The novels of Charles Dickens portray life during the development of modern capitalism in England. In Nicholas Nickleby (1838), one of the characters describes a venture in which members of parliament join with capitalists to launch a new company:
“It’s the finest idea that was ever started. ‘United Metropolitan Improved Hot Muffin and Crumpet Baking and Delivery Company.’ The very name will get the shares up to a premium in ten days.” And when they are at a premium, “you know what to do with them as well as any man alive, and how to back quietly out at the right time.”
When George W. Bush seized the White House, it was a case of Dickens coming home to roost. Bush may never have read Nicholas Nickleby, but he sure knew how to use his political connections to get in on the ground floor at Harken Energy, and how to “back quietly out at the right time,” selling his shares before they tanked. Dick Cheney followed the same game plan at Halliburton. So did Tom White at Enron, walking away with $12 million – to become Secretary of the Army for Bush.
Halfway between Dickens’ Nicholas Nickleby and Bush’s coup d’etat, Lenin wrote his classic work, Imperialism (1916). Lenin had a pretty good idea of what made capitalism tick – two years later he led the world’s first successful working-class revolution in Russia. In Imperialism, he quoted a German business magazine, describing the decline and fall of a profitable steel company:
“It appears that the Board, without consulting the shareholders, has loaned six million marks to one of its ‘daughter companies.’ This commitment, amounting to treble the capital of the ‘mother company,’ was never mentioned in its balance-sheets. This omission was quite legal. The Chairman of the Board who had signed the false balance-sheets was, and still is, the President of the Chamber of Commerce. The shareholders only heard of the loan when shares had dropped nearly 100 per cent, because those in the know were getting rid of them.” [Collected Works Vol. 22, p. 229. Quote is from Die Bank as quoted by Lenin, with some details omitted from this excerpt. Italics in Imperialism.]
Change the names, and Lenin could have been describing Enron. Its chairman, Ken Lay, friend and contributor to George W. Bush, brought the same kinds of financial and accounting tricks to a whole new level of theft, leaving tens of billions of dollars destroyed, and tens of thousands of lives uprooted.
Don’t they ever learn from their mistakes?
George W. Bush presides over the most corrupt administration in over a hundred years. His appointees throughout the Federal government are representatives of the oil, banking and military industries, often with a direct personal stake. His head of the Securities and Exchange Commission (SEC) was Harvey Pitt, a Wall Street lawyer with ties to the accounting industry.
For head of a new board to oversee the accounting industry, Pitt chose former FBI/CIA chief William Webster. Webster headed the audit committee at U.S. Technologies, where he was negligent, at best, regarding that company’s financial mismanagement. “Mr. Webster was chosen over better candidates [for the SEC job] precisely because accounting industry lobbyists – a group that clearly still includes Mr. Pitt – believed he would be ineffectual.” (Paul Krugman, writing in The New York Times.) The growing scandal finally forced Pitt to resign, but it is unlikely to change the Bush administration’s support for corporate cronyism.
Deregulation of the financial and energy industries, privatization of public utilities, appointing corporate insiders to “oversee” their own industries – these are not mistakes. They are deliberate policy decisions by the most powerful capitalists, designed to extract maximum loot without regard to the collateral damage: Record corporate and personal debt and bankruptcies; continuing mass layoffs with millions exhausting their unemployment benefits; those with jobs working more hours with less health care, less job security, and less chance of ever having a secure retirement.
The author can be reached at arthur.perlo@pobox.com
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