Monday, March 10, 2008

The Spirit of Client # 9 Lives On

http://www.thesmokinggun.com/archive/years/2008/0310082spitzer1.html

It is fitting that a man who built his career using the coercive power of the state to persecute businessmen for victimless "crimes" would have his career ended perpetrating a victimless crime. Despite the sense of good karma and the momentary satisfaction of seeing an evil weasel ruin his political career, the philosophy underlying Spitzer's rise to prominence, the ideas that led to the fawning media lauding "Elliot Ness" as the "Crusader of the Year" for fighting this so-called corruption, is alive and well.

The idea that the businessman is innately guilty, and the idea that those who seek profit and earn vast amounts of wealth are necessarily corrupt or that money making entails crushing others is alive and well. The Marxist idea that the capitalists on Wall Street are parasites who exploit the working man is alive and well. From the SEC's enforcement of the 1934 Securities Exchange Act, the 1940 Investment Advisers Act, and the more recent Sarbanes-Oxley Act of 2002, to the arbitary and vicious anti-trust laws, to the reign of ambitious bureacrats like Spitzer, the American government has treated businessmen worse than common criminals. To quote Ayn Rand (http://www.aynrandlexicon.com/lexicon/businessmen.html):

The legal treatment accorded to actual criminals is much superior to that accorded to businessmen. The criminal's rights are protected by objective laws, objective procedures, objective rules of evidence. A criminal is presumed to be innocent until he is proved guilty. Only businessmen—the producers, the providers, the supporters, the Atlases who carry our whole economy on their shoulders—are regarded as guilty by nature and are required to prove their innocence, without any definable criteria of innocence or proof, and are left at the mercy of the whim, the favor, or the malice of any publicity-seeking politician, any scheming statist, any envious mediocrity who might chance to work his way into a bureaucratic job and who feels a yen to do some trust-busting.

The dominant philosophy of our time is that man has a moral duty to live for others and that sacrifice to that end is the good. Since the businessman seeks profit he is castigated as evil. Throughout the culture, the businessman is villified. Movies and literature in popular culture cast the corporation and the greedy businessman as the proverbial villain raping and pillaging the earth or stepping on the "little guy". Business is seen as materialistic and selfish against the more noble pursuits of the idealistic artist or the social worker who helps the drug addict. This attitude is translated into laws which hold the businessman as guilty until proven innocent. Insider trading laws which are undefinable are used to arbitrarily prosecute traders. Anti-trust laws are used to punish those who should be congratulated as the most productive and efficient or to prevent necessary mergers and acquisitions. Now, under Sarbanes-Oxley, CEO's can be jailed if an accountant misses a figure in a thousand page financial statement. Businesses spend countless billions employing teams of accountants and lawyers to comply with the arbitrary mandates of the byzantine bureacracy.

In the past, going "public" was a badge of honor which opened a companies productive entrepreneurs to the vast capital markets, augmenting their ability to expand and improve their product, and enriching its public shareholders. More and more, companies are going "private" to avoid the regulatory costs (and risks) of being public. More and more companies will choose to stay small rather than risk exposure to these laws. Brilliant minds who otherwise would be engaged in productive work, will be employed to spend countless hours untangling the web of regulations and complying with endless government scrutiny. Each time a single fraud is committed somewhere in the universe, the government will tap it as further evidence of the innate evil of the unfettered businessman and the need for more power and regulations. The media clamor for more regulation and laud the bureacrats for protecting the masses from this alleged corruption.

Until great businessmen are revered as life giving heroes who translate ideas into material reality and benefit the lives of untold millions, we will have more Spitzers.

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