Monday, March 17, 2008
The problem with Corporatism is demonstrated by the exact situation we face today. Corporations, driven by short-term monetary objectives, cannot be trusted to act in their own long-term interest, or respect the most basic bounds of an advanced open and democratic society. Regulation is good when it rewards long-term thinking instead of penalizing it.
The real estate meltdown is a text book example of what happens in the absence of regulations that reward long-term thinking. Instantaneous gratification is not a good personal, business or societal model. Just ask Elliot Spitzer. Unfortunately, our consumption driven economy (due in part to the massive decline of making stuff in the U.S.) depends on instantaneous gratification . The concept of buy now, pay later has become this country's business model. We are now arriving at the "pay later" date.