All wild-eyed causes founder on their own excesses. All crazed ideologues eventually crashland on their goofy extremities. Give the sure believers enough dental floss and, in time, they will hang themselves. It all fits. If you sit on the sidelines long enough, the heavy hitters have a way of receding back to you.
Our example is the Reagan Revolution, the heavy-breathing movement that was going to re-invent government and change the course of American society—if not that of the world. The Reaganauts, with their supplyside economics, were going to remake our way of life. By cutting taxes for business and the upper classes, this was supposed to stimulate the economy so much that unemployment would be eradicated.
The great sin of our times was too much government, too many regulations, too many laws, too many restrictions that hampered the free individual from reaching his true potential and stretching to his financial limit. “Deregulation” was the Reagan litany, the credo that would free the whole nation and benefit all from top to bottom of the tax scale. Even Ottawa, in its own diluted version, tentatively grasped the theorem.
The United States and its brightest citizens took Reagan seriously. Unfettered by bothersome government watchdogs and supervisors, they would remake a society in its finest form, the ideal of laissez-faire out there as the Holy Grail.
We have seen the result. Some of Reagan’s own disciples, irritated by the mere restrictions placed by Congress on monetary and military aid to certain foreign revolutionaries, decided to do their own deregulation. Col. Ollie North and his cowboys in the White House basement took it upon themselves to privatize American foreign policy. It was in the frontier tradition Reagan himself knows so well from his Hollywood days: John Wayne and Charlton
Heston and Rambo out there dishing out justice in a manner only they could decide.
The Reaganauts didn’t like the strictures of Congress (otherwise known as laws) forbidding money going to rebels in Nicaragua. So they would “deregularize” that; find their own way around the law. Just as the Nixonites did, with a similar contempt for the dull elected people who sit in the House of Representatives and the Senate.
Wall Street took its signal from the same White House philosophy. What capitalism needed was less bothersome
triflings from federal overseers. What was needed was more buccaneer free enterprise, as Washington cut down not only on the number of air-traffic controllers but stock-market checks.
The result? As could be predicted, the belief that greed is good for you.
In 1980, the year Reagan came to power, the urge to merge saw 1,889 companies acquired at a cost of $44 billion. By last year the takeover and merger mania had risen to 3,356 mergers, at a total value of $177 billion. As a result of the greed, 11 of the best and brightest of Wall Street investment bankers and lawyers are now headed for jail. “It was like free sex,” says one banker. No one was getting caught, “so the atmosphere grew relaxed.”
Take Martin A. Siegel, glamor boy of Wall Street, 38, a legend after negotiating more than 500 mergers. The Harvard School of Business Administration grad pawed over 23 Wall Street offers before joining Kidder, Peabody. An Alfa Romeo, an apartment on the Upper
East Side, a Connecticut home on the beach with tennis court and gym, twins, and a helicopter to get him to work. When caught trading insider information, he agreed to pay $9 million restitution to the U.S. government—yet made only $700,000 in all for the tips he fed to the No. 1 Wall Street sleaze, Ivan Boesky.
Boesky, who made $28 million alone in one deal thanks to a Siegel tip, was able to pay $100 million in penalties to the government and is still not minus groceries. Kidder, Peabody was one of the first firms to institute comprehensive drug testing for employees. Unfortunately, they forgot about morality testing.
The pervasive morality is the trickle-down theory. Martin Marietta Corp., a Maryland-based aerospace giant that in 1986 reported $2.9 billion in defence-contract business, has just pleaded guilty to cheating the government of $1 million through a fraudulent scheme of travel-agency rebates. Why does a $2.9billion outfit cheat over $1 million?
Why does a Siegel who £ can find $9 million in t cash bother about a mea° sly $700,000? Why does a billionaire Boesky want to cheat for a few million more? Why, at New York’s prestigious Columbia University, did the number of MBAs hired by brokerage and investment firms last year represent 31 per cent of the grad class? And why did they start at an average salary of $48,000?
The institutionalization of greed starts at the top and has been encouraged at the top. The spreading scandal in the White House now involves the men at the very top, up to and including Chief of Staff Don Regan, the millionaire who made his fortune—and learned his lessons—on Wall Street as boss of Merrill Lynch. The guys they’ve just nabbed in Manhattan are not just the yuppie strivers like Siegel but now senior executives at such prestige firms as Goldman, Sachs and Kidder, Peabody.
When the rot sets in, it goes all through the tree, from bottom to top. In our current case, the rot—the belief that everyone was on their own— started at the White House in 1980.
Allan Fotheringham is a columnist for Southam News.
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