Sunday, May 9, 2010

The Nature vs. Nurture of Economic Reform

Left to its own devices,the economy like any other projection of human survival is based on the laws of nature (perhaps the jungle), but when reviewed and tempered with thought, reason, and the needs of humanity at large, we begin to nurture an integrated vision of what is required to control those natural instincts or impulses. I have watched with some curiosity and pride the recent hearings before the Financial Crisis Inquiry Commission. Elsewhere I have written and spoken of the cycles of economic exchange between laissez-faire and integration, and I see yet another great example of this integrative process through the adoption by the Obama and other administrations today, of taskforces and commissions created to study the various issues that underlie both the causes of the financial crisis and possible solutions to it.

In fact, there is little doubt in my mind that this an 'electrifying time' (as my mentor Martha Minow, Dean HLS, puts it) of nurturing oversight and involvement of certain democratic ideals. Where Obama insists on certain policies, he is checked left and right (the allusion is to political parties and to the randomness of critique as well). Note the ordeal overcome with regard to health care. Yet on healthcare, we did not see a wholesale passing of one vision, as some of us would have cared to see, but a hodgepodge created out of the democratic ideal, so that what was finally passed was created out of a cultivation of representative policy. I am still and will always be shocked by the outspoken natures, voices, wallets of America. But there is no denying the power that underlies the many faces of this democracy.

On the economy, we see some great minds and spirits take up their positions on this new Inquiry commission (not McCarthyist in the least) that earnestly asks to understand what went wrong and why; where the blame lies not to castigate and crucify but to figure out and build what is necessary, with a view to strengthen the system. There is an admission that we did not know what we were doing or getting into, and those who perhaps were in a position to predict, need to be restrained from crossing the lines of conflicting interest that may arise. In this, I remark upon that little piece of news that certain Republicans have called for an investigation of the timing of the SEC/government's investigation into Goldman Sachs' various conflicts and the large rewards emanating from one of their conflicting bets. This bipartisan effort insists we note that there are watchdogs of watchdogs of the watchdogs. In order to build confidence in a new regime, we must recognize that there is little chance now that we will not get it right.

In a study of the 'shadow banking system' former CEO's Cayne and Schwartz explain that there was no reason for Bear Stearns to go under when looking at their books so some elements in the market (possibly bigger fish than them) must have thrown them under the bus first (ate them up?) in a large shorting scheme. If you watched the testimony, did you not raise an eye and question it? What were the rules? Did Cayne and Schwartz not live by the same rules? Had they not shorted other smaller fish previously? And even when they were fighting for survival, did they not do others in? I am thinking about the investors, the small retail, consumer, investors... without whom no fish can gain any weight in this largest of American ponds. If anyone needs help and protection, it is these folks who are not in the same game as the sharks, barracudas, rays etc. I am speaking of guppies here! The ones who get swallowed whole but who sustain the system with their volume.

I am reminded of the sharks council in Finding Nemo: the sharks who attempt to curb their deeply imbedded natures by not eating the little fish, but lose all control at the first sniff of blood. Is it possible to control these large fish, and the instincts and nature upon which they have been built simply by erecting a new set of rules and regulations? Perhaps a short circuiting of the nature itself is in order? But then do we not want the natural instincts to continue their 'progression' and 'development' of the system and money-making? Do we want to simply curb some of the appetite or provide for a certain largesse given the larger humanity becoming involved in the system? Where multi-nationals are involved, employees and assets supported and sustaining the corporate body world-wide, what transnational reforms will refine and repair the engine to act and perform according to a value system that is both highly efficient, and at the same time, ethically responsible to all its constituencies.

Nature turns out to be mostly selfish in the interest of survival. It is nurture that incorporates the discipline of magnanimous humanity. You may not really learn about sharing until you get to kindergarten, even though you may have brothers and sisters at home. The fact is a family comprised of brothers and sisters can still live according to the laws of the jungle so as to not blunt the instruments of survival lest one or many of them do(es) not make it. The family in that regard is an incubator for honing our natures as we prepare for the outside world. Yet, togetherness bred within family (also the seed for community) comes out of a different impulse for survival, for example where group labor is necessary for common survival, and one that beckons feelings of gratitude, bonding, and love. In our communities through tools like schooling, these feelings are expanded to respect for others, service for the larger good, fairness, and justice, so that sharing of wealth and resources can take place. This ensures that some do not survive while others are left to die. Why? Because when that meteor hits your town, city or country, only your 'new found' brother or sister on the other side of the earth may be left to tell your story, by then - our story, to those who come after us! What story would you like them to tell?