For Immediate Release
Corporate Power: Is Regulation Enough?
EDWARD S. HERMAN
Herman is professor emeritus of finance at
the Wharton School at the University of Pennsylvania. He said today:
"Essentially, the Bush administration plan is Wall Street bailing
itself out with taxpayers' money, after Wall Street had failed to carry
out its financial functions with efficiency and integrity, and with the
bailout organized by one of its own (Paulson) who had resisted all
reforms that might have prevented the crisis. This amounts to a
hard-to-beat conflict-of-interest program. The victims of the financial
crisis get nothing in this bailout, the taxpayers get no stake or
payback in exchange for their $700 billion payout, and the difficulty
in evaluating the purchased assets by a broken regulatory system makes
it likely that the folks who are responsible for and have profited from
this crisis may be able to squeeze a further windfall out of the buyout
Pitts is a public interest lawyer in North Carolina and a member of the Program on Corporations, Law & Democracy.
He said today: "It is striking that nearly $800 billion can be
magically produced to bail out financial institutions when for years
we've heard there isn't enough money for universal health care, fully
funded, quality public schools, to fully fund current promises of
services to children such as foster care, special education or mental
health treatment. The problem is far deeper than needing more
regulation of corporations and the economy. The recent past tells us
the bailouts will simply prop things up to allow a return to
deregulated, profits-before-people policies that cause human misery for
most people and huge wealth for a few. Look who the regulators will be:
types like Ben Bernanke and Henry Paulson, who are true-believers in
free market fundamentalism except when government bailout is needed to
prop up key financial institutions. What this crisis moment should open
up for debate is the need for real democratic decision-making and
planning of the economy so the interests of the majority are served.
This historic moment begs us to question the basic premise of
capitalism that as John Maynard Keynes once said 'is the extraordinary
belief that the nastiest of men for the nastiest of motives will
somehow work for the benefit of all.'
"One absurd premise of today's capitalism is the notion of
corporate personhood, the present legal concept that a corporation is a
'person' with constitutional rights that can be wielded against real
human beings and defeat their democratically enacted laws designed to
protect life and nature from corporate harm. Corporate regulation and
government intervention in the market and economy are crucial. However,
having Foxes, like Bernanke and Paulson, guarding the Henhouse will
never provide the systemic, democratic changes needed. Now is the time
we must re-think the notion of democracy, civil and economic, and
whether we even have an approximation of government of the People, by
the People, and for the People. These are the real homeland security
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