You could see the angst on United States President, George Bush’s face last week, as he struggled to look tough on guys in corporate boardrooms wearing business suits. You could tell he was itching to get back to something more comfortable, like smokin’ out guys in faraway caves wearing funny-looking outfits.

If last September’s terrorist attacks were the best thing that ever happened to President George W. Bush, the unveiling of widespread corporate hooliganism at the heart of American capitalism in recent months is the toughest development he’s had to face.

Turning on friends and political donors is never easy. There’s also the embarrassment of explaining his own behaviour as a corporate director, such as the selling of his shares in Harken Energy just before ordinary shareholders — who didn’t have the benefit of sitting on the audit committee — discovered they faced massive losses.

As Bush noted in his speech to Wall Street last week: “Corporate leaders who violate the public trust should never be given that trust again.” (Note that he carefully avoided mentioning whether there was anything wrong with them going on to be President.)

Another danger is that the public will begin questioning the very nature of the unbridled capitalism under which members of the financial elite have in the last two decades twisted and contorted the system in every possible way — legally and illegally, it turns out — to massively enrich themselves.

Bush’s tax cut, for instance, will transfer immense wealth over the next decade to the already hyper-rich. According to the Washington-based Citizens for Tax Justice, some $US477-billion dollars — more than half of the total savings — will go to the top one per cent of Americans, who will save $342,000 EACH.

When this sort of rapacious behaviour on the part of the elite is the basis of public policy, it surely sends a message that any maneuvering in the quest for personal enrichment is okay … at least for those with access to a good accounting firm.

It’s interesting to note how far things have moved from the days when governments were expected to protect something called the “public good.” Even traditional conservatives like Henry C. Simons, a founder of the Chicago School – one of the better known American “schools” of economics, defended progressive taxation as a tool to prevent excessive inequality. Simons noted: “There is something unlovely to modern, as against medieval minds, about marked inequality.”

The medieval mindset has clearly made a comeback in the postmodern era. All this has been done beneath a banner of “freeing up the market,” accompanied by extravagant claims that we’ll all benefit. The market is portrayed as an arena of efficiency, where decisions are based on scientific laws like supply and demand, and where one gets by on merit, not on the kind of crony connections that ruled the old-style tribal economies of pre-market days.

But today’s brand of capitalism bears little resemblance to this mythical market model, except at the lower levels where the market power of capital effectively keeps workers in line.

At the top, the old-boy, crony network continues to thrive. Corporate managers, even those running badly failing enterprises, routinely win multi-million-dollar stock option packages from corporate boards filled with friends and colleagues who understand that a rising tide of corporate compensation lifts all boats.

The collegial atmosphere of all this would make even the most primitive tribal chief feel right at home. It’s hard to see anything particularly efficient about it though. (It’s also hard to imagine how the father of capitalism (author of The Wealth of the Nations) Adam Smith’s vision of everyone rationally pursuing his or her own self-interest can even happen when modern accounting trickery prevents the players from seeing where their self-interest actually lies.)

Of course, nobody exemplifies the world of cronyism and old boyism better than Bush, whose family not only provided him with personal wealth but also pretty much arranged for him to take over the leadership of the “free world.” (Or is there somebody somewhere who thinks George W. Bush could have risen to the presidency even if he’d been adopted at birth by a family in the South Bronx?)

Bush struggled last week to imbue current-day capitalism with some kind of moral substance. “In the long run, there is no capitalism without conscience, there is no wealth without character.” Really? As a philosophical observation, this is about on a par with “Shopping is good.” One can only speculate what Bush meant — that having money builds character or having character builds money? (Those guys driving Jaguars must be saints.)

Meanwhile, it’s no accident The New York Times ran a front-page story about stepped-up plans to bomb Iraq the same day it reported Bush’s Wall Street speech. The temptation to get the focus back onto those menacing-looking men in funny-looking outfits is clearly huge. Saddam better pray that the accounting profession sorts itself out quickly.

Linda McQuaig

Journalist and best-selling author Linda McQuaig has developed a reputation for challenging the establishment. As a reporter for The Globe and Mail, she won a National Newspaper Award in 1989...