Larry Summers, Fantasy Fiction Writer

Aaaaargh. Just aaaaaargh. This is the kind of thinking that makes me want to slam my head repeatedly against a large gold brick (assuming any can still be found, of course) – this is Summers on This Weak with George “I’m Outta Here” Stephanopoulos:

Summers defended Obama’s attempts to persuade banks to increase lending. “The country did incredible things for the banking industry. Those things had to be done to save the economy, but no major bank would be intact, in a position to pay bonuses, if that extraordinary support had not been provided. The bankers need to recognize that. They need to recognize that they’ve got obligations to the country after all that’s been done for them, and there is a lot more they can do, and President Obama is going to be talking with them about what they can do to support enhanced lending to customers across the country. We were there for them. And the banks need to do everything they can to be sure they’re there for customers across this country.” (emphasis added by me)

They (bankers) need to recognize that? They need to do everything they can?

Larry, you may have been the President of Harvard, you may be one of the top economics minds in the country, if not the world, but apparently none of that prevents you from suffering a very low-tech case of hearing/seeing what you want to hear/see. Bankers don’t need to recognize jack shit, unfortunately, nor do they need, on a company level, to “do everything they can” for customers and citizens. YOU may need or want them to do that, but they need no such thing. You’re expecting them to feel such a “need” out of a sense of harmony and Americanism and a pull-together, “can-do” spirit….something which it might be reasonable to expect from a given individual, but something which is simply irrational to expect from a corporation. Which, after all, is what you’re dealing with in this case. You say “bankers,” like they’re individual people you can meet and shake hands with. And, of course, every bank is indeed staffed by individual people – you are probably on a first-name basis with many of the higher-ups at the major banks. But you are not asking individual men, your colleagues and perhaps friends, those whom you refer to as “bankers” to do something or understand something. You are asking the corporations themselves, of which these men are only a portion — and oftentimes not the controlling voice — to do things or understand things or “see” things.

Ever since the court reporter in the Santa Clara v. Southern Pacific Railroad case wrote down the prefatory remark of Justice Waite that “the court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of opinion that it does,” the American financial elite – people like you, Mr. Summers – have been suffering under this court-ratified notion that corporations are people, and entitled to the full rights thereof. Any third-grader could tell you that such a notion- that corporations are people – is nonsense in the most literal sense of the word. Corporations do not bleed, they do not breathe, they do not eat or sleep, and (perhaps most importantly) they do not die (or at least they are not condemned to mortality as all humans are). There are any number of ways a literate primary schooler could demonstrate that corporations are most assuredly not people.

But what you and far too many of the other high-flying, hyper-educated minds of finance have focused on is not the literal sense of corporations being people under the law, but the figurative sense. Yes, I’m sure, if asked, any of you would freely and quickly admit that you’re aware that of course corporations aren’t actually corporeal persons. But in practice, you’ve allowed the court-defined “personhood” of corporations to cloud your thinking so badly that you actually utter sentences like the above highlighted ones which are nonsensical on their very face, without seeming to realize the very, VERY basic error contained within it – an error that those same third-graders I mentioned, probably owing to their much closer attachment to and involvement in the world of the real and not the figurative, would never have made.

Think about what you just said: that banks (not “bankers,” but banks) need to recognize that “no major bank would be intact, in a position to pay bonuses, if that extraordinary support had not been provided. Here is where the fact that corporations are NOT actually people matters greatly. What is a bank’s motivation? It is to survive and flourish (in that sense, it is like all living things). And in what sense is the phrase “survive and thrive” defined for a bank? It is by increasing its own total revenue and profits. There are literally no other concerns. People may have consciences or senses of citizenship or patriotism, corporations – and perhaps especially banks – do not. They have boards of directors and shareholders, instead. Boards which consist of a variety of different men and women, with perhaps very different views on how things should be handled, but always with the overarching pressure and dictum that success is defined by bringing more financial value to the shareholders.

If there is one path of action to proceed down which will help small businesses get loans and will support mortgage holders from being foreclosed upon, which will return X amount of profit, and another path of action which will return 30% higher profits and revenue than the first path, but which will not help out mortgage holders or small businesses, the bank will always – ALWAYS – choose the latter, because the second path of action results in getting results which more closely match success, as defined in the only terms that matter to the bank. It’s not even something which they can be blamed for: corporations exist to make money; that’s what they DO. Individuals who work in those corporations, even at the highest levels, may have misgivings about pursuing courses of action which either don’t help or even actually hurt small businesses and homeowners at a time of economic hardship, but none of those individuals, by thmselves, actually RUNS the bank. Even the CEO, who might be viewed as the person most directly responsible for running the bank, if faced with a choice between doing something that “gives back” to the community but earns less profit for the bank, and doing whatever maximizes bank profits and revenue, even if it stiffs the very taxpayers in the community that just bailed it out, will be thinking that if he or she pursues the more “socially responsible” course of action, the board might very well decide to replace or fire him or her for managerial negligence, for not “doing right by” the shareholders.

Bottom line: of all the differences I listed between corporations and actual people, the one that’s most dangerously overlooked by people like you, Mr. Summers, is not that banks don’t breathe or eat or sleep, but that they don’t FEEL. They don’t have consciences. They (the corporate entities themselves) don’t have senses of patriotism or decency or philanthropy. Period. It is the role of government, not corporations, to think about the common welfare of all, and to set in place adequate protections and guidelines and restrictions to show the corporations where the dimensions are within which they must act – and outside of which they cannot stray. After the Great Depression, everyone from Franklin Roosevelt to the lowliest laborer understood this, and they set in place the regulations which kept this country from significant financial catastrophe for almost fifty years (until about 1980).

But today, I see the greatest minds and the most powerful people making statements that show such hard-won knowledge is all but gone. Expecting an unfeeling, non-human corporate entity to behave with the sensibilities of an actual person is like my six year old son not understanding why the family cat doesn’t stop attacking birds on the back deck near the bird feeder. At six years old, it’s hard for me to explain to him that the reason the cat continues to do this is because that’s her nature – that’s what she does to survive (even though we keep her food bowl stocked). I would think – no, I would HOPE – that you and other “masters of the universe” who toy with the real worlds of over three hundred million souls, as you move pieces around the financial chessboard, would realize that banks will never act with the consciences of people because banks are not people…and that it is simply in both their nature and often, their corporate charter, to simply make as much money, as efficiently and with as little loss as possible, for themselves and their investors. Period.

But statements like the above lead me to strongly suspect that you have not gotten this point through your collective heads yet. And you need to do so — a statement I can make to you without irony because you ARE an actual person with real senses of community and patriotism and fairness and interdependence.