Year of Living Dangerously
March 12, 2002
By T.W. Croft
In one of the more memorable television commercials of the
go-go nineties, a New Economy electricity industry spokesman
asked "why," when confronted by "stodgy old politicians who
were refusing to deregulate utilities on the deluded and elitist
grounds that they know what's best for them."
The now infamous Why ask Why? ads from Enron Corporation
were one of a series that propounded the "revolution" in entrepreneurial
thinking demanded by the new economy. "TV commercials celebrating
the subversive power of those who 'ask why', which was said
to be 'the chosen word of the nonconformist'" (citation from
One Market Under God).
Some 70-75 years ago, sociologist Thorsten Veblen railed
against the "commercial sabotage" of a similar group of entrepreneurs,
the "predator business tycoons" that led the 1920s into the
speculation and crash of 1929, and a decade-long depression.
Today's re-run of the Teapot Dome scandal, replete with White
House intrigue and oil barons plotting the midnight drilling
of public oil reserves, destroying the lives of thousands
of workers and robbing millions of investors (including pension
trusts) and energy consumers, is but one viral strand of an
mass epidemic of really evil runs on the public trust.
Many of the nation's blue bloods and business leaders have
been hard at work in the middle of the night, like little
financial Jeffrey Dahmers, leaving their carnage stored like
partial bodies under floorboard. Con artists at several other
corporations such as Global Crossing have bilked billions
and devastated workers. Enron's "entrepreneurial" auditor
Arthur Anderson is busy scraping together hundreds of millions
of dollars to settle the rip-off of almost $700 million from
elderly church ladies in the Arizona Baptist Foundation ponzi
scheme, not so long after settlements on Waste Management
and Al Dunlap's Sunbeam.
Brokers and bankers from Cleveland to New Jersey have been
shifting hundreds of millions offshore, to a magical secret
island where all of the bloodthirsty corporate cannibals have
been planning to rendezvous and party like it's still 1999,
in some devilish bacchanalian hootenanny.
But many of the "New Economy" schemes were pulled off in
broad daylight. Wall Street and New Economy venture entrepreneurs
have been behind many of the dot-com bubble shake-downs, the
emerging markets speculation, the mergers that manufactured
golden parachutes and gold-lined management fees, the massive
public dollars lifted in the derivative scams.
They learned much from the savings-and-loans swindlers and
junk-bond kings of the 1980s. The early century robber barons
seem almost paternalistic today; while richer in comparative
terms, they at least (a) produced products (b) produced most
of their products in the U.S., (c) developed, over time (if
after long fights) relationships with unions, and (d) opened
libraries, hospitals and universities. Maybe their actions
were only a result of laws and societal pressure.
These guys today are making a run on the piggy banks of our
nation (private assets) and the candy store (public treasury)
that is massive in scope, and it has only been building in
intensity, sophistication and comprehensiveness through the
years. Federal regulators have been bought off for so long
they can put up only the flimsiest of inquiries. Political
leaders have been compromised. The investment houses are complicit.
Corporate boards are interlocked and locked-in for ill-gotten
profits. Who the hell is watching the store?
If writers have employed hyperbole to embarrass the crooks,
and yet their rhetoric seems to be falling short, it may be
because the system has been cooked for so long, there is no
shock value left. "Thousands screwed and laid off" has been
published so many times, it doesn't mean as much to the public
as it once did. As Arthur Levitt, the former Chairman of the
SEC said about the Enron situation, the capital markets have
And, partly due to the bursting of these speculative bubbles,
the global economy crashed in 2001, continuing into 2002.
Over two million workers have lost their jobs due to the downturn,
and a large numbers of industries have been closed, seriously
damaged or are in bankruptcy. Much of this damage is permanent,
with one-half of the steel industry in bankruptcy. It adds
hundreds of thousands of previously jovial new economy sector
people--including technology, communications, transportation
and services employees-- to the ranks of more sober blue-collar
workers, who have watched slow-motion de-industrialization
for years. Entire communities dependent on some of these industries
have lost their employment base, and replacing the jobs lost
is a long-term and uncertain prospect.
In other news, a war is being waged now on four-five fronts,
while the Congress is playing catch up to stay "in the loop".
Many innocent Americans and Afghanis have died since September.
While over 3,000 Americans died horribly on September 11,
the effects of increased dislocation on social stress could
lead to an increase of premature mortality rates of 5.3% due
to heart disease, and 3.1% due to stroke, for every 1% increase
in the unemployment rate. Given the fact that the rate increased
at least 1.5% since the end of 2000, it is possible that 20,000-30,000
additional deaths may result over a two-year period. If this
is a slow, jobless recovery, as predicted in many quarters
(and job loss continues after recovery), the additional damage
to health and the increase in predicted crime would be considerable.
In the country, families are fearful for their children who
are stationed overseas in the creeping mission that is the
war on terror and the evil ones; insecure both about their
personal futures and about the direction of the country, in
many cases having had their retirement savings reduced; worried
about the wrecking of the environment and the continuing erosion
of sovereignty due to unfettered global trade pacts; and,
in some cases, upset and cautious about the increased invasions
of privacy and "politically correct" speech and thought that
characterizes the new Homeland Security measures to ensure
support for the war. Professors and journalists who have asked
questions have been censored or lost their jobs, and activists
have been detained and de-railed from travel plans.
The "capital markets" have absolutely failed, Arthur, and
the one thing that a new generation of "predatory business
tycoons" have been good at producing is the extraction of
assets from great colonies both domestic and abroad. Whether
it's the relatively miniscule proceeds from a retired teacher's
401(k) or the prospect of oil in mid-south Asia hunting grounds,
the extraction schemes are steadily producing, day and night.
Meanwhile, a whole new generation of workers and families,
too, are taking to the road, searching out new hopes and leaving
behind the lost dreams of their lives, like the "New Poor"
of dislocated blue-collar workers in the '80s, and some of
our grandparents and great grandparents in the great depression.
This time, its not just blue collar, but also educated people
who slaved away at their jobs in the '90s, confident that
their stock options and 401s gave them motivation to work
60-80 hour weeks, and the chance to succeed like their parents
The optimistic jauntiness and entrepreneurial hubris of the
great gatsby '90s has given way to fear and loathing, and
a lot of uncertainty. Even if the feel-good media can convince
the public that the economy has recovered, it will be a long
time before people are convinced it's safe to come back out
and play. It has been, and is, indeed, the year of living
© 2002 T.W. Croft.
T.W. Croft is Director of the Heartland Labor Capital Network,
managed by the SVA. Heartland has commissioned "Working Capital:
The Power of Labor's Pensions", recently released by Cornell
University Press. Visit www.heartlandnetwork.org
for more information.