Republicans have morality upside down. Santorum,
Gingrich, and even Romney are barnstorming across the land condemning
gay marriage, abortion, out-of-wedlock births, access to contraception,
and the wall separating church and state.
But America’s problem isn’t a breakdown in private morality. It’s a
breakdown in public morality. What Americans do in their bedrooms is
their own business. What corporate executives and Wall Street financiers
do in boardrooms and executive suites affects all of us.
There is moral rot in America but it’s not found in the private
behavior of ordinary people. It’s located in the public behavior of
people who control our economy and are turning our democracy into a
financial slush pump. It’s found in Wall Street fraud, exorbitant pay of
top executives, financial conflicts of interest, insider trading, and
the outright bribery of public officials through unlimited campaign
Political scientist James Q. Wilson, who died last week, noted that a
broken window left unattended signals that no one cares if windows are
broken. It becomes an ongoing invitation to throw more stones at more
windows, ultimately undermining moral standards of the entire community.
The windows Wall Street broke in the years leading up to the crash of
2008 remain broken. Despite financial fraud on a scale not seen in this
country for more than eighty years, not a single executive of a major
Wall Street bank has been charged with a crime.
Since 2009, the Securities and Exchange Commission has filed 25 cases
against mortgage originators and securities firms. A few are still
being litigated but most have been settled. They’ve generated almost $2
billion in penalties and other forms of monetary relief, according to
the Commission. But almost none of this money has come out of the
pockets of CEOs or other company officials; it has come out of the
companies — or, more accurately, their shareholders. Federal prosecutors
are now signaling they won’t even bring charges in the brazen case of
MF Global, which lost billions of dollars that were supposed to be kept
Nor have any of the lawyers, accountants, auditors, or top executives
of credit-rating agencies who aided and abetted Wall Street financiers
been charged with doing anything wrong.
And the new Dodd-Frank law that was supposed to prevent this from
happening again is now so riddled with loopholes, courtesy of Wall
Street lobbyists, that it’s almost a sham. The Street prevented the
Glass-Steagall Act from being resurrected, and successfully fought
against limits on the size of the largest banks.
Windows started breaking years ago. Enron’s court-appointed trustee
reported that bankers from Citigroup and JP Morgan Chase didn’t merely
look the other way; they dreamed up and sold Enron financial schemes
specifically designed to allow Enron to commit fraud. Arthur Andersen,
Enron’s auditor, was convicted of obstructing justice by shredding Enron
documents, yet most of the Andersen partners who aided and abetted
Enron were never punished.
Americans are entitled to their own religious views about gay
marriage, contraception, out-of-wedlock births, abortion, and God. We
can be truly free only if we’re confident we can go about our private
lives without being monitored or intruded upon by government, and can
practice whatever faith (or lack of faith) we wish regardless of the
religious beliefs of others. A society where one set of religious views
is imposed on a large number of citizens who disagree with them is not a
It’s a theocracy.
But abuses of public trust such as we’ve witnessed for years on the
Street and in the executive suites of our largest corporations are not
matters of private morality. They’re violations of public morality. They
undermine the integrity of our economy and democracy. They’ve led
millions of Americans to conclude the game is rigged.
Regressive Republicans have no problem hurling the epithets
“shameful,” “disgraceful,” and “contemptible” at private moral decisions
they disagree with. Rush Limbaugh calls a young woman a “slut” just for
standing up for her beliefs about private morality.
Republicans have staked out the moral low ground. It’s time for
Democrats and progressives to stake out the moral high ground,
condemning the abuses of economic power and privilege that characterize
this new Gilded Age – business deals that are technically legal but
wrong because they exploit the trust that investors or employees have
place in those businesses, pay packages that are ludicrously high
compared with the pay of average workers, political donations so large
as to breed cynicism about the ability of their recipients to represent
the public as a whole.
An economy is built on a foundation of shared morality. Adam Smith
never called himself an economist. The separate field of economics
didn’t exist in the eighteenth century. He called himself a moral
philosopher. And the book he was proudest of wasn’t “The Wealth of
Nations,” but his “Theory of Moral Sentiments” – about the ties that
bind people together into societies.
Twice before progressive have saved capitalism from its own excesses
by appealing to public morality and common sense. First in the early
1900s, when the captains for American industry had monopolized the
economy into giant trusts, American politics had sunk into a swamp of
patronage and corruption, and many factory jobs were unsafe – entailing
long hours of work at meager pay and often exploiting children. In
response, we enacted antitrust, civil service reforms, and labor
And then again in 1930s after the stock market collapsed and a large
portion of American workforce was unemployed. Then we regulated banks
and insured deposits, cleaned up stock market, and provided social
insurance to the destitute.
It’s time once again to save capitalism from its own excesses — and
to base a new era of reform on public morality and common sense.
Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley. He writes a blog at www.robertreich.org. His most recent book is Aftershock.