In the name of free markets, we made ourselves and our economy vulnerable to the worst impulses of a greedy, remorseless few.

Truthdig - Reports - Slap Down ‘Free Market’ PiratesPosted on Mar 26, 2008 | By Joe Conason

For many years, Robert Morgenthau has warned America that the nexus of capitalism and criminality poses a serious threat to our prosperity, security and growth. Now in the wake of the collapse of Bear Stearns, which pushed global markets closer to the brink, perhaps the nation will listen to the Manhattan district attorney, whose scrutinizing gaze is fixed on targets well beyond New York.

As a legendary prosecutor of international financial crime, Morgenthau has long kept a watchful eye on the buccaneering crew at Bear, the firm that now symbolizes the worst in amoral capital. Its executives were notorious for testing the limits of the law by sheltering shady stock promoters and bucket-shop brokerages, and by swelling the assets of its hedge funds with dubious mortgage-backed assets.
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But as Morgenthau insists, we cannot sustain an economy of universal bailouts. A son of FDR’s treasury secretary, he understands how the New Deal saved democratic capitalism from mindless greed 75 years ago, and he knows that the undoing of those reforms during the past 25 years has led to our present troubles. More and more of our capital (including public pension funds) has moved into offshore havens, where banking and corporate secrecy laws allow hedge fund operators to avoid regulation and taxes. This escape from transparency will continue as long as it is permitted by law and rewarded by the tax code.

All that will soon have to end, or we will find ourselves again at the edge of disaster.
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As we mark the end of a long era of conservative excess, we could do much worse than heed Morgenthau’s advice. In the name of free markets, we made ourselves and our economy vulnerable to the worst impulses of a greedy, remorseless few. He saw that on the horizon and tried to tell us. Now, perhaps we will listen.