Ken Connor

"Do to others as you would have them do to you." (Luke 6:31 NIV)

Henry Paulson, Secretary of the Treasury and Chief Architect of the Wall Street Bailout, is dazed and confused. At least, that's the conclusion one can't help but arrive at after reading the recent two part story on him run by the Washington Post. The Post portrays Paulson as flip-flopping on his previous economic beliefs and making it up as he goes, all while aggregating an immense amount of power. Apparently many of Paulson's former colleagues are shocked by his quick reversal from a hard-nosed advocate of deregulation to a proponent of massive government intervention. One hedge fund manager mused, "What happened to the Hank Paulson we knew?"

What will be the outcome of Paulson's efforts to inject massive governmental involvement in the financial markets? Even he doesn't claim to know. But one thing is clear: Paulson's understanding of the markets he now seeks to short circuit is flawed because he ignores the importance of social ethics.

The term "market" has been bandied about often of late by members of the chattering class in Washington, D.C. and New York City. It is a "catch-phrase" for libertarians who put all their faith in unregulated markets and for liberals who want government to control the markets. What both sides fail to recognize is that the "market" is nothing more than the sum of individual human transactions in the marketplace. The responsibility for our current economic meltdown does not lie with some amorphous "market system" or a few obscure, but powerful, CEOs. No, the real responsibility lies with the myriad transactions of the millions of people who make up our economy.

In the aggregate, these transactions involve buying, selling, and trading. Each individual transaction is fraught will moral implications. All parties to a transaction have a moral responsibility to deal fairly and honestly with each other. The failure to live up to this responsibility on a massive scale has led to the crisis that now befuddles Secretary Paulson and threatens to be America's economic undoing.

It is easy to get bogged down in the complex details of possible "fix it" plans, but the root of our economic troubles is clear: People are selfish and greedy—they often ignore the good of their fellow man in pursuit of their own economic gain. Old-fashioned dishonesty in business gave birth to our current disaster.


Ken Connor

Ken Connor is Chairman of the Center for a Just Society in Washington, DC.