As if looting Main Street of its savings, pensions, and that precious thing called trust weren't enough, now Wall Street paints a target on our backs.
The unease begins with the title of the lead story in The New York Times: "Banks bet Greece defaults on debt they helped hide." [Read here.]
Uh-oh, my instinct for survival alerts me: Sounds like double-dealing, an invitation to retaliation. I hope American banks aren't involved. I read on and my fears of double-dealing and American involvement are soon confirmed: Banks -- including notably the American mega-bank Goldman Sachs -- that for the past decade helped Greece mask its spiraling debt with creative refinancing may now be pushing Greece "closer to the brink" by betting it will default. How? With credit default swaps, the instruments that "nearly toppled" AIG, the mega-insurance company. Why oh why, I wonder, aren't these ruinous 'instruments' outlawed or at least very tightly regulated? Straining to keep its prose grey, the Times writes that these swaps "effectively let banks and hedge funds wager on the financial equivalent of a four-alarm fire." Effectively? By now my hair effectively catches fire. The story goes on, "If Greece reneges on its debts, traders who own these swaps stand to profit."
But before I can ask myself again the question that never gets answered -- How can Wall Streeters who do these things live with themselves? -- a more urgent question intrudes:
Don't these traders -- these American traders -- also stand to trigger retaliation on the United States....?
If the stated motivation of those perpetrating September 11 was to strike at the heart of money Capitalism -- New York City -- as well as the symbolic seat of the superpower's power, Washington, D.C., this new proof of Capitalism's unquenchable lust for money only multiplies that motivation and even justifies it. Given the universally acknowledged truth that Wall Street started the financial crisis now upending the globe, America needs to demonstrate a sincere commitment to reform its financial institutions, especially if it presumes to lead in reforming the international system.
But actions like Goldman Sachs' make it appear that, rather than reforming, Wall Street is doubling down on its usual double-dealing and, moreover, that Washington is helpless to stop it, or is unwilling to and thus complicit.
The question becomes: How patient can we expect the world to be with America's continuing irresponsibility? When does patience jump the rails of protocol and give way to revenge and payback? Revenge and payback, moreover, targeted not only at New York but, like last Christmas' attempted bombing over Detroit, aimed at Main Street too?
For refreshing the bull's eye on our backs, I could be ironic and say, "Thanks, banksters," but why state the opposite of what I feel: unease?
What is especially unjust about this state is that, yet again, the responsible public is being set up by the irresponsible. Yet again, the responsible citizen---we who enjoy our rights but are also scrupulous about our responsibilities to community and nation---are treated with heedless contempt by the irresponsible, who by definition don't consider community or nation, who, in Wall Street's case, consider only profits---even to the point of imperiling us on Main Street. Much is made of the public's growing anger; I submit that, more than the Tea Partiers' anger at all things government, the anger of the responsible public at being literally held hostage to fortune by Wall Street and left unprotected by government is the anger that counts. (I blogged earlier about my fear for the nation if the responsible citizen should finally be forced to ask, Why be responsible, why be ethical?)
What is to be done? Ben Bernanke, Fed chairman, has announced an investigation into Goldman Sachs' role in Greece's debt crisis; if the bank is found at fault, he says, it would be "counter-productive." (Well, yes, it would be.) Greece's new prime minister, George Papandreou, in Washington recently, acknowledged his country's fiscal laxness while calling for regulation of "unprincipled speculators." It remains to be seen if the financial reform bills now brewing in Congress will close down Wall Street's casino and return it to utilities status. This week's bill introduced by Christopher Dodd, Senate Banking Committee chairman, holds the promise, among other substantive reforms, of imposing regulation on derivatives, including those ruinous credit-default swaps.
But: Of the national security dimension of Wall Street's irresponsibility and its capacity to trigger retaliation, there's been little discussion. Should not this be an agenda item for Congress' foreign affairs and national security committees? Here's the perfect opportunity for bipartisanship---Republicans, who constantly beat the drum about "keeping America safe," working with Democrats for the common defense.
Meanwhile, our culture must reform too. The cover of the current Vanity Fair trumpets "Greed is still good," with actor Michael Douglas still smirking as the monstrous Gordon Gekko of the 1987 movie, Wall Street. Time to push back, America: "No, greed is not good." A good neighbor policy, it's definitely not.
Finally, Wall Street itself, in its eternal acquisitional push, might acquire a sense of responsibility for the nation's welfare. Instead of pondering superfluous things like branding---instrumental in the Greece deal was the Goldman Sachs-backed outfit, iTraxx SovX Western Europe Index, a handle too hip by half---it might ponder deeper things, like how its operations impact the ultimate bottom line.
For, to expand on Shakespeare's famous soliloquy: "To be responsible or not to be responsible, that is the question." The question is not only the imperatives of equity and stability, but also---connecting finally all the dots between "over there" and Main Street---national security.
[For more on Goldman Sachs and Greece, see economist Simon Johnson here and here, the latter discussing a speech by Sen. Ted Kaufman, D.-Del. and member of the Senate Judiciary Committee, on Goldman Sachs' possible criminal fraud.]
Carla Seaquist's book, "Manufacturing Hope: Post-9/11 Notes on Politics, Culture, Torture, and the American Character," a collection of op-eds, essays, and dialogues, is now out. Also a playwright, she is working on a play titled "Prodigal" (www.carlaseaquist.com).
Reading, a few things come to mind:
First, a wonderful documentary, entitled “The Corporation.” If you haven’t seen it, it’s available on YouTube. A brief summary:
After the Civil War, the US enacted the Fourteenth Amendment to aid newly-freed slaves.
By usurping the 14th Amendment, corporations (abetted by the then Supreme Court) gained all the rights of a person, but without conscience . . . becoming (according to the Personality Diagnostic Checklist from the World Health Organization’s “Manual of Mental Disorders”) a "psychopathic" individual.
I’m also reminded of Alan Greenspan’s testimony before Congress, following the (near?) collapse of the banking industry, “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief.”
Really? An industry, made up of corporations, with all the rights of personhood and none of the responsibilities, is deregulated, effectively bestowing on them what amounts to a license to steal, and those bestowing that license are “in a state of shocked disbelief” that the license is actually used?
One more point: Your blog brings out a truth that most on the right-side-of-the-aisle seem unaware of, namely: We’re all connected. Events . . . whether man-made or natural . . . are all connected. Chile has an earthquake and the U.S. West Coast is under a tsunami watch. No matter how self-sufficient we believe ourselves to be (personally or nationally) we all sink or swim together.
Her statement may leave her open to charges of being a screaming, anti-capitalist left-winger, so let's leave that one aside for a bit and consider an earlier incarnation of the USA and what it did in the Vietnam War.
It is estimated that American bombs, napalm and poisonous, fetus-deforming Agent Orange defoliants killed up to FIVE (5) MILLION Indochinese. Nobody in this country seems away of that. And why not? Well, perhaps because they were just "gooks" living in villages with unpronouncable names half-way around the world. Nothing to get upset about.
Similarly Goldman Sachs Bonus Babies are popping the corks of their Dom Perignon champagne while ordinary folks in this country are being thrown out of their homes. But then, according to what seems to have become the new American Credo, Goldman are the "best ", and these other unfortunate, not so clever folks are, well, let's just call them "the rest." A bunch of unfortunate losers for whom the American dream became a nightmare.
What goes around, comes down, America! Wake up, look in the mirror and shape up...while there is still time!
Can we learn from this mistake, or are we going to have to feel this pain all over again?
Thanks again for your incisiveness on credit-default swaps, and the business cancer that is growing in this nation, and in the world. I don't want America to be known as the Greed-Empire, I want us to be known for what we've always been known for: a beacon of liberty, hope, and fairness. We're not some European aristocracy from the 18th Century, we don't have kings, where monied and landed interests dominated the peasantry. Please keep spreading the word so that more Americans understand what is happening on Wall Street. I think this is the only way, through rigorous regulation and jail time, that corporate fraud will be reigned-in in America. But most importantly, thank you for your courage and guts to stand up, in the light of day with facts and figures, and point the finger at a boorish, over-zealous, greed-ridden group of business autocrats in this country, that is doing harm to our country. To suggest that America's reputation in the world is well-deserved will wreak anger, body contortions, and reactionary backflips from the hard right. That's allright, they need to hear the facts about the banking industry and some of their deceitful and fraudulent practices. The greed-mongers (banks and insurance industry) need to be stopped. To shout out, "The Emporer has no clothes," is judged as being unpatriotic, by some, but for others, it is viewed as the sweetness of justice.
This isn't even to mention Seaquist's creative but plausible case regarding the dangerously insulting message it sends the world, &the vulnerability this behavior has exposed us to. We haven't exactly shown the world 9/11 was unjustified during this last decade, -how sickening and disgusting that WE have more or less made the case for them. "You're either with us or with the terrorists." America's actions (or LACK of actions) have made it clear which side we're helping, and it's NOT the side we thought we were on. Look in the mirror America, -the REAL terrorists aren't in the Middle East, they're on Wall Street and seated in a sell-out Congress and White House. So, Obama, Congress, and America let's pose again: "Are you with us, or with the terrorists?"
When will America wake up and realize it has been hijacked by mercenary capitalists? Corporate pirates have control of not only the nation's economy, but also of the ship of state, with most of the members of Congress kowtowing to some segment of Big Business. The Financial Sector is surely the worst of the lot, but look behind the curtain at companies such as chemical giant Monsanto and prepare to vomit if the words freedom and fairness mean anything whatsoever to you.
These thugs would sell out their grandmother and the nation for an extra nickle. Both Franklin and Teddy Roosevelt would have been hanging this debacle on the conservatives' collective head like a putrid carcass. You conservatives promised that all we had to do was trust in the free market, deregulate, and slash taxes and everything would be grand. We did it. It failed. Disastrously. Around the freaking world. Thanks a lot. Now go away and die!
Oh, sorry, maybe not - no such regulations at all.
And, given all the punishments meted out to the banksters they should really be afraid...
Oh, sorry, when they got in trouble we just kept giving them more money....
Well, I guess, from the past behavior of Team Obama and the Democrats, they probably aren't too afraid.
These investments have gone international in nature following these massive worldwide electronic markets. The whole system is running on fiat money backed by almost nothing. This massive leveraged trading can not be controlled by one government. which makes it even harder to control these powerful interests.
We should not blame just the US banks there are many foreign banks and major governments playing the game. Unless world leaders can agree on something it will implode.
Their own greed will finally kill the mega banks and traders. Carla is right doom is knocking at our door. Buy hard assets the big storm has yet to arrive.