WHY CAPITALISM IS AS PIE IN THE SKY AS COMMUNISM

Three big brokers charged with fraud

In an historic $1.4 billion settlement Monday, the government charged Merrill Lynch, Credit Suisse First Boston, and Citigroup's Salomon Smith Barney unit with issuing fraudulent research reports to win lucrative investment banking business.

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"Small investors were being led astray by fraudulent research," said Eliot Spitzer, attorney general for New York State, who spearheaded the settlement. "We have seen how crass this system was."

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As part of the settlement, regulators are expected to release scores of e-mails and other internal documents detailing how analysts publicly touted stocks while trashing them privately to attract lucrative underwriting business from the companies they covered.

This sort of thing, along with the recent wave of corporate and accounting scandals, is the result of a couple of decades of pro-business-at-any-cost rhetoric and policy--despite the conventional economic wisdom, free, unregulated markets are often extremely dangerous to our national well being. Once upon a time, it was understood in this country that money cannot be trusted to roam freely. After the collapse of the roaring economic bubble of the 1920s, the federal government enacted numerous banking and investment regulations that were designed to keep American wealth from eating itself. It took a little less than fifty years for capitalism's cannibalistic instinct to reassert itself: today we are learning lessons that have been known and forgotten. Click here to learn how Wall Street is now rediscovering common sense.

Thanks to J. Orlin Grabbe.

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