OK, so let’s review …
In 2001, Enron and WorldCom set off a financial firestorm because they played fast and loose with their numbers, and their accounting firm, which was supposed to hold them to honest standards, gave them a pass because those companies were such big business that they didn’t want to lose them.
Industry failed to regulate itself and eventually it collapsed, and the result was a small recession and hundreds of thousands of ordinary people — who had relied on the system to give them honest information about what they were investing in — lost their savings, retirement accounts and financial futures.
By 2008, major financial institutions had been rigging significant financial indicators and enabling a dirty mortgage industry to flourish. They had convinced (almost) everyone that it would go on forever … but even cheating as much as they were, they were completely wrong. The degree to which they were getting away with rigging the system rotted the system, until eventually — once again — it collapsed. And this time it would have triggered a global financial meltdown if the very taxpayers they had been cheating hadn’t bailed them out. We all suffered through that recession and are still suffering from the repercussions.
Are you seeing a pattern here? When industry isn’t regulated, it eventually stops regulating itself — and then it collapses, taking everything down with it.
It’s happening again with big tech “unicorns” that were propped up by Wall Street … despite the fact that they never made a profit and that it was never clear how they would make a profit. The financial laws of cause and effect were suspended for them. Now, they’re starting to collapse and they’re not just taking down investors … they’re taking down their employees, and they already hurt all the people who were running actual businesses with actual revenue streams who couldn’t compete against Wall Street pouring billions into businesses that were allowed to lose money. Those billions invested hurt competing businesses, artificially inflated real estate prices, upended traditional industries (like taxis) that nobody loved but that were at least functional and allowed people to make a living.
There’s an obvious lesson here: when enough people in systems get away with breaking rules, the systems eventually collapse and take innocent people down with them. Some of the people breaking the rules (or, ya know, “committing crimes,” which is what usually happened) may end up profiting from the catastrophe: Uber’s founder, Travis Kalanick, walked away with billions for creating a company that never turned a profit but wrecked all its functional competition, and WeWork’s founder Adam Neumann got paid billions to leave a company worth a fraction of the value he claimed it was.
They’re doing fine. But the damage they do to everyone around them — to us — is incalculable. And the more they succeed by gaming the system, the more the systems we depend on to live in the global economy crumble and rot.
The same thing applies in politics. The more politicians get away with breaking rules, the more our political system crumbles and rots.
When a president can successfully be above the law, the law itself collapses, just like when big businesses cheat and commit fraud — even if they’re successful — the economic systems around them collapse. Donald Trump is the Enron of our politics. The only way he succeeds, at this point is if he can break everything else in government.
And isn’t it interesting that the very politicians who say that businesses should never be regulated — that they should get to regulate themselves, despite that being catastrophic for the American people, again and again and again — are also the politicians saying that a president should get to regulate himself, no matter what he does. That any investigation of how he’s used his power is out of bounds. That the law can’t touch him, because he is the law.
Some people are very comfortable breaking everything, as long as it turns out well for them.
But, just to be clear, those people are not on your side. They are the people taking advantage of you.
When did we stop understanding that people who cannot be trusted to uphold just laws cannot be trusted at all? How did that happen?
Essay: Stop allowing politicians to break the rules
OK, so let’s review …