Progressive Christians Uniting

Vulture Watch: When Progressive Christians Look at the Winner-Take-All Society

I am a faithful reader of my newspapers’ Business sections, and I also try to keep my eye on Business Week, Fortune, The Wall Street Journal and all such vehicles written for folks in the know about money. I like the brisk no-nonsense style of business reporting but I also want to stay abreast of what constitutes the deep structure of our society–its ethical grammar, so to speak–which is all about getting and spending and the anxieties attendant thereunto.

Two Business items caught my attention this weekend: first, a short piece (with helpful graphics) by NY Times business writer Floyd Norris on the high cost of college, which has been in the news on account of the College Board’s much-publicized report on a quarter-century rise in the tariff for completing four years at an accredited institution of the higher learning. Not only have college costs consistently outstripped inflation, but expressed as a multiple of average pretax earnings for workers in American industry, college costs in adjusted dollars are now two-and-a-half times what they were in 1976. But not to worry, says Norris, because relative to stock prices college costs are less than half what they were in 1982. He concludes: “For the wealthy with lots of financial assets, college costs less than it used to. For those who depend on their jobs for income, the opposite is true.”

Well Lord have mercy! Who’dve thunk it?? The Times’ headline writer had the wit to to slug Norris’s piece: “Advice on Paying for College: Buy Stocks in 1982.”

Understandably in a short piece of spot reporting, Norris did not go into the richer and deeper story of diminishing college access for working class kids–a story about the rapidly increasing number of “merit” scholarships awarded to the children of upper middle class homes, about the open scandal of legacy admissions at allegedly competitive elite institutions, about the shrinking Pell Grant and the shameless wining and dining of college loan officers by the proprietors of sharky new student loan operations.

The other Business item actually led the Times on Sunday, a lovely Stephen Labaton expose of how the cream of corporate America, strongly encouraged by Treasury’s Hank Paulson (he of recent Goldman Sachs renown), intends to eviscerate the Sarbanes-Oxley Act, passed in the wake of Enron, so as to ensure the long-term “competitiveness” of American capital markets.  This evisceration, complete with roasting and consumption of the entrails, will take place right after the election and will be presented as fait accompli to the new Congress regardless of its political composition. The Big Boys know that the Democrats, should they regain control of Congress, would never presume to antagonize the Permanent Government consisting of Wall Street eminences of their own class.

The Committee on Capital Markets Regulation (that’s the Paulson wrecking crew’s official name) will issue a study that recommends elimination of private shareholder suits against corporations that defraud investors, that prevents state attorneys general from bringing suits against corporate defendants in securities cases, and that makes accounting firms immune from liability when they fail to catch gross chicaneries that are staring them in the face and in which they are clearly complicit, as was Arthur Andersen & Co. in the chicaneries of Enron. Private securities cases will be basically shut down, and the 300 million people of these United States will now need to rely on the Securities and Exchange Commission for any policing of high-level corporate crimes and abuses, such as undisclosed executive pay and perks and the unrestrained looting of shareholders that routinely takes place when managers take companies private at way-below-market prices.

As this same Securities and Exchange Commission has done absolutely nothing to stop such grotesqueries as “spring loading”–a particularly loathesome form of backdating stock options for top managers, it is safe to say that our 300 million have everything to fear from leaving it to the SEC to key an eye on the Big Boys.

But let us also think for just a moment about the alleged rationale for the Big Boy committee’s project of undoing Sarbanes-Oxley. Is there any real evidence for the claim that our capital markets aren’t competitive now? Does Wall Street appear to be withering on the vine? Do our American companies–or do international companies–appear to be shifting their business to other, less regulated, capital markets? Well, yes, to a degree. London’s FTSE and other markets where fewer questions are asked seem to be gaining a bit on the NY Stock Exchange and other American markets. But is that really an ethically sound rationale for stripping way what little there is of our regulatory infrastructure?

Jeffrey Skilling was sentenced this past week in Houston for his role in the Enron crimes. More than any other, Skilling is the guy who cooked the books. He told the news media that in four or five years he expects people will see this more calmly and rationally and recognize that he is not really guilty of any wrongdoing. Ordinary Enron workers whose pensions and jobs were wiped out on account Skilling’s accounting told the media they will never forgive Skilling and other Enron exects for destroying their hopes and dreams.

The Paulson select committee intends to make sure that Skilling’s view of the world prevails. Do progressive Christians have a dog in this fight? I think we do.

                                                                          - Peter Laarman

Posted under: Director's Cut, Happening in the World