A British prime minister, Edward Heath, observed 25 years ago that a businessman, a truly horrible savage called “Tiny” Rowland, represented “the unpleasant and unacceptable face of capitalism.” The description was fitting because Rowland was a perambulating piece of filth who had indulged in bribery, tax-dodging, and the general range of ingenious whizz-kid schemes designed to make viciously unscrupulous people rich and keep them that way. He had never been to business school but has been a model for those Masters of Business Administration who scrabble and grab for money without regard for moral principles – or the law of their land, if they think they can break it without being found out. There seem to be a lot of them like that, as we are now discovering.
Capitalism is marvelous, or so it is claimed by those who prosper mightily by using other people’s money to gamble on financial markets to make immense profits. But capitalism hasn’t been working very well of late, and countless thousands of ordinary people are poorer or even ruined and cheated of their promised pensions because they were sucked into disaster by sleek, fast-talking con-men. In the film ‘Trading Places’ one of the leading characters, the wonderful Eddie Murphy, tells a pair of self-satisfied, pompous, scheming, rich, amoral money-manipulators that “You’re nothing but a couple of bookies,” and rarely have more appropriate words been uttered to describe the antics of those whom Tom Wolfe so ironically dubbed ‘Masters of the Universe.’ You and I would call them squalid spivs – those who, according to the dictionary, “make a living by underhand dealings or swindling.”
The recent collapse of Lehman Brothers caused concern among the rich and utter despair to countless thousands of ordinary people. It appeared amazing that such an enormous bank could suddenly go under, although to insiders it was no surprise because the avaricious guttersnipes running it had been out of control for years. But not so out of control that just before it went bust the greedheads awarded themselves a nice little present. It was reported that “staff [in New York] . . . of the bankrupt bank will share a bonus pool set aside for them that is worth $2.5 billion.” So capitalism worked pretty well for those who helped create the crisis – but it was catastrophic for those who had invested in their putrid schemes and for employees who lost their jobs with little prospect of re-employment.
The head of Lehman, one Richard S Fuld, received a package of over $40 million in 2007. He bought one of his houses, the one on=2 0the ocean-front in Florida, for $13 million four years ago. No mortgage, as such, of course, unlike the poor suckers suffering from the financial disaster caused by Fuld and people like him. And another of the former biggies of Lehman, the unlovely Joe Gregory, wants to sell his house in New York. Anyone got 32 million dollars to spare?
The repulsive farce of Lehman Brothers is only one example of how rapacious high mucky-mucks rip off ordinary citizens – the defenseless majority. As the New York Times put it : “Bankers’ excessive risk-taking is a significant cause of this financial crisis . . . Mortgage lenders blithely lent enormous sums to those who could not afford to pay them back, dicing the loans and selling them off to the next financial institution along the chain.” A bunch of bookies, indeed. Crooked bookies, in fact.
And it was the bookies, the slick spivs and charlatans with their yachts and helicopters and contempt for the people who made them wealthy, who invented the license to print money that they called Credit Default Swaps. This grubby little wheeze was supposed to guarantee the debts of companies. Contracts whizzed round the world and thousands of rich people made enormous sums. But when the mortgage market went belly-up so did all these gilded ‘investment banks’ which were shown to be tawdry casinos, only not so well run. And this is where capitalism met the crunch of greed, because although the great American belief is that the state should not interfere in money-making enterprises by supporting failure or imposing such awkward things as rules and regulations, there was a sudden change of heart when it came to the insurance giant AIG which was about to collapse.
AIG had to be bailed out wi th vast sums of taxpayers’ money because (so the economists say) if it had been allowed to crash there might have been appalling knock-on effects, not only in America but globally. But one wonders if it was coincidence, as noted by the Pulitzer prize-winning journalist, David Cay Johnston, that the CEO of Goldman Sachs, Lloyd Blankfein, was present when government officials made the decision to save the day for AIG’s executives. Johnston also pointed out that Goldman Sachs “has about $20 billion, half of its shareholder equity, at risk on AIG,” and, of equal relevance, that “Treasury Secretary Paulson is the immediate former CEO of Goldman.” He then asked why Lehman Brothers, Goldman Sachs’ competitor, had been allowed to collapse without a finger of assistance being raised. Good points. Awkward question. No answers. And then there is the matter of the committed Christian Scientist Paulson having stock in Goldman worth about $75 million at the time of the bailout.
Something stinks, here. And, like a fish, the stink starts at the head, the first part to go rotten.
As a result of gross incompetence and greed, Washington and Wall Street, that incestuous alliance of revolving-door, you-scratch-my-back-I’ll-scratch-yours chumminess, have capitulated to what they would call socialism, and national control was assumed of the shambles that is the world’s largest and worst-run insurance company. It could have been a perfectly respectable and solvent organization, making decent profits through a centuries-old system of offering insurance against disaster. But the greedheads embraced complicated financial ventures that none of us non-economists can understand.
Unfortunately the financial whiz-kids didn’t understand their complicated ventures, either. The Masters of the Universe, the high-IQ barons of the bottom line, have been exposed as silly little boobies whose grasp of economics has proved as feeble as their rather sad pretensions to style in their vulgar, glitzy, bling-bling lives.
The so-called ‘free market’ has for years lined many pockets and benefited yacht-builders and auction houses selling obscenely-priced baubles and pictures to people with more money than morality, and has proved to be grotesquely flawed. But the Masters of the Universe did very well, because, as London’s Financial Times recorded, the pay and benefits of those running “the seven largest US banks totaled $95 billion over the past three years, even as the banks recorded $500 billion in losses.”
Washington loves big business, which is not surprising when you consider that the glove-puppet president and his manipulator, Dick Cheney, along with hundreds of members of the administration, are beholden to business interests for their wealth and their election or selection for high posts. So we should not be surprised when gross violations of law and morality (“God Bless America” is a truly hypocritical mantra, coming from such disgusting scum) are dealt with by wrist-slaps of touching delicacy. Take Halliburton, Cheney’s old firm, whose subsidiary KBR, “agreed to pay” 8 million dollars for ripping off the taxpayer by overbilling on contracts. This was criminal. If you or I did anything approaching such fraud we would be in the slammer before you could say “Cheney’s a liar.” But not in Big Business whose fat rats are those whom Bush refers to as “my base”, and the “haves and the have-mores.” He displayed crass vulgarity of the most pathetic kind, but we all got the message : if you have money, we’ll protect you ; if you are vulnerable, tough luck. And that is the way corporate and political America wants the entire world to be run. Capitalism is in crisis, courtesy of greedy amoral American bookies and their evil associates around the world. They are the unacceptable face of capitalism. Let them be the ones to be penalized. Why the blazes should anyone else suffer?
BRIAN CLOUGHLEY’s book War, Coups and Terror, about Pakistan’s army, is to=2 0be published on October 16 by Pen & Sword Books (UK)