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119 Civic Empowerment in an Age of Corporate Excess ED LORENZ They were careless people . . . they smashed up things and creatures and then retreated back into their money or their vast carelessness, or whatever it was that kept them together and let other people clean up the mess they had made. —F. SCOTT FITZGERALD, THE GREAT GATSBY While innumerable historic examples exist of abuse of individual power and excessive self-interest, recent financial crises illustrate that today such abuses can impact large numbers of people and communities around the globe. Individual excess transitioned into fundamental societal problem when its pathologies are magnified in corporations no longer properly controlled by either civic processes or cultural norms. As the early twentyfirst -century financial crises unfolded, a common error of analysis focused on relatively recent changes in law or policy that encouraged imprudent behavior, such as the repeal of bank regulations or public finance modifications (Grumet, 2009). The problems that became evident in the fall of 2008 had been brewing in American business and civil society for decades and were grounded not merely in contemporary leadership mistakes, however grievous, but primarily in much longer-term civic, economic, and environmental ideologies and practices. There is no better way to see this than through a case study of a group of firms that at one time or another were linked to Fruit of the Loom. Politically and economically they often modeled exploitation if not contempt for local communities, their workers, and their investors. Environmentally, the former chemical subsidiary Velsicol left a multistate legacy of carelessly dumped chemical and radioactive wastes. Rather than be distracted by recent flagrant financial misjudgments, we should understand what this case study reveals about the need for widespread and systematic reforms, ranging from U.S. institutional leadership practices to renewed citizen empowerment, if the real sources of the current problems are to be addressed. The case of Fruit of the Loom exposes two primary sources of the economic and cultural maladies of the new millennium as well as effective ways of curing them. First, the firm’s history illustrates how poor corporate and civic leadership can negatively affect workers and residents of host communities, the natural world, and ultimately the economic viability of companies themselves. Advocates of sustainable capitalism have called these three dimensions of corporate impact the triple bottom line (Gray and Bebbington, 2001; 120| Ed Lorenz Hawken, 1993; Hawken, Lovins, and Lovins, 1999). Velsicol’s behaviors, which first appeared confined to egregious environmental practices, demonstrated that disregard for any of the three dimensions likely will undermine continued success in the other two. The business media, as well as the scientific and technical professionals who worked for and with the firm, blindly dismissed early concerns with Velsicol’s environmental impact or later the movement of Fruit’s jobs out of historic host communities as inevitable adjustments to allow the firms to remain competitive. Fruit’s bankruptcy in late 1999 proved the error of such compartmentalized economics. Reviewing the history of this company is especially helpful because of its links to some of the most flawed leaders in finance and government. As the national economy unraveled in 2008 and 2009, even casual observers of U.S. leadership recognized Fruit’s collaborators as failures. Whether junk bond promoters such as Michael Milken, insurance schemers at AIG, or officials of the Federal Reserve, all had helped Fruit flounder yet had survived its collapse. The core danger of the 2008–9 collapse, as the earlier problems in with savings and loans, was not the loss of jobs and wealth, but that the response would be the use of short-term public subsidies to allow failed leaders and practices to continue. The public therefore urgently needs to review the longer-term history of the behaviors that underlay contemporary crises rather than focus only on mistakes tied to mortgages, auto production, or public finance. The study of Fruit of the Loom and the companies that became part of its complex structure shows, for example, that the insurance giant AIG did not merely speculate carelessly in the “subprime” mortgage market, but speculated more generally in other high-risk insurance schemes (Dobaro, 2009). Examining the history of Fruit of the Loom also shows the long-term consequences of deregulation of the financial sector and promotion of excessive debt financing (Barth, Brunbaugh, and Wilson, 2000). While detrimental to the firm’s workers, host communities, natural environment, and outside investors, these schemes transferred massive amounts of wealth, especially savings accumulated...

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