Liberals and Public Morality

I have previously discussed the first chapter of Robert Reich's Reason, in which he analyzes the rise of the "radical conservatives" who have come to dominate the modern Republican Party. The remainder of the book is divided into three sections, each an area of public policy in which Reich believes liberals have the right answers, but have allowed the "Radcons" to frame the debate in their favor.

I'd like to turn to the second chapter of his book, which he titles "Public Morality." Interestingly, Reich does not shy away from pushing a liberal agenda on public morality. In fact, he believes public morality is an area in which liberals should expand their influence. The first step is in properly defining the sphere appropriately:

Radcons are correct in one respect: Public morality is important. By shying away from discussing it, liberals allows Radcons to define public morality the way they see it. But public morality shouldn't be about private sex. Liberals should be screaming from the rooftops about the real decline of public morality, about the real abuses.

Reich includes in his list such abuses as fraudulent accounting and stock manipulation, tax evasion, executive pay, and financial conflicts of interest, many of which will sound familiar to those who have paid to the attention to the four years since Reich published his book. Reich points out that conservatives "equate sexual permissiveness with the erosion of public morality because they're obsessed by the decline of discipline in society. They don't worry about the misuse of authority because they're focused on obedience to it."

Think about this for a few minutes. When we as Americans think or talk about sexuality, we usually do it in moral terms. When we talk about business or economics, we rarely do. We have been trained to think of capitalism as inherently moral, or at worst, amoral. The "free market" is made an excuse for a free-for-all in which abuses of greed or corruption are seen as par for the course, or necessary evils. The introductions of moral decision-making into a business plan is considered laughable; indeed, to the extent it might interfere with the immediate financial well-being of large shareholders, it would be considered corporate malpractice. That is how far we have fallen.

Reich indicts liberals for complicity in this situation, as they have reacted against the conservative emphasis on sexual morality by simply abandoning the field:

Morality is sometimes hard for liberals to talk about. It seems too personal, too closely related to authoritarian religion, too easily used as a tool to justify or to condemn private behaviors. Moralists often strike liberals as being intolerant. Hence, many liberals have adopted a kind of moral relativism; no single version of morality is superior to any other. By this view, abuses of power may violate legal or economic principles, buy they don't raise moral issues.

This is a dangerous cop-out.

To their credit, Radcons have developed several useful ways to frame morality as a public issue. They go awry on the application of their ideas. Sex is the wrong target. But their willingness to introduce the concept of right and wrong into public discourse enables us to discuss why the abuses of authority that plague modern America are rightly matters of public concern.

He goes on to quote extensively from books by Bill Bennett and Robert Bork for the purpose of showing how persuasive their morality-based arguments are if shifted away from sexuality and onto abuses of power. Reich also succinctly rebuts the oft-repeated conservative talking points on premarital sex, the decline of marriage, and the separation of church and state.

Reich then turns his attention to the abuses of corporate power that liberals should make the focus of their own moral crusade. He highlights Enron as the "poster child," of this phenomenon, but emphasizes that Enron was no exception, it was the simply the most excessive example of abusive practices running throughout corporate America. He points out the tremendous conflicts-of-interest that continue to link the fates of bankers, large investors, corporate executives with the boards of directors and auditors who are supposed to be guarding the hen house. Reich also touches on a subject that has really made the headlines in the current financial crisis, executive pay:

Over the past twenty years, as executive pay moved into the stratosphere, the pay and benefits of average working Americans have gone essentially nowhere. In the 1990s, many of these same Americans invested their scant retirement savings in the stock market, only to discover--too late--that is was a bubble filled with hot air. Then they found out that a lot of reported corporate earnings had been pumped up with helium. CEOs, on the other hand, did just fine. Their "big money carrots" were real. They cashed in their options early enough to beat the imploding market.

Reich goes into detail on what he calls "legalized bribery," which is of course an indictment of the campaign finance system. I'd be interested to hear what he thinks of Senator Obama's fund-raising, which has been exceptional for its breadth and its depth, and its exclusion of any lobbyist or PAC money. [UPDATE: Reich endorsed Obama in April, but did not specifically mention fund-raising]. Reich also emphasizes that the occasional "perp walk" (e.g. Kenneth Lay, Bernie Ebbers) is not enough. Instead, liberals must take the lead in promoting legal enforcement of the public trust, but with a healthy dose of morality added to the mix:

It's time for a vigorous liberalism that holds morally accountable those who abuse their authority. We need moral as well as legal limits on rapacious CEOs, accountants, lawyers, brokers, and investment bankers--people who are stewards of the economy but don't give a damn what happens to the millions of small investors, as well as employees, they're supposed to represent.

The chapter falls short, however, on detailed solutions. Perhaps Reich offers those elsewhere, but it was disappointing to find a former cabinet secretary so light on particulars. While convinced by Reich's call for introducing a moral element to the fight against corporate abuses, that seems a long-term project. Reich is surely correct that the liberal movement against greed and corruption will be strengthened by the moral arguments he suggests.

In the short-term, however, the law can yield greater effect. Yet Reich gives no guidance on what the appropriate changes might be. We might consider an expansion of legally-enforceable fiduciary obligations to a wider group of professionals involved in corporate finance. Or perhaps greater regulation (or re-regulation, as the case may be) of the conflicts-of-interest that improperly link the fates of supposedly independent actors. I am no expert in the field, which is why I hoped for a bit more from Reich. In his defense, the chapter is largely focused on convincing liberals to recognize the moral, not legal, elements of corporate abuse; I simply wanted both.