Wall Street Will Be Back For More

Corporations, which control the levers of
power in government and finance, promote and empower the
psychologically maimed. Those who lack the capacity for empathy and who
embrace the goals of the corporation-personal power and wealth-as the
highest good succeed. Those who possess moral autonomy and
individuality do not. And these corporate heads, isolated from the mass
of Americans by insular corporate structures and vast personal
fortunes, are no more attuned to the misery, rage and pain they cause
than were the courtiers and perfumed fops who populated Versailles on
the eve of the French Revolution. They play their games of high finance
as if the rest of us do not exist. And it is a game that will kill us.

These companies exist in a pathological
world where identity and personal worth are determined solely by the
perverted code of the corporation. The corporation decides who has
value and who does not, who advances and who is left behind. It rewards
the most compliant, craven and manipulative, and discards the losers
who can't play the game, those who do not accumulate wealth or status
fast enough, or who fail to fully subsume their individuality into the
corporate collective. It dominates the internal and external lives of
its employees, leaving them without time for family or solitude-without
time for self-reflection-and drives them into a state of perpetual
nervous exhaustion. It breaks them down, especially in their early
years in the firm, a period in which they are humiliated and pressured
to work such long hours that many will sleep under their desks. This
hazing process, one that is common at corporate newspapers where I
worked, including The New York Times, eliminates from the system most
of those with backbone, fortitude and dignity.

No one thinks in groups. And this is the
point. The employees who advance are vacant and supine. They are
skilled drones, often possessed of a peculiar kind of analytical
intelligence and drive, but morally, emotionally and creatively
crippled. Their intellect is narrow and inhibited. They rely on the
corporation, as they once relied on their high-priced elite
universities and their SAT scores, for validation. They demand that
they not be treated as individuals but as members of the great
collective of Goldman Sachs or AIG or Citibank. They talk together.
They exchange information. They make deals. They compromise. They
debate. But they do not think. They do not create. All capacity for
intuition, for unstructured thought, for questions of meaning deemed
impractical or frivolous by the firm, the qualities that always precede
discovery and creation, are banished, as William H. Whyte
observed in his book "The Organization Man." The iron goals of greater
and greater profit, order and corporate conformity dominate their
squalid belief systems. And by the time these corporate automatons are
managing partners or government bureaucrats they cannot distinguish
between right and wrong. They are deaf, dumb and blind to the common
good.

These deeply stunted and maladjusted
individuals, from Treasury Secretary Timothy Geithner to Robert Rubin
to Lawrence Summers to the heads of Goldman Sachs, Morgan Stanley, J.P.
Morgan Chase and Bank of America, hold the fate of the nation in their
hands. They have access to trillions of taxpayer dollars and are
looting the U.S. Treasury to sustain reckless speculation. The
financial and corporate system alone validates them. It defines them.
It must be served. This is why e-mails from the New York Fed
to AIG, telling the bailed-out insurer not to make public the
overpaying of Wall Street firms with taxpayer money, were sent when
Geithner was in charge of the government agency. These criminals sold
the public investments they knew to be trash. They used campaign
contributions and lobbyists to turn elected officials into stooges and
gut oversight and regulation. They took over retirement savings and
pensions and wiped them out. And then they seized some $13 trillion in
taxpayer money so they could lend it to us with interest. It is
circular theft. This is why we will endure another catastrophic
financial collapse. This is why firms like Goldman Sachs are more
dangerous to the nation than al-Qaida.

"The psychology is about winning, and
winning is marked by the level of compensation and bonuses and the
power you have within the firm," Nomi Prins,
the author of "It Takes a Pillage" and a former managing director at
Goldman Sachs, told me by phone from California. "Every investment bank
is like a mini-country. The political maneuvering and the differences
between individuals who run certain areas and move up the ladder of the
company are not necessarily decided by a vote. They move up depending
on how close they are to the person [above them]. If that person moves
up they move up with them. A certain set of loyalties get created. It
is an intense competition all the time. You have trading and doing
deals with clients, but the result is to push people up the ladder and
to make money."

How you make money and how you climb the ladder of the corporate
structure are irrelevant. Success becomes its own morality. Those who
do well in this environment possess the traits often exhibited by
psychopaths-superficial charm, grandiosity and self-importance, a need
for constant stimulation, a penchant for lying, deception and
manipulation, and the incapacity for remorse or guilt. They, like
competitors on a reality television program, lie, cheat and betray to
climb over those around them and advance. These demented individuals
are admired and envied within the firm. They achieve heroic status. The
lower-ranking employees are supposed to emulate them. And this makes
Goldman Sachs and other speculative financial firms upscale lunatic
asylums where the inmates wear Brooks Brothers suits and drink
expensive chardonnay. Our problem is that the lunatics have been let
out of the asylum. They have been empowered to cannibalize the
government on behalf of the corporations that spawned them like mutant
carp.

These corporations don't make anything.
They don't produce anything. They gamble and bet and speculate. And
when they lose vast sums they raid the U.S. Treasury so they can go
back and do it again. Never mind that $50 trillion in global wealth was
erased between September 2007 and March 2009, including $7 trillion in
the U.S. stock market and $6 trillion in the housing market. Never mind
that the total amount of retirement and household wealth trashed was
$7.5 trillion or that we saw $2 trillion in 401(k)s and individual
retirement accounts evaporate. Never mind the $1.9 trillion in
traditional defined-benefit plans and the $2.6 trillion in nonpension
assets that went up in smoke. Never mind the job losses, the
foreclosures and the 35 percent jump in personal and small-business
bankruptcies. There are bundles of new money, taken again from us, to
make deals and hand out outrageous bonuses. And when these trillions
run out they will come back for more until our currency becomes junk.
Not that any of these people have thought this through. They are too
busy focused on the pathetic, little monuments they are building to
themselves and the intricacies of court intrigue.

"There are always internal conversations
about taking credit for certain trades and deals," Prins said of her
time at Goldman Sachs. "It is childish, except there is so much money
at stake and so much power within the firm at stake. Power in the firm
allows you to make money, but it also provides a certain status that
everyone looks up to and covets. There can be a period of a month or
two at the end of the year where closed-door conversations occur
between managers and people who work for them about compensation. In
these conversations they go something like: 'My group did that trade.'
'I did that trade.' 'No, that was my money.' 'No, that was my profit
and loss.' 'That's my client.' 'I know the other group said that it was
their client but actually I had the relationship first.' A lot of these
petty conversations go back and forth. All of it to attain money and
acquire power and influence within the firm."

Those who advance in these institutions
master the art of looking like they are doing more than they are
actually doing. It does not matter who does the most. It matters who
can take credit for doing the most. And that often means poaching
someone else's work. Friendship becomes a meaningless word. So does compassion. So does honesty. So does truth.
By any standard comprehensible within the tradition of Western
civilization these people are illiterate. They cannot recognize the
vital relationship between power and morality. They have forgotten, or
never knew, that moral traditions are the product of civilization.
Existence, for them, boils down to one overriding imperative-me, me,
me.

"The people who get the higher bonuses are
not getting them because they are quietly doing whatever work they are
supposed to do," said Prins, who also ran the international analytics
group at Bear Stearns in London. "They are getting that money because
they are constantly able to promote themselves."

"The environment is very insular," Prins
said. "It is all about what is happening in the firm. Who said what.
Who is doing what. What did they say about you. How does it affect you.
How does it affect your group. How does it affect the people above you
and below you. It destroys individuality. You learn there is a certain
way you are supposed to act to be successful. If you are not doing
that, if you are fighting too hard to do something you believe is
right, but your managers don't want to do, you defer. Or you fight and
it gets marked as a stripe against you. You don't discuss interests
that are counter to the firm's interests or the firm's positions."

"You are not thinking whether it is ethical to dump a bunch of loans
into the street or repackage them and re-rate them better," she said.
"You are only thinking about getting the deal done. You don't think
about how issuing certain securities or structuring certain deals will
impact people [around you]."

"When you are living, competing and
winning in an environment where it is all about the money and the
power, it creates a dividing line between you and the rest of the
world," Prins said. "You do not bother to look over the dividing line.
Your world is on your side of it and the rest of the world is on their
side of it. You are not looking at people being kicked out of their
homes and being foreclosed. You do not see the crying, the anger and
the children in the street because [those in government] decided to
give money to bail out Wall Street firms as opposed to renegotiate
mortgage principals so people can continue to live their lives. You can
be callous about it because it does not impact you. It is not something
you notice. You might read about it. But you don't feel it, watch it or
go through it. You are detached."

Banks are continuing to have hemorrhaging
in consumer portfolios including mortgage loans, auto loans, credit
card loans and other loans. Bankruptcies are endemic. Toxic assets if
properly assessed would mean that many of our largest banks are
insolvent. But the profits from the trading revenues and bonuses have
climbed back to near-record highs. The sick mentality of the game, the
one that created the first worldwide meltdown, dominates the nervous
systems of our elite the way cravings overtake heroin addicts. They
can't think of anything else. They do not know how. No one goes to Wall
Street to further the common good. People go to make money. And money,
like power, is a potent narcotic.

"You don't think you are doing anything
wrong," Prins said. "You are working. You are making money. You are
trying to have your bosses like you and pay you. You run things by
legal [the company's legal department]. You run things by compliance.
You don't believe you are committing a crime. You are just doing what
you are doing."

"We will have another crisis," she
lamented. "I don't know when, but it is brewing. If you don't
fundamentally change the foundation of the banking system you are
piling on capital and time into something that is faulty. This does not
result in decades of stability. They are banking on trading. Nothing
has changed. The rest of the consumer economy is continuing to
deteriorate. These losses go into banks. You gain on trading and lose
on more solid practices. The foundation has not changed. The
regulations are bullshit. The old assets are still crap. The new assets
created off the old assets are still crap. The banks are still levering
them and still doing the same practices they did before. We will have
another liquidity crunch. Banks will again stop trusting their assets
and each other. ... The buying of complex assets will stop, although
this time more quickly. People will remember what happened before. You
will have a repeat of credit constricting between financial
institutions. It is already constricted on the consumer side. The
banking system will use up this federal capital and then go back for
more."