Janine Wedel - Unaccountable - How Elite Power Brokers Corrupt Our Finances, Freedom, and Security

This ubiquitous unaccountability, despite our supposed age of “transparency,” turns on the elusive origins of authority. It’s virtually impossible to identify the levers of authority or figure out where and how to intervene. The absence of responsible parties can lead to untruths that take on a life of their own. Without our knowledge or consent, the system can erroneously relegate us to the category of poor credit risk, debtor, or deadbeat—any of which could ruin our chance for a better mortgage or the ability to keep our house or even a much-needed job, and all of which could be resolved if the organization were set up to be accountable. 31Does this state of affairs encourage trust in governmental and corporate organizations in what’s supposed to be the world’s model democracy?

Because it is difficult, if not impossible, to challenge the insidious system, only the ethics or judgment of a few “bad apples” are questioned (think, for example, Fabrice Tourre of Goldman Sachs, a.k.a. “Fabulous Fab,” the rare Wall Street employee who the SEC found liable for securities fraud). But it shouldn’t be so difficult. Structured unaccountability has the potential to warp our lives and generate inequalities in ways both small and very, very big. Because Wall Street is still trading opaque, vastly complex financial instruments in a system mired in structured unaccountability, no one can really know, in a holistic sense, where the financial TNT has been planted, just waiting for detonation.

Unaccountability and Runaway Information

As we await the next explosion, twenty-first-century corporate and government organizations challenge accountability in an even broader way. They are constantly morphing their purposes, often far beneath the public radar—taking on totally different missions from those they advertise. While these are set up to look like we, the consumers/customers/clients, are empowered, the weight of their power is stacked against us.

The lifeblood of many organizations is now in information. Though a key purpose of a Bank of America is, supposedly, to answer to the client, “customer service” has evolved, at least in large part, into a means for getting the client’s personal information to use for direct advertising or market research—or even to sell to other companies or governments. Many government, corporate, and even campaign organizations have become secret services, gathering tons of information about us, often under the pretext that they’re working for us: keeping us in touch with friends (Facebook); giving us “points” when we make credit card purchases (card companies); “connecting” with a preferred political candidate; and even finding information for us (Google searches that prompt specific ads showing some of what they know about our lives). While harnessing the information we freely give up, Google, Facebook, Verizon, and other companies may dispute willing collaboration with government agencies. But the point is, how would we know if it weren’t for the Edward Snowdens of this world? 32

We want to be in the know, minute to minute, with our whole panoply of interests; but the implicit deal we make (with the devil?) is that powerful algorithms will amass an easily exploitable profile that might shock us with its specificity and invasiveness. At least one that should shock us.

Meanwhile, no matter how many revelations come to light, it’s never going to be clear who holds that information or what uses it is being put to—or could be put to—because, as I have said, authority in these organizations (and the wider systems in which they operate) is often hard to pin down or is even completely unknown to nearly everyone, even within the organization. There’s no real way of learning the truth in real time unless we are deep inside it. We, the public, can’t possibly compete with the organization, either in terms of knowledge about its operations or the specific data amassed.

And amassing they are. As the industry and intelligence of data-mining have risen, corporate and government organizations have joined forces. You can see it in the synergy between espionage agencies and the technology companies of Silicon Valley. 33The move of Max Kelly, the chief security officer for Facebook, to the NSA in 2010, for instance, “underscores the increasingly deep connections between Silicon Valley and the agency and the degree to which they are now in the same business,” the New York Times noted. The NSA may be concerned with intelligence and Silicon Valley with profit, but they “both hunt for ways to collect, analyze and exploit large pools of data about millions of Americans.” 34

Informality and Unaccountability

Silicon Valley and the tech sector, of course, excel at DIY (do-it-yourself)—from Uber cars to Airbnb to crowd-sourced venture capital. Their focus on private solutions to public problems largely leaves accountability behind. As a New Yorker article titled “Bay Watched: How San Francisco’s New Entrepreneurial Culture is Changing the Country” details, twenty-something “cool kids” at the business-digital cutting edge are merging moneymaking with new-age-style social purpose. (HBO this year debuted a trenchant satire show, Silicon Valley , depicting this unusual blend of capitalist and tech-powered idealism.) These new entrepreneurs are overtaking Wall Streeters as the model of success. 35They project being relaxed, casual—and informal—and also no doubt believe they are doing the right thing and that they have the expertise and the answers to big questions.

Informality has become the fashion of the moment on all kinds of levels, and you will see these loose ad hoc arrangements throughout the book. It runs the gamut from how you can now get a ride to the airport all the way to how war strategy is devised. I saw firsthand that informality was what enabled people under communism to survive, and there seem to be some parallels with twenty-first-century America. As I’ve said above, in 1980s Poland, the most ingenious eked out a livable life with creative dealmaking. Flash forward to today in the West. With an economy under severe stress, the most creative players have innovated, using technology to set up ventures like Airbnb, Task Rabbit, and Uber, where people can rent out their private resources—houses, labor, cars. This has brought part-time work and extra cash for those who use it, much as I saw in East Bloc Poland when regular people leveraged any tiny asset or resource they might have. The ones who’ve made out best, of course, are often the elite who own or invest in these burgeoning companies.

What’s more, informality is often found now—and even prized—among elites in policymaking and in ways that might be born of stress as well. As government becomes increasingly privatized, expertise is lacking when big public-policy decisions must be made. Players pull trusted friends in during a crisis (case in point: the financial bailout) or when life-and-death decisions must be made (another case: whether to stage a military “surge” in Afghanistan) and when making other policy choices.

So what’s wrong with informality? It is not in itself wrong, and surely it even has some clear benefits. But there is one thing that informality makes nearly impossible: accountability. If an informal group is involved in deciding policy, how do we know that the people chosen represent the variety of voices needed for vigorous debate? We certainly have plenty of examples, as you will see, of voices very much excluded from high-stakes debate. If the “cool kids” chosen to participate aren’t formally public servants, do they have the same ethics and disclosure rules? Usually not.

Sony Kapoor, that finance think-tanker who has been in and around the financial discussions taking place, told me that, in a crisis, there is the feeling among players that there is simply not enough time to amass the twenty people who should be in the room, and accountability becomes an afterthought. With regard to the 2008 financial crisis and bailout, Kapoor said: “[There was] next to no information on what central banks knew, what they thought the risks were. . . . Everyone was given the benefit of the doubt after the fact. . . . If it were any other part of government, there would have to be due diligence.”