Private enterprise worship exposed

The high priests of capitalism are in sackcloth and ashes, their belief in markets shattered, their catechism of risk-taking renounced. From Wall Street to Detroit, once-devout believers in unfettered private enterprise are running from their religion. Now that their greed has brought the economy to the brink of depression, they want government help.

What happened to those masters of the universe? What happened to their handmaidens, the Republican politicians who denounced government regulation and read from the holy scriptures as recorded by Ayn Rand?

When ordinary Americans began to lose their homes several months ago, conservatives were quick to denounce them for being too stupid to understand a simple mortgage or too undisciplined to know how to live within their means. The right-wing talking heads had a field day denouncing plumbers and painters, teachers and personal trainers threatened with foreclosure: They’re idiots! They’re losers! They’re suckers!

Well, it now seems there were quite a few idiots among the brokers and bankers who bundled loans in complicated investment vehicles they didn’t fully understand. They actually believed they could vastly increase the financial rewards they received while virtually eliminating the risk of losses. That’s the very definition of “sucker.”

This week, sensing shifting political winds, John McCain took to criticizing those Wall Street schemers, imbuing his speeches with a populist rhetoric intended to make you believe he’s always been a firm supporter of government regulation. On Monday, as the Dow was plummeting, McCain was the change agent, the reformer:

“The regulatory system is broken … We’ve got to catch up the regulatory bodies to make sure that there is the proper oversight and regulation and transparency. That is vital.” Actually, that is laughable. In March, McCain told The Wall Street Journal, “I am fundamentally a deregulator. I’d like to see a lot of the unnecessary government regulations eliminated.”

In a speech a few weeks later, he argued that our approach “should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments to raising capital.”

There is a reason for McCain’s two-and-a-half somersault. He knows the economy wouldn’t be in this mess if Congress had passed regulations to curb Wall Street excesses, so he’s feigning a sudden conversion.

So are the masters of the universe who created the vast Ponzi scheme that has entangled Wall Street, Main Street and markets around the world. After decades of fighting off government as intrusive, rigid, bureaucratic and downright dumb, financial titans are begging for taxpayer-backed bailouts. After the quasi-bailout of Bear Sterns, they were aghast when Treasury Secretary Henry Paulson refused to bail out Lehman. And they’re still betting that the government will come to the rescue whenever another giant company is about to collapse, as it apparently is poised to do in the case of AIG.

Wall Street kings are not the only ones begging for bailouts. Detroit automakers have also stuck their hands out, proposing that government fork over $50 billion to prop them up. They spent decades fending off efforts from Congress to improve fuel efficiency, insisting that American motorists only wanted huge gas-guzzlers. Now that they can’t sell those SUV-ehemoths, they’re staring at the possibility of financial collapse. Perhaps the pendulum is finally swinging back to a widespread recognition that government has a role to play in regulating markets, protecting consumers and providing a social safety net. That lesson comes at a very high cost: lost jobs, ruined retirement portfolios and added taxpayer debt to pay for bailouts.

Unfortunately, many experts believe the end is not in sight; it may be many months before the markets hit bottom and the economy starts a vigorous recovery. But there may be a small benefit in this catastrophe: The worship of unfettered private enterprise has been exposed for what it is —- just another cult.

cynthia@ajc.com