When corporate or government institutions become too big and too socially destructive to exist, we need a graceful method of putting them on a diet and reforming their lifestyle.
The American genius for creating magnificently productive mega-institutions has a potentially fatal downside: we have, as a society, no idea how to downsize them when they "go rogue," i.e., become socially destructive. On balance, today, several of America's major mega-institutions--the Imperial Presidency, Big Oil, Big Pharma, and Big Finance--either are or are fast becoming socially destructive. They are "too big to exist;" we need to figure out how to downsize them gracefully, reorienting them toward socially useful behavior.
Perhaps the first step toward this new way of thinking that needs to replace the tarnished old "bigger is better" mantra is to understand the evidence supporting the contention that these mega-institutions are so bloated that American and, indeed, global society can no longer afford them. (I call these social units "institutions" because each is truly a unified organization composed of, perhaps, separate governmental or private units, but operating according to a clear if unstated and frequently illegal set of monopolistic rules designed to maximize profit and power at public expense and, in the case of the Imperial Presidency, at the expense of the rest of the Government as well.) Consider the following examples of mega-institution misbehavior:
- The Imperial Presidency, i.e., the rising ability of the White House and all its military-industrial support mechanism to overshadow Congress and Constitution on foreign policy, now employs something in the neighborhood of a quarter of a million mercenaries overseas, constituting an armed force capable of making independent war on most countries--completely outside of Congressional control and often beyond the reach of U.S. judicial authorities [see Jean MacKenzie, Jeremy Scahill, Glen Ford]. Since Augustus overthrew the Roman Republic with his palace guards and established the Roman Empire, we have known the profound threat to democracy posed by a mercenary army under the command of the chief executive.
- Big Pharma, constituting the whole U.S. health care industry, has degenerated so far that, to boost profits, it now essentially writes off as a "business loss" all of the nationa's elderly with the almost universal cognitive problems associated with aging. At their most vulnerable, they are thrown into the arms of untrained relatives utterly unprepared for 24/7 nursing.
- Big Oil, alb eit receiv ing billions annually in welfare payments from U.S. taxpayers, can destroy ever-growing chunks of the earth through careless cost-cutting measures and escape responsibility. For the rest of our lives, we will be watching BP's poison creep with Gulf Stream currents up the North American east coast and over toward England, while everyone complains about $4 a gallon gas, a price only a fraction of the real cost.
- As for Big Finance, the cost of its irresponsibility is now glaringly obvious to everyone. At the very least, Wall St. should keep accurate books, and regulators should scrutinize them.
Key to the smooth downsizing of rogue mega-institutions is twofold: 1) the breakthrough understanding of the bottom line insight that a cherished social structure has outlived its usefulness as currently designed combined with 2) the identification of specific traits requiring elimination. Specific reforms (Step 2) without acceptance of the goal of institutional downsizing, and redirection into a socially beneficial mode misses the point. That was the mistake of the Wall Street bailout, which successfully saved the bad old exploitative system rather than taking the opportunity to dismantle it by, for example, rebuilding the wall between the stock market and personal savings accounts. Similarly, eliminating mercenary forces while leaving the political supremacy over Congress of the Imperial Presidency untouched will only have a temporary impact. Surgical removal of a specific cancerous tumor must be done in the context of lifestyle changes related to nutrition, avoiding pesticides, and exercise.
Rogue mega-institutions must be recognized as enemies of society and redesigned to return to their proper purpose of servinhg society. The Presidency's power should be balanced with that of Congress; stock market investments should b e used to stimulate growth, not gamble with people's mortgages and savings accounts; the health care system should exist to provide a universal right, not to make a profit; the cost of gas should b e set by government to reflect its true value, incluyding the cost of pollution clean-up and the cost of wars fought to get the oil. And no industry that takes welfare from the taxpayer should turn its leaders into billionaires immune from prosecution.
To its credit, Washington is at least thinking about this issue. See comments by FDIC's Sheila Bair.