The Sociopaths on Wall Street
The ideal corporation through most of the 20th century was one that pursued profits while being reasonably responsible toward workers, the community, and consumers. Since about the 1960s, corporations have also, at least in theory, been more responsible when coming to the environment.
However, since the 1980s—some would argue sooner—there has been a deterioration in corporate ethics in many sectors. Certainly the S & L crisis, the ethical failures of the Exxon Valdez episode and the deaths and lack of financial responsibility associated with the Union Carbide Bhopal disaster—all three occurred in the 1980s—makes it clear that the interpretation of deregulation in that era was far too often synonymous with ethical lapses in the executive suite. From the end of the Reagan era until the end of George W. Bush's time in office, the interpretation has only gotten worse. Actually, in very little time, deregulation went from a need to adjust regulations to make them fairer and more sensible to becoming an outright license to break the law and defraud people in various sectors of society.
There have always been lapses among corporation and there has been debate about how much or how little a corporation should do. There have also been corporations, all along, that cut corners in order to gain an advantage over other corporations. A general rule of thumb in business is that competent people can always make money as long as everybody plays by the same rules. Unfortunately, people who are not very honest or competent or both are generally the first to look for short cuts, including favors from politicians.
The reality is that both parties are susceptible to influence peddling. Unfortunately, Republicans have pretty much made deregulation, as well as other ethically challenged ideas, pillars of their political philosophy. In addition, if an ethically-challenged business executive makes enormous profits, many Republican politicians, are notoriously slow to recognize that there is a problem (e.g., Kenneth Lay and George W. Bush). The most telling sign is that when a rational and honest Republican prosecutor tries to uphold the law, that prosecutor may find himself without a political future in the Republican party.
One of the problems with today's business world is the number of ethically challenged people who are allowed to rise to the executive suite in the first place. In Bloomberg, William D. Cohan has an article that discusses a theory by Clive R. Boddy about Wall Street psychopaths:
It worth recalling that John Dean has written a book called "Conservatives without Conscience." Dean was not talking specifically about psychopaths, and certainly not corporate psychopaths, who are basically a class of very smart criminals who are much more sophisticated than ordinary criminals without conscious (who in any case frequently end up in prison). But Dean was very much talking about people who are authoritarian by temperament. I would also add that people like Newt Gingrich and George W. Bush strike me as extraordinarily narcissistic and are clearly among the type of people Dean talks about. For both Bush and Gingrich, life is all about them.
But today's Republican party has other other problems as well. What is it about the Republican political class that they look the other way when a Republican politician obviously lies? And why is it that they refuse to set the record straight when others obviously lie about Barack Obama (birthers) or lie about John Kerry (swift boaters)? And why is it that the Republican political class failed to notice the obvious economic disaster we were heading for as Wall Street and the banks were allowed to engage in reckless behavior?
Here's the scholarly link to Boddy's paper.
And here's a link that provide a more accessible version to Boddy's paper.
However, since the 1980s—some would argue sooner—there has been a deterioration in corporate ethics in many sectors. Certainly the S & L crisis, the ethical failures of the Exxon Valdez episode and the deaths and lack of financial responsibility associated with the Union Carbide Bhopal disaster—all three occurred in the 1980s—makes it clear that the interpretation of deregulation in that era was far too often synonymous with ethical lapses in the executive suite. From the end of the Reagan era until the end of George W. Bush's time in office, the interpretation has only gotten worse. Actually, in very little time, deregulation went from a need to adjust regulations to make them fairer and more sensible to becoming an outright license to break the law and defraud people in various sectors of society.
There have always been lapses among corporation and there has been debate about how much or how little a corporation should do. There have also been corporations, all along, that cut corners in order to gain an advantage over other corporations. A general rule of thumb in business is that competent people can always make money as long as everybody plays by the same rules. Unfortunately, people who are not very honest or competent or both are generally the first to look for short cuts, including favors from politicians.
The reality is that both parties are susceptible to influence peddling. Unfortunately, Republicans have pretty much made deregulation, as well as other ethically challenged ideas, pillars of their political philosophy. In addition, if an ethically-challenged business executive makes enormous profits, many Republican politicians, are notoriously slow to recognize that there is a problem (e.g., Kenneth Lay and George W. Bush). The most telling sign is that when a rational and honest Republican prosecutor tries to uphold the law, that prosecutor may find himself without a political future in the Republican party.
One of the problems with today's business world is the number of ethically challenged people who are allowed to rise to the executive suite in the first place. In Bloomberg, William D. Cohan has an article that discusses a theory by Clive R. Boddy about Wall Street psychopaths:
Clive R. Boddy, most recently a professor at the Nottingham Business School at Nottingham Trent University, says psychopaths are the 1 percent of [people who] ... "lack a “conscience, have few emotions and display an inability to have any feelings, sympathy or empathy for other people.”
(snip)
He says [psychopaths] seem "to be unaffected" by the corporate collapses they cause. These psychopaths "present themselves as glibly unbothered by the chaos around them, unconcerned about those who have lost their jobs, savings and investments, and as lacking any regrets about what they have done. They cheerfully lie about their involvement in events, are very convincing in blaming others for what has happened..."
It worth recalling that John Dean has written a book called "Conservatives without Conscience." Dean was not talking specifically about psychopaths, and certainly not corporate psychopaths, who are basically a class of very smart criminals who are much more sophisticated than ordinary criminals without conscious (who in any case frequently end up in prison). But Dean was very much talking about people who are authoritarian by temperament. I would also add that people like Newt Gingrich and George W. Bush strike me as extraordinarily narcissistic and are clearly among the type of people Dean talks about. For both Bush and Gingrich, life is all about them.
But today's Republican party has other other problems as well. What is it about the Republican political class that they look the other way when a Republican politician obviously lies? And why is it that they refuse to set the record straight when others obviously lie about Barack Obama (birthers) or lie about John Kerry (swift boaters)? And why is it that the Republican political class failed to notice the obvious economic disaster we were heading for as Wall Street and the banks were allowed to engage in reckless behavior?
Here's the scholarly link to Boddy's paper.
And here's a link that provide a more accessible version to Boddy's paper.
Labels: 21st Century issues, American Crisis, corruption, Republicans
posted by Craig at 1:42 PM
2 Comments:
You're missing a key point, one facilitated by the psychopathology of your premise but not fully attributable to it.
The very wealthy and corporate poobahs enjoy a good economic implosion now and then, and the reason is simple. The basis of getting return on investment is to buy low and sell high. The super rich will tell you you can't sell high all the time, any more than most people can be above average. So, if the economy collapses now and then those with more than enough money to make it through the rough patch get to pick up big bargains along the way back to prosperity. Buy some valuable land at distress-sale prices here, take over a well-established, well-run but failing business there, and when the economy recovers sell them at huge profits. Then, there's the matter of businesses saying goodbye to competitors that can't make it through the rough patch. ("So sad, sniff, sniff, snort, chuckle.")
That's how it's done.
Thus, a good many of the rich and super rich look on recessions and depressions as buying opportunities that lead to greater wealth and reduced competition. For them, what's not to like?
So what if a whole lot of honest, hard-working people who never did anything to anybody are devastated by economic busts. Who promised them life would be fair?
Regarding why Republicans have no problem with lying and the liars in their ranks, they know that on most issues, most Americans aren't with them. They know that with many, arguably a majority of Americans, their economic Darwinism, their "let him die" attitude, is as well received as a dose of castor oil. So Republicans long ago adopted an anything-to-win approach. Lying is part of "anything."
Yes, with the political right it's all about them and what they want, which is money, power and the election victories that bring them both.
(Forgive the nit-pick, but you wrote "conscious" where you meant "conscience.")
S.W., thanks for comment (and the nitpick).
You make some good points about the rich buying low, etc. If you have the money, who wouldn't buy stocks at their lowest? The word 'enjoy' almost suggests that some of these guys like to rig a fall. I've thought about that. But given how volatile the stock market has been since the 1980s, why bother? It's not that difficult to play the market——if you have lots of money and patience. But what's to worry about, given the obscenely low tax rate on investments? Anyway, Congress has given the rich so many opportunities that banking on (or rigging?) catastrophic recessions isn't really that smart.
Do people game the system for profit? Oh yeah. We both know that.
You may be more cynical about the rich than I am. Some are ruthless pirates like Rupert Murdoch. But some, even though Republican, are relatively decent, though I don't agree with their politics. But I've seen up close how the good and bad ones run their organizations.
As for the sociopaths, they're a whole different breed, at least according to an anthropologist I know who has been studying them. I don't mean cynical or tough or narcissistic. I mean they would be robbing banks the old-fashioned way if they weren't smart enough to manipulate people and the system. Stable corporations can usually root them out, but fast-moving, rapidly changing corporations can allow a sociopath to climb quickly before anyone realizes how reckless the person is.
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