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The Wall Street Crowd and the Transparency Revolution
Alex Steffen, 24 Mar 09
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There is a great cluelessness afoot in this land. It's padding around in Europe and Asia as well, but here in the U.S., it's staggering around with giant clomping feet, and its favorite stomping grounds are the economic punditry centers of Wall Street and Silicon Valley.

Consider this article by Joe Nocera about the AIG scandal. In it, Nocera argues that the anger over the AIG bonuses is irrational and self-hurting. He's completely missing the point on both accounts.

For most Americans, anger about the economy -- indeed, sheer blind lynch-the-bastards rage -- is not irrational at all. The American future has just been looted by a small class of thug investors. The average American makes less now than he or she would have in 1973, and probably works longer hours for worse benefits. That, on top of a grinding away of all manner of public goods -- things regular people depend on, like schools and libraries and childcare, not to mention a functioning climate -- has left the average American in a profoundly tenuous condition: and it was all done for the profit of a tiny percentage of the wealthiest people in this country. Describing that reality is not class warfare, it's history.

In this situation, anger is a completely rational response. The only way that things will be righted is through real change, and the only hope of real change in a system as corrupt as this has become is to blow the lid off things, to open them up to sunlight, with or without the permission of the exposed.

That's the power of transparency: it is the cure for corruption.

And corruption is what has gotten us into the mess we're in. If we had a perfectly fair and enlightened government, with a strong regulatory apparatus and a fair legal system, we would not now be arguing about corporate looting or wasted ecosystems or how to provide basic health care. The biggest reason we haven't already built a bright green economy where all boats rise is that a small class of people has profited so enormously from continuing obviously broken systems to absurd degrees that they could afford to dump billions of dollars into candidate coffers, astroturf campaigns, ideological think tanks and lobbyists to bullshit everyone else. Again, history.

So I think the AIG scandal has not gone nearly far enough: we need to see that anger spread to inquiries and whistle blowings across the business world. The point is not to be anti-business. Most people in business are good people; we all need a thriving economy in order to provide sustainable prosperity. The point is that we can't get a thriving, sustainable economy through open looting and a complete collapse of ethics, which is what business during the Bush administration became.

What worldchanging people need to do in this crisis is continue pointing not at the scandals, but at the system. We should all support efforts to force the workings of government and the economy into the open: Yes We Scan, FarmSubsidy.org, DeSmogBlog and Exxon Secrets, and a host of other great efforts.

The world needs a transparency revolution. That starts with people howling for justice, but let's not let it stop there. Let's use this opportunity to bring anti-corruption transparency to our financial institutions, regulatory apparatus and business media. Let's put a little sunlight on the subject. Let's demand full disclosure on all public money. Let's demand shareholder rights to accountability, and open regulatory records. Let's hold our philanthropic institutions, university endowments and pension funds to a higher standard. Let's demand greater objectivity and professionalism from the business media. Let's teach openness and transparency as a path to profit in business schools. Let's close loopholes, reveal offshore accounts, and root out tax cheats. Let's blow the whole thing open.

Let's demand a financially transparent world in exchange for our bailouts.

Image by Ji Lee. Source: Portfolio Magazine.

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Comments

Bravo!


Posted by: Mark on 24 Mar 09

I agree with your high level point. Transparency is essential. But I do have one minor nitpick. You say, "For most Americans, anger about the economy -- indeed, sheer blind lynch-the-bastards rage -- is not irrational at all." My response is that if "sheer blind lynch-the-bastards rage" is not considered irrational, then humanity has made little progress from the days of witch burning. Violence, even the desire for violence, is not rational.


Posted by: Erika on 24 Mar 09

Perhaps businesses that start practicing a high degree of transparency will have a competitive advantage. Bernard Kamoroff, author of a great little book called Small Time Operator, advocates keeping "open books" - accounting that any customer or client can see upon request. Good idea.


Posted by: David Foley on 25 Mar 09

Yes, exactly. As Wired magazine describes, a revolutionary tagging system (XBRL) makes transparency in business and politics within reach. More at http://tinyurl.com/bch55a .

Best,

Mark


Posted by: Openworld on 25 Mar 09

Here here - appreciate the sensible message given the stuff currently filling the blogosphere. What makes the transparency feasible is a hope that the new 'toxic asset' plan is regulated with care from Washington because the corruption that got us in this mess is closely illustrated here: http://www.youtube.com/watch?v=Nay4VbUJl3E.


Posted by: sam dixon on 26 Mar 09

AIG and China are creating this huge teaching moment. AIG on the social and political construction of risk and China on becoming aware of the risk of bearing the loans. If policy makers and pundits seem lost in thier katrina moments it because we haven't seen the destroyed air water and soil basin, to keep it in conventional term, from the massive infrastructure we laid down in the era of cheap resources. Those bonds are still requiring the same payment as usage declines for conservation and economic reasons requiring changes to the payback model. Government in turn wants to stimulate the same bad business as usual practice assuming the same risks. Cities need to shrink back to sustainable limits and bring back the environmental services of surrounding farms, flood basins, eyes on the street and connected greenways.


Posted by: Gladwyn d'Souza on 27 Mar 09

Transparency my keep some inline, however the change that we are looking for will become apparent, when we human beings redress self and exercise integrity. There is a book in the marketplace that will facilitate such transition.
“Absolute Prosperity My Divine Heritage” is available Worldwide online and at local bookstores. Please read this text yourself and get it into the hands of everyone that you can.
We absolutely, can make the necessary shift and achieve the changes that we desire.
ISBN: 978 1 4251 3664 2
ISBN: 142513664 8

HAVE AN AWESOME LIFE YOU DERERVE IT!


Posted by: Dr McLean on 13 Apr 09

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