For The Shadow Elite Failure Often Guarantees Future RewardsSubmitted by JoeDanger on Sat, 01/16/2010 - 21:00
Far from the old pull-yourself-up-by-the-bootstraps model of acknowledging failure and starting anew, the shadow elite do not admit failure at all. More important, past failure may guarantee their future success. When most of us fail, consequences are not widespread. When the shadow elite fail, it affects all of us because their power is pervasive and they are largely beyond accountability. For confirmation one need only look as far as two of the country's top economic helmsmen, Robert Rubin and Larry Summers.
Rubin and Summers, "flexians" and their "flex nets" , continue to be rewarded--and rewarded big--for their failures. Those rewards extend to giving them the reins of power to shape what our financial system will look like well into the future. The tendency to reward the failure of the top-most flexians has brought us to a dangerous point in U.S. history, in which state and market power are increasingly intertwined.
We have seen the disastrous effects of this for both democracy and the free market before. Take Russia, for instance. A small coterie of Russian and American players, entrusted after the collapse of the Soviet Union with creating a market economy with a legal and regulatory backbone, failed utterly. Instead, they facilitated the opposite: a corrupt bureaucracy that virtually precluded the development of free markets and the expansion of an unaccountable state with a democratic facade. This all took place under Rubin and Summers' watch and with their encouragement and sponsorship, when they were both at the Treasury Department.