The fact that only a small fraction of Americans actually shared in the recent boom"s wealth creation mattered less than the prospect of, if not riches, a secure and, hopefully, sooner-than-later retirement. Indeed, people were so stung by the wealth expansion bug, many even began to think that Bush"s scheme to turn Social Security over to the same financial "planners" that have brought us to this current pass was worth thinking about for more than a Wall Street minute. Once again, American capitalism exerted its uncanny ability to get people to redirect legitimate feelings of resentment about the system into self-recrimination. Those of us left out of the boom had only ourselves to blame.
Now, we find that the highly selective wealth expansion of the "80s and "90s was a paper chase. As author Kevin Phillips has pointed out, it was during this period that the basis for previous expansions, making, growing and transporting things, was supplanted by what he calls financialization: the processes of money movement, securities management, corporate reorganization and other forms of financial packaging. Phillips adds, "The 1980s and 1990s have imitated the Gilded Age in intellectual excesses of market worship, laissez-faire and social Darwinism. Notions of commonwealth, civic purpose and fairness have been crowded out of the public debate."
It"s been remarked that, during the 1930s, Franklin Roosevelt saved the American capitalist system by instituting an array of policies that regulated and reformed it. At the time - and to this day - critics on the right have claimed that what he did amounted to socialism. Call them what you will, Roosevelt"s programs resuscitated not just an economy but a society that was coming apart through the same cocktail of personal greed and civic neglect we see today.
Many, of course, also say that Roosevelt"s recovery would have been short-lived without our entry into World War II and the subsequent boost a war footing brought to American industry. War, by this calculus, can be a dark panacea, distracting us from a variety of ills by making us focus on one, big crisis. Though George Bush, Inc. and his cabinet appear ideologically ill-equipped to make sweeping changes akin to Roosevelt"s New Deal, they are more than eager to embrace Pearl Harbor - and to hell with the cost. So as bears growl on Wall Street, the drums beat louder for the head of Saddam Hussein.