Francis Fukuyama wrote 'The End of History and The Last Man' in the early nineties. Many in the Western world assumed that it not only meant that the legitimacy of liberal democracy had ended the quest for the perfect government, it also meant that capitalism as practiced by the free world was the best form of wealth creation. Given what we know today, that was probably pretty accurate.
I don't say this lightly. It is indeed visible from the behavior of the captains of Wall Street when they met with President Obama last week. These men [sadly, all were men], were offended by the President's anguish over their behavior. They were upset that the White House was blaming Wall Street for all the economic woes of the country. These men were so used to being pampered and pandered to they couldn't digest the plain truth – that they had brought the entire world's financial system to its knees, and wiped out trillions of dollars of wealth. And banks are supposed to be custodians of their customers' wealth. What a farce!
President Obama is in a bind. He needs Wall Street to rebuild broken bridges. So he couldn't really continue throwing these fellows to the wolves, where they legitimately belong. He and his team toned down their tirade. What did these capitalist crooks then do? They acted as if they had been wronged in some way. They bristled over mounting public criticism of their pay.
The headline on the Wall Street Journal read, 'Bankers, Obama in Uneasy Truce'. Obama asked for more modesty in compensation and spending practices. How did these rascals respond? By asking the administration to cool its anti-Wall Street rhetoric. Ken Lewis, the CEO of Bank of America had the gall to say. "At some point you have to stop focusing on the past, and focus on the future.' Great, Mr. Lewis, but why would the future be any different from the past, if the same guys man the battle stations? And what about the future of those whose fortunes you and your brothers wiped out in the recent past?
Tell me is any employee worth millions of dollars, while the minimum wage is $6.55? Is anyone so deserving that his or her family after his death would get a fat pension and health care? Who is so valuable that his home is bought by the firm he heads since there are no buyers? Who in their right senses would offer employees retention bonuses to those who destroyed the company?
What would have any one of these fifteen CEOs done if a person they had hired in their homes had caused all their wealth to vanish? Would they have been as kind as Obama or the White House has been? Would they have offered to bail that person out? No. They would have employed every weapon in their rich arsenals to destroy that person.
Rarely have we seen such double standards from those in who so much has been entrusted. Why is it so difficult for these super intelligent men to comprehend the immensity of what they have done? Don't they get it? The answer is – of course they do, loud and clear. They are employing offence as the best form of defense.
Capitalism needs a deep relook. It has to move from cold and crooked to caring and compassionate, greedy to gracious, reprehensible to responsible. Don't get me wrong. CEOs are a small part of the problem. Think of the board members in these institutions. What were they doing while these greedy plots were being hatched? Why was corporate governance locked away in the basement?
The problems stem from greed. Mahatma Gandhi was right when he said, 'There is enough in this world for every man's need, but not for every man's greed'. The key issues are compensation and oversight. The wizards of Wall Street have demonstrated that they do not possess an ounce of self-regulation. That might be overlooked if the fortunes of entire nations did not depend upon their competence, honesty, and fairness. They have brought America to its knees. They have taken away much of the euphoria arising from the incredible spectacle of this country electing a black President.
President Obama will be the first American President who will attend the G-20 summit, contemplating how much of an apology he owes the world. This was brought about by the banks, by regulators who simply did not regulate, by law makers who repealed and introduced laws to create monstrously large financial institutions that then became too big to fail, by AIG, Countrywide, by mortgage brokers, and a litany of thugs in the trade.
Yet these charlatans denounce talk of taming their craving for betting on other people's money, careers, and futures, and winning even after they lose every penny of that money. If they are not replaced, capitalism will collapse. The world cannot bear such a burden of inequality.
These habits were introduced in these people at childhood. The schools to which they went developed those habits. The habits will not go away simply by chiding them. They have slipped into their unconscious minds. That is what a habit is. These habits cannot be undone. We need a new breed of leaders, and a new breed of business educators. Business schools have to remake themselves. They provide knowledge without understanding. Knowledge without understanding is meaningless and downright dangerous.
Capitalism is the finest system we know for the creation of wealth. Aristotle defined virtue as something that lies between absence and excess. The world needs virtuous capitalism. This is a joint responsibility of all Americans. Let us put our shoulder to the wheel and life this country out of this morass. It is time to create new rules for hiring.