Why Congress Fails on Financial Reform

The growing public resentment of the mega financial institutions on Wall Street is without doubt justified as a critique and criticism of laissez-faire capitalism as an ideological force.  Much as the collapse of the Soviet Union spelled the demise of communism as a global ideological force, the financial crisis that started September 2008 with the collapse of Lehman Brothers is foretells the death throes of free market capitalism as a global ideological force.  With the rise of “state capitalism” (Bremmer, 2009), the world is beginning to look a little more like George Orwell’s 1984.  With the apparent takeovers of General Motors, AIG, and now perhaps British Petroleum's North American operations, the United States, along with China, Europe, India, and other quasi-capitalist states, has moved into the business of hands-on managing its economy.   There are three problems with government intervention into artificially or non-market based sustaining of the financial system and its mega-financial institutions: ethical responsibility, lack of accountability, and continued exploitation. First, reforming the financial system through government intervention will not bestow upon it the ethical responsibility necessary to sustain the economic well-being of the United States and the global economy.  Financial institutions have an ethical responsibility for sustaining, economically, the communities that they intimately exploit. By not adhering to the ethical responsibility of economic sustainability, financial institutions are constantly ‘playing chicken’ with the destruction of the very economies and communities that they exploit. Part of a financial institution’s ethical responsibility of economic sustainability is to know the impact that the institution has on the gross domestic product; the larger a financial institution’s share of GDP, the larger the financial institution’s obligation to do its part in sustaining the economy.