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Commentary | JOHN BALZAR

The New Ugly Americans Are Giving Us All a Bad Name

Corporate scandals stain the U.S. abroad.

July 07, 2002|JOHN BALZAR

GUANGZHOU, China — I've been feeling glum about the drift and shortsightedness of American business for some time. Being abroad and looking back at my homeland only makes me glummer.

The U.S. "war against terrorism" is a fight for our way of life, for ideals and idealism, for freedom and for opportunity. Back home, most of the people I know have hardly a doubt about the soundness of these things. Americans, I among them, have closed ranks behind the men and women who stand on the murky front lines of the battle.

But the relentless boardroom scandals of 2002 are undermining the nation abroad, and not just in the Muslim world or on hostile terrain. When someone like Intel's chairman, Andrew S. Grove, finds himself "feeling embarrassed and ashamed" to be an American business executive, he should be. The country's global leadership--its example to the world--is as easy to doubt as to believe in right now. Yes, countries like China and other developing nations around the world know greed and corruption. But the U.S. has for a long time projected itself as different--a country where integrity and prosperity are maintained by self-governance and lofty principles of justice.

Not so these days.

Americans aren't alone in understanding that what has engulfed U.S. business is not the corruption of an individual or an administration or a party or an industry but the corruption of a system. Sadly, it is the system that the United States is trying to sell--or, let's say, defend--as the model for the world.

Many Americans view the rot in our entrepreneurial values, vast as it is, as a momentary and correctable turn of events. Unfortunately, the disclosures spill forth at the precise moment when skeptics abroad are hungry to capitalize on any evidence of our moral failings.

"For a superpower, as America calls itself, your house is in disarray, am I right?" asks a Chinese businesswoman over dinner. How does a visiting American answer such a question today?

China has embraced free markets with barely bounded enthusiasm, and this southern megalopolis of Guangzhou is where the boom has the greatest momentum. But the Chinese I spoke with, as well as the English-language press in Asia, make clear that the United States' claim to be the custodian of free-market leadership is open to challenge.

The flood of American manufacturing investment into China is not necessarily a show of power. American industry is not seen as expanding so much as it is fleeing, as if something is wrong at home. Headlines circle the world with revelations of accounting frauds, mass layoffs, insider trading, stock market shenanigans, pension rip-offs and tax evasion, and they compound a darkening picture of Uncle Sam.

In my conversations, Chinese were particularly attentive to widespread job cuts and huge retirement losses inflicted on millions of working people as a result of business corruption and the implicit belief that the U.S. government is culpable in events. That differentiates this scandal from Bill Clinton's dalliances or Ronald Reagan's Iran-Contra or Richard Nixon's Watergate--transgressions that ultimately wound up reinforcing the nation's strait-laced values. By contrast, the misdoings of corporate executives and their perceived insider domination of the government at the expense of the citizenry reduce the U.S. to the stature of lesser nations.

The Chinese don't view these events as bystanders, but as distant victims. The fizzling of stock investments in the U.S. has dragged down markets worldwide, and Asian newspapers protest, "We don't deserve this." The result is a blow to the fundamental American message that free markets thrive for the betterment of everyone under the hand of U.S.-style pluralism.

"Good government," said Confucius, "obtains when those who are near are made happy, and those far off are attracted." Who could blame Chinese or Africans or Latin Americans for not finding American mores so attractive just now? The looting of a nation's wealth by a few is something long associated with despots, not idealists. The country that demands "transparency" in the affairs of other nations is now unmasked for secret dealings that ended up with billions of dollars going missing.

As the U.S. looks for friends in the world, might and muscle count for plenty. But the only true and lasting argument for democracy is its example.

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