It is the season for demonization, the time we select our candidates for president. Issue disagreements are not enough; villains must be identified and slain.

Donald Trump is the leading Republican “demonizer,” having gotten off to a quick start with attacks on immigrants in general and Mexicans and Muslims in particular. And it is a close race among the Republicans for who is best at making “Obama” sound like a four-letter word.

Although most of the demonizing is currently on the Republican side (happily the candidates are now primarily casting each other as the demons), Bernie Sanders, who is running largely on ideology, is not above demonizing, as the words “Wall Street” and “corrupt” are never far apart in his rhetoric.

But while Obama, immigrants, Mexicans and Muslims have their rightfully outraged defenders, no one is stepping up to defend the investment bankers of Wall Street. To the contrary, both parties are happy to portray them as evil incarnate (even if they greatly disagree on what to do about it).

Abhorring a vacuum, I will reluctantly offer a defense.

To say a kind word about investment bankers, one must say a kind work about capitalism. Whatever one thinks of capitalism in theory, it has proven the economic system most effective at providing quality goods and services at affordable prices and hence to the greatest number of people. Through competition, capitalism drives innovation and efficiency, thereby raising living standards, at least in a material sense.

Advertisement

And even though they do not invent or make things, investment bankers — yes, those horrible people at Goldman Sachs — are a necessary element of capitalism, as they steer profit-seeking capital to those individuals and entities that can most productively utilize it. Without that, the system does not work.

Capitalism does require regulation, for at least three reasons.

First, it can produce collateral damage of the sort not prevented by market forces, with environmental degradation being the most evident.

Second, it is prone to excesses, the recent financial crisis being a prime example.

Third, the point that is the focus of the Sanders’ campaign, it can lead to an unacceptable disparity in the distribution of wealth. But the need for regulation does not make its practitioners evil.

Eliciting sympathy for investment bankers is a tall order given that they make a ton of money, far more than most Mexicans and Muslims, and often considerably more than President Barack Obama. While I am inclined to believe that they earn “too much,” a feeling I also have about third basemen and the stars of zombie movies, that is a subjective judgment, and I do not favor government setting compensation.

Advertisement

I do think that Sanders’ proposal to increase the tax on investment bankers and other high-income folks and to use the proceeds to level the playing field by making education far more affordable is worthy of consideration. I only wish he would scrap his apparent belief that we cannot increase the tax burden on a particular group without making the case that its members do bad things.

Why should this matter given the privileged position of those on Wall Street? It matters because once one can say that Wall Street is corrupt (when most who work there are not), it becomes much easier to generalize from a few cases and imply, as Trump has, that Mexicans tend to be rapists and Muslims terrorists, or to take a generalization from the past, that people on welfare are cheats.

I recognize that demonization is as old as our republic, with Jefferson and Hamilton among its earliest and most skilled practitioners, the former compounding the wrong by carrying out his attacks through surrogates. But we have abandoned some of the abusive practices of our founders, slavery and dueling among them, and while demonizing one’s opponents is less serious, it deserves to join that list.

Thus, if Bernie Sanders wants to advocate higher taxes on Wall Street, I say have at it. I only ask that he do it without attacking those to be taxed, as taxation without vilification would be a welcome step toward a more civil democracy.

And given our governor’s practice of demonizing those who disagree with him, more civility in government is something the people of Maine desperately need.

As a former head of the Maine Office of Securities, in which capacity he regularly did battle with investment firms, Steve Diamond, who lives in Gardiner, considers himself an unlikely defender of Wall Street.


Only subscribers are eligible to post comments. Please subscribe or login first for digital access. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.

filed under: