From Where We Sit




In the Absence of Decency

     The International Herald Tribune has just published a jaw-dropping story about corruption at the late banking giant, Washington Mutual. Part of the piece centers on a John Parsons who oversaw a team screening mortgage applications at WaMu. One of his more outrageous confessions was approving a mortgage for a mariachi singer claiming a six-figure income. Parsons did all this while snorting methamphetamine at his desk. As one employee put it, “in our world it was tolerated.” Parsons, by the way, is currently serving 16 months for theft after his fourth arrest - all involving drugs.

     The press has been rife with stories of the economic downturn, overusing emotional words, such as panic, meltdown, catastrophe, suffering. Occasionally, a new term creeps into a story, such as moral hazard; however, for the most part, this extraordinary turn of events has been unfolding in a strictly financial context, highlighting the foreclosures, the bankruptcies, and the layoffs, as well as the bailouts, stimulus packages, and tax cuts.

      Economic cycles are nothing new. From the early 1930s, through the post-World War II boom, through the downturn of the early 80s and the subsequent dot-com boom, capitalist economies have gone through natural cycles of strength and weakness. What’s new about this is the total loss of trust among people in trustworthy positions. As one investment banker put it, "there were people at WaMu that orchestrated nothing more than a sham or charade. These people broke every fundamental rule of running a company."

      More than mere speculation, we have here masses of people willing to destroy lives for monetary gain. These aren’t simply robber barons denuding a few banks, but a cross section of a whole society scamming the system.

      Bernie Madoff, one of the pillars of the Jewish financial community, ruined countless lives and sent the Elie Wiesel Foundation For Humanity into near bankruptcy. One of his victims, Thierry Magon de La Villehuchet, recently committed suicide; Madoff remains free on bail.

      In Asian societies, crimes that affect the community at large have serious consequences. In China, both Madoff and Parsons would be looking at life imprisonment, if not execution. The breakdown in the United States of ethical behavior, designed to serve as the glue for a civil society, is both stunning and disturbing. The Right has for years blamed secular humanism, as well as the eroding of family, community, and religious values which have been at war with an intellectual vision of modernity. The Left, for their part, see capitalism itself as a culprit, ironically harking back to John Calvin and Thomas Hobbes, who saw man as innately sinful, greedy, and selfish.

      President-elect Obama has acknowledged civil discourse as a virtue he wants to bring back to the public square, and this is to be applauded, but even he subsumes it in a political “to do” list which concentrates on the material well-being of his citizens. The financial collapse is not the overriding story here, but a near total moral breakdown that has brought our society to this abyss. A society that can’t observe even a fragile framework of respect, civility, and responsibility can not endure; history has taught us this.

     Whether the answer lies in draconian proscriptions, such as those imposed in Singapore and China, or in re-embracing traditional religious, cultural, and community values, the moral dynamic of this “financial tsunami” has to be addressed.

     Nearly twenty years ago, Derek Bok, upon his retirement as president of Harvard University, gave a speech warning that science and technology were so outstripping morality and ethics in human development that the consequences could be terrifying. This past year has given us a foretaste of Bok’s troubling vision.

     

Winter, 2008
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