Never do I want to hear again from my conservative friends about how brilliant capitalists are, how much they deserve their seven-figure salaries and how government should keep its hands off the private economy.
The Wall Street titans have turned into a bunch of welfare clients. They are desperate to be bailed out by government from their own incompetence, and from the deregulatory regime for which they lobbied so hard. They have lost "confidence" in each other, you see, because none of these oh-so-wise captains of the universe have any idea what kinds of devalued securities sit in one another's portfolios.
So they have stopped investing. The biggest, most respected investment firms threaten to come crashing down.
But if this near meltdown of capitalism doesn't encourage a lot of people to question the principles they have carried in their heads for the past three decades or so, nothing will.
We had already learned the hard way -- in the crash of 1929 and the Depression that followed -- that capitalism is quite capable of running off the rails. Franklin Roosevelt's New Deal was a response to the failure of the geniuses of finance (and their defenders in the economics profession) to realize what was happening or to fix it in time.
As the economist John Kenneth Galbraith noted of the era leading up to the Depression, "The threat to men of great dignity, privilege and pretense is not from the radicals they revile; it is from accepting their own myth. Exposure to reality remains the nemesis of the great -- a little understood thing."
But in the enthusiasm for deregulation that took root in the late 1970s, flowered in the Reagan era and reached its apogee in the second Bush years, we forgot the lesson that government needs to keep a careful watch on what capitalists do. Of course, some deregulation can be salutary, and the market system is, on balance, a wondrous instrument -- when it works. But the free market is just that: an instrument, not a principle.
In the last 20 years, for-profit health care corporations seem to have turned their leaders into imperial CEOs. Their organizational cultures have been turned into cults of personality extolling the wisdom of their fearless leaders. Such brilliant leaders of course deserved equally brilliant compensation. So there have been plenty of CEOs of for-profit health care corporations who have had seven-figure-plus compensation. But sometimes, that compensation seemed not very proportional to their competence. (Remember the examples of the "brilliant" former CEO of UnitedHealth, or the former CEO of Pfizer Inc.)
Furthermore, the leaders of not-for-profit health care organizations have also become objects of personality cults, which suggested that they too deserved lavish, often seven-figure salaries and to live the high life at the expense of organizations whose missions are ostensibly to treat disease and reduce suffering, and/or to train students and pursue science. (See our latest example of the leaders of the University of Texas Southwestern Medical Center.)
We have often suggested that leaders who are more focused on their own wealth, power, and privilege may not be good at improving patient care, or advancing academic medicine.
So let us quote Galbraith again, and remember what he said applies well to leaders of health care organizations.
The threat to men of great dignity, privilege and pretense is not from the radicals they revile; it is from accepting their own myth. Exposure to reality remains the nemesis of the great -- a little understood thing.Far too many leaders of health care have accepted their own myth. Thus it is likely that all too soon, some important part of the health care system will come crashing down like Bear Stearns unless health care professionals and patients can shred these myths in time.
A big hat tip to Dr Peter Rost on the Question Authority Blog.