Latimer on Law

Why I Am A Capitalist

Outspoken advocates like me for responsible governmental regulation of commerce, as expressly provided for by the Constitution of the United States,  are frequently accused by ignorant wingnuts on the extreme political right of being "Commies" who "hate capitalism".  Typically, such invective originates with highly paid mouthpieces for America's corporate elite, like the 400 Million Dollar Man Rush Limbaugh.

     Who else but the corporate oligarchy could pony up  some Thirty Eight Million a year to a gasbag who spews toxic fumes into the political atmosphere in order to preserve their own continued right to pollute the air we breathe?  His dittohead listeners, maybe?  You mean the folks who are being laid off by the thousands from assembly lines, offices and retail stores all across America because of their unregulated "free market" capitalist ideology?  Or do you mean the middle class folks who've just lost all their retirement savings and the equity in their homes because of Bush's ideological deregulation of the financial markets? Yeah, right!

That kind of oligarchic "free market" perversion of capitalism, as practiced by hack GOP pols like Bush and preached by wingnut media hacks like Limbauh is what I hate -not "capitalism" per se. How about you?

     Now that the Democrats have regained control of Congress and the White House, Limbaugh and his fellow demagogues on "fair and balanced" Fox News are desperately trying to stifle any attempt to restore the "fairness doctrine."  That's the requirement, trashed during the Reagan administration, that requires licensed, limited band radio or television media to provide equal time in response to any expressly political statement they broadcast on the public airwaves.   They claim this would violate their corporate First Amendment right to free speech on the "free" broadcast stations they have monopolized, with corporate money and with the assistance of GOP deregulation, over the past several decades.

    So their First Amendment right to corporate "free speech" on licensed media, over public airwaves, somehow permits them to stifle the right of anyone who disagrees with them to be heard over the public airwaves  that they have monopolized through their superior economic power.  What are they so afraid of?  That we might actually get to hear the truth on our licensed  broadcast media for a change, instead of a constant barrage of their bought-and-paid-for ideological twaddle?  Or do they honestly believe, on "principle," that the First Amendment means only that "money talks," with megawattage, while the rest of us just have to shut up and listen?  Is that what you believe?

A.  I both practice and believe in capitalism in its truest sense.

     For the record, I am a capitalist both in theory and in practice.  I am a self-employed professional who pays my office rent and all expenses from my billings and then, after maintaining a responsible reserve, I take the rest of my income as profit.  That, people, is free enterprise capitalism in its purest form. 

     I do, however, have to operate my business under strict governmental regulation, starting with the Board of Bar Overseers and the rules of professional conduct it administers under force of law.  This includes a strict accounting for every cent of clients' money that passes through my escrow account.  Maybe Rush Limbaugh and his fellow travelers on Fox TV believe that's "socialism" and I shouldn't have to answer to the BBO or the IRS for anything.  You think?

     I have only worked in the public sector once, many years ago, while I was in high school. I played football for Lawrence High in Falmouth, and all us jocks got summer jobs working for the Park Department at a buck-and-a half-an-hour.  That was good pay back then, but we had to work hard for it, cutting grass, grading ball diamonds and clay tennis courts -imagine that, a little town like Falmouth could afford to maintain real clay infields and tennis courts!  That was way back in the dark old days -before Reagan's "morning in America."  We also cleared a lot of brush to create walking trails in public parks -real brush clearing, hard work, and not the kind of phony photo op dumb show Bush was so fond of putting on when he was pretending to be a regular guy at Crawford Ranch.

     I know what real work is in the private sector, too.  I spent several years in the ‘sixties, after graduating from high school and dropping out of art school,  before entering college,  just "finding myself."   During that time I worked at a variety of hourly jobs, including wooden boat worker, dishwasher, busboy, delivery truck driver, artists model, factory worker, and building maintenance worker.  I also hitchhiked across America solo, from San Francisco to New York, during this period.  After I startedcollege in 1968 I began working summers as a taxi driver, another unsalaried job where my income depended directly on the amount of money I took in, both as commissions and tips.

     I've been a practicing lawyer since 1975 and for most of those years, since 1978,  my income has been determined directly by the amount of money I take in.  If I have no income in a given quarter, I just have to tighten my belt or maybe borrow from the bank if I haven't retained enough in reserve.  I don't go to Congress asking for a bailout with no strings attached -and I have never felt a compelling need to travel by private corporate jet anywhere.

     From my varied work history and life experiences, continuing to this day as a local public official for the past twenty-five years or so, as well as being an avid reader of a variety of newspapers and magazines -unlike the rising GOP starlet Sarah Palin, I can claim an informed understanding of how American society works in practice.  From my many years as a sportsman, fishing, canoeing, camping in the Adirondacks and running a 21-foot power boat all over Nantucket and Vineyard Sounds,  from Green Pond to Nomans Island to Wasque and back to East Falmouth, with occasional forays to Horseshoe Shoals or Cuttyhunk, I am imbued with an informed understanding of and profound appreciation for our precious natural environment, from the seashore to the mountain forests.

     From my eclectic college education, as well as keeping abreast of current events, I have developed a reasonably  informed understanding of the historical events and philosophical movements that have shaped our society, our politics and our economy.  Most significantly, however, from my professional education and work experience I can claim an informed understanding of how our secular Constitutional democracy is supposed to work, through a government of laws based on a system of checks and balances, and not through the dictates and dishonest manipulations of any golf-playing, corporate M.B.A. "Decider" like George W. Bush.

B.  I do not "hate" capitalism, but I detest the perversion of honest capitalism through the concentration of vast wealth in a corporate oligarchy, and its intended subversion of our Constitutional democracy, in the name of "free market" capitalism.

     So, no, I don't "hate capitalism," and anyone who says I do only betrays his own ignorance and venality -two qualities that go hand in hand with the likes of Limbaugh and his fellow travelers on Fox TV.   What I detest is the rise of corporatism as a dominant political force in America. It is an oligarchic force which has used all manner of fear mongering and jingoistic chicanery, through inordinate media access based on wealth, to put its two henchmen Bush and Cheney in the White House and keep them there for eight years as the country has been brought to its knees by their corrupt and inept "free market" ideology.

     This is not a criticism of the legal fiction known as incorporation.  I am a Main Street capitalist,  and despite my appreciation of Ambrose Bierce's cynical definition of a corporation as "an ingenious device for obtaining individual profit without individual responsibility", I recognize the importance of letting individuals incorporate in order to protect their personal assets against the risk of business liabilities.  That's the only way the mom and pop businesses, like my neighbors here on Falmouth's Main Street, could ever get off the ground -and that's how incorporation, as a legal fiction, is supposed to work.

     Corporatism on the other hand, is the accumulation of vast wealth in closed socio-economic units, now multi-national in scale, which are legally recognized as "persons," and are therefore permitted to use vast sums of money through Political Action Committees (PACs), with special  pleading , to influence both political and economic trends in society.  It is an inherently anti-democratic movement designed to concentrate all wealth in the hands of the very few, i.e. an oligarchy, while keeping the middle class and the working class in perpetual debt as they are "trickled on" with just enough of the national cash flow to keep the system working.  

     That, in case you still haven't noticed, is exactly what was happening in America over the past eight years of the Bush administration's misgovernance -until the inevitable crash in 2008.  The chief engine for the corporate elite's amassing vast wealth, with an exponential increase in the wealth and income gap between them and the middle class over the past eight years, has been not only the Bush administration's favorable tax treatment of corporate profits, but its criminally negligent, ideological deregulation of both industry and finance.

C.  The primary engine for the corporate oligarchy's assault on both our Constitutional democracy and our economy has been the anti-government, "free market" ideology that has driven the GOP since the Reagan presidency and has caused the economic collapse of 2008 after the Bush administration's eight years of Reaganomic deregulation.

     An early sign of the impending economic collapse was the Enron scandal in 2004, where Bush's close pal "Kenny Boy" Lay was caught, along with other top corporate officials, making fraudulent deals with Wall Street bankers to rip off both stockholders and rate payers.  They were caught only because their greed was so overreaching that they made too many mistakes, and  the SEC couldn't ignore it any longer.

     Among the "responsible" members of the Wall Street community, you know -folks like Bernie Madoff, getting caught like that was Kenny Boy's only real crime.  Meanwhile, thousands of stockholders lost millions of dollars because the Bush administration, guided by its "free market" ideology, wasn't minding the store.  It wasn't using its Constitutional power, through the SEC,  to regulate commerce in furtherance of its Constitutional mandate to promote the "general welfare," by keeping close tabs on the deals that Enron was making with Wall Street and thereby secure the "blessings of liberty" to all of us, not just the corporate elite ripping us off at every turn.

     This, of course, brings us to Bernie Madoff himself, a swindler with impeccable Wall Street credentials, one of the very best of all those "best people" in American finance, who ran a gigantic Ponzi scheme and ripped off billions of dollars from unsuspecting investors. Yes, the investors themselves should have realized that his incredible success with returns on their investments was just that -incredible.  But the real fault lies with the Bush administration's SEC for totally ignoring the clear warnings it was receiving from people like Harry Markopolos who was telling SEC regulators as early as 2000 that Madoff's fantastically successful hedge fund was just a scam.

          (See the npr report here.)

Markopolos, in addition to doing the math, also noted that Madoff's clientele consisted mostly of individuals, charitable non-profits and small institutional investors.

     None of the top Wall Street investment houses were putting money into Madoff's hedge fund, despite his impeccable financial pedigree and his remarkable success.  Why do you suppose that was -they just didn't want to make more money maybe?  Or was it because they knew he was running a scam for so long?  But, then, if they knew he was running a scam, why didn't they report him to the SEC for unfair competition like Markopolos did?  Was it because of a "principled" belief in unregulated "free markets", or was it because they were themselves running pyramid schemes just like his?  Oh, no, perish the thought.

     So what could the SEC have done in 2000, in 2001 or in 2005, when Markopolos sent them detailed analyses of how Madoff's hedge fund was ripping investors off?  It could have begun by simply checking the math, which Markopolos had already done for them, and then conducting a full scale investigation, as it is empowered to do under both the Constitution and the statutory framework that provides for governmental oversight of the financial markets.

     The SEC could thereby have prevented a lot of the damage to thousands of average Americans who entrusted their life savings to Madoff over the next eight years or so, by the simple expedient of making him open up his books to them.  Markopolos gave them the smoking gun that in fact turned out to be the financial "mushroom cloud," so why didn't they act on it?   I mean, if someone questioned my handling of client funds, even a few hundred dollars,  the BBO would be all over me like fleas on a junkyard dog.  So where were the SEC regulators when Markopolos gave them probable cause to believe that Madoff was ripping off millions of  his customers' hard earned dollars?

     Oh, no, they could never do anything like that, could they -to actually use their Constitutional regulatory authority to protect investors before they lost billions of dollars -most of which has long been squirreled away in offshore accounts.  That would have gone against the Bush administration's "principled" policy of deregulation, based on its "free market" ideology.  It also might have suggested to us average American citizens that maybe all those "best people" on Wall Street,  just maybe, could not be trusted without governmental oversight to promote our general welfare as opposed to their own bottom line.

     So now the Democrats have been saddled with the burden of  leading us up, phoenix like,  from the financial collapse of 2008, and the right wing ideologues are scurrying about like so many squealing little barnyard rats, gnawing on every available undigested hayseed from the still warm horse droppings of their "free market" ideology, to show how it wasn't Bush's fault and it wasn't their fault because, of course, it's never their fault is it?   After all, their "free market" ideology is flawless and unassailable, so it all must be Barney Frank's fault for making the banks lend money to unqualified homebuyers -or whatever.   

     Again, don't even consider the possibility that the collapse was caused, not by a few defaulted subprime mortgage loans, but by the criminally negligent lack of oversight by the Bush administration's bank regulators.  True enough, subprime mortgages were only a small part of the mortgage industry, and even the default of every single one of them could not have caused the total  economic collapse of 2008 if the lenders had been required to maintain adequate reserve assets across the board, based on realistic appraisals, to cover potential losses -i.e. if the bank regulators had simply checked the math.   But that would have been actual regulation and, of course, we all know that regulation is "socialism" in disguise -just ask Rush Limbaugh. 

     To have bank regulators actually regulate, to make sure that the lenders' evaluation of their reserve assets were in fact commensurate with their potential default losses, i.e. honest bookkeeping like you or I have to do to stay afloat, would have been government interference with the "free market" capitalism practiced by the corporate elite, the oligarchy that finances media hacks like Limbaugh and all that "fair and balanced" snooze you get on Fox TV.  Of course, that kind of "socialism" can never exist in a democracy, can it, no matter what we "Commie" liberals might say about the Constitution.

     No, children, just keep taking  the word of all those "best people" on Wall Street, because they know what they're doing and only have your best interests at heart, and pay no attention to the man behind the curtain.  Just give them gobs of public bailout money now, without restrictions, controls or a public share of equity, so they can keep on getting richer and richer at everyone else's expense by continuing to practice their "free market" capitalist mumbo jumbo on us until they manage to get all of America's wealth in their Swiss bank accounts.  

     For the record, I support Obama's stimulus spending package.  I also support bailing out industries, insurance companies and banks that show some remnant viability, but only if the government that's providing them with our money maintains a tight leash, with regulation, strict accountability and an equity share in many instances, to justify our investment -no more naive "free market" faith in either the competence or good faith of those "best people" on Wall Street.  To the extent Obama's present bailout package does not fully do this, I am both dubious and fearful about its success.  That is to say the bailout package suffers from too little "socialism," not too much.

D.  What makes me a capitalist in the truest sense, within the framework of our Constitutional democracy, and what makes  politically desperate critics who  label Obama supporters like me "socialist" after the total failure of their "free-market" ideology, is the fact that we "liberals" are not ideologues who put self-interest above the national interest, and we therefore recognize and accept the need for reasonable governmental regulation of commerce, as expressly provided for in the Constitution, in order to make capitalism actually work for the benefit of all Americans.

     What makes me a capitalist, in the truest, most honest sense consistent with the principles of our Constitutional democracy, is that I practice it myself while recognizing the need for and accepting responsible governmental regulation of commerce as well as fair taxation.  Bush and other "free market" ideologues who parrot the cheesy anti-government sound bites of Ronald Reagan, are not patriotic, honest capitalists who recognize  the need for responsible governmental regulation of commerce, as provided for by the Constitution.

     No, Bush, Cheney and their media apologists are anti-democratic, anti-constitutionalist ideologues who abuse both their right of free speech and the positions of influence they have gained, based on the economic power of the corporatist oligarchy that owns the GOP and has designs on owning everything and everyone else in America.  And today, when we face an economic crisis that is the moral equivalent of war, their concerted attempt to derail our President's effort to restore the economy, by their continued anti-constitutional insistence on the ideological purity of the corrupt "free market" nonsense that caused the crisis, is the moral equivalent of treason.  

     That kind of  oligarchic "free market" perversion of capitalism, as practiced by hack GOP pols like Bush and preached by wingnut media hacks like Limbauh is what I hate -not "capitalism" per se.  How about you?