If you’re making money on the Wall Street scale — which is nothing like your boring, middle-management in the Fortune 500, Hamptons-and-Mercedes, barely–a–1 percenter type money — then you can buy basically anything. When real-estate investor Robert Rosania put part of his storied champagne collection up for sale in 2008, the auction was predicted to fetch $5 million — couch-cushion change to Rosania, who had not yet reached his 40th birthday, making him a good deal younger than many of the vintages in his cellar. (Known in the wine world as Big Boy, he brandishes a special saber designed for decapitating head-clutchingly expensive bottles of champagne. Bespoke vintage-champagne cutlery: That’s how you know you’re rich.) Not far from Zuccotti Park, where Occupy Wall Street was fragrantly encamped, I noticed a young man wandering into a store to buy a pack of cigarettes on a bright Saturday morning, wearing blue jeans, a T-shirt, and a $237,000 Vacheron-Constantin watch. In a world of $600,000 cars (consult your local Maybach dealer) and $4,300-a-night whores (consult Eliot Spitzer), it’s no big deal to buy a president, which is precisely what Wall Street did in 2008 when, led by investment giant Goldman Sachs, it closed the deal on Barack Obama.
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For a few measly millions, Wall Street not only bought itself a president, but got the start-up firm of B. H. Obama & Co. LLC to throw a cabinet into the deal, too — on remarkably generous terms. President Obama, for a guy prone to delivering prim and smug little homilies denouncing greed, greed, greed — the only of the seven deadly sins that truly offends Democrats (though Mrs. Obama has done some desultory work on gluttony) — is strangely comfortable among the Gordon Gekkos of this world. Shall we have a partial roll call? Beat the drum slowly and call out the names: With unemployment still topping 9 percent, the catastatic world economy teetering on the brink of another, even larger financial catastrophe, and trillion-dollar U.S. deficits as far as the green-shaded eye can see, let’s hear it for Obama’s first National Economic Council director, Lawrence Summers (of hedge-fund giant D. E. Shaw and venture-capital firm Andreessen Horowitz), who has had some nice paydays courtesy of Lehman Bros., JPMorgan Chase, and Citigroup. Let’s hear it for Citigroup’s Michael Froman, deputy assistant to the president and deputy national-security adviser for international economic affairs, for Hartford Financial’s Neal Wolin, deputy Treasury secretary, for JPMorgan’s William Daley, Obama’s chief of staff, and for his predecessor, Rahm Emanuel of Wasserstein Perella. Let’s hear it for Fannie Mae’s Tom Donilon, national-security adviser. (No, seriously: One of the luminous interstellar geniuses who brought Fannie Mae to its current aphotic state of affairs, upside down to the tune of trillions of dollars, is running national security, and the former director of the White House Military Office, Louis Caldera, was on the board of IndyMac when it finally went toes up — sleep tight, America!) And, lest we forget, let’s have three big, sloppy cheers for economic-transition team leaders Robert Rubin (Goldman Sachs, Citigroup) and folksy tax enthusiast/ghoulish billionaire vulture Warren Buffett.
That’s a pretty fantastic lineup, from Wall Street’s point of view, but the real bonus turned out to be Treasury secretary Tim Geithner, who came up through the ranks as part of the bipartisan Robert Rubin–Hank Paulson–Citigroup–Goldman Sachs cabal. Geithner, a government-and-academe man from way back, never really worked on Wall Street, though he once was offered a gig as CEO of Citigroup, which apparently thought he did an outstanding job as chairman of the New York Fed, where one of his main tasks was regulating Citigroup — until it collapsed into the yawning suckhole of its own cavernous ineptitude, at which point Geithner’s main job became shoveling tens of billions of federal dollars into Citigroup, in an ingeniously structured investment that allowed the government to buy a 27 percent share in the bank, for which it paid more than the entire market value of the bank. If you can’t figure out why you’d pay 100-plus percent of a bank’s value for 27 percent of it, then you just don’t understand high finance or high politics.
This is disturbing. All the more so as nothing will be done to address this by anyone currently likely to become President. Thanks for exposing this even for the depressing reality that's in it.
Thank you. I have been waiting to see this article in NR for 3 years. Of course the same story WAS in 'Counterpunch' 3 years ago, when NR was blaring on about how Obama was a (LOL) "Socialist." I wonder how many people the right tricked into voting FOR Obama by using that label.
Obama is trained as an Alinskyite socialist, but his motive is to gain power and money on a vast scale. The changes he and his party engineered -- Obamacare, striking down conscience clauses for doctors, Government Motors, etc. -- all reorient our society towards the strengthening of a leftist oligarchy. The "traditional" socialist language Obama employs is part of the smokescreen. He doesn't really care about the people, nor do his friends. Nor do many on the right.
This is nothing new, of course -- look at the Soviet Union, in which the oligarchy built itself a similar power-and-money palanquin to ride on the backs of the people.
The two are not really that far apart. The essence of socialism is government control of the economy - which means a huge advantage to whoever the govenrment favors. And all socialist regimes have had privilaged classes who enjoyed luxuries not available to the masses.
"Wall Street doesn’t want free markets — it wants friends, favors, and fealty." - K.W.
True, certainly not in the sense many Americans define free markets; and I believe therein exists a great awakening for many Americans.
Wall Street no longer (if it ever did) represent free market capitalism, it represents itself. Wall Street is now an exclusive PAC that represents and protects its own financial and political interests. The juicy part of that fact is that many Leftists believe that Wall Street is a wholly owned subsidiary of the Republican Party. Williamson points out accurately, that Barack Hussein Obama has been purchased by Wall Street. The fact that Wall Street has to suffer through daily, verbal slander by the President must be part of the disclaimer.
Conservatives have traditionally defended Wall Street, as it has signified free market capitalism, I suppose in the end Wall Street may ultimately prove to weaken it.
A great article with great facts and statistics, but I take away one thing - don't trust Wall Street to do the right thing, anymore than you'd trust the government to.
When I hear conservatives and some GOP Presidential candidates extol private businesses as "job creators," I wish they would make it clear that they don't mean Goldman Sachs, or other financiers, or hedge fund managers.
Financiers don't create jobs. They profit by pushing money around, by running a giant gambling casino in which the house take is positive, even as players lose their shirts.
When it became clear that, thanks to Fannie/Freddie and other corrupt players, the housing market had become way over-leveraged and way overpriced, some financiers made a fortune by selling financial stocks short or by shorting those Credit Default Swaps. Then they profited handsomely from the financial crash that destroyed the nest eggs of millions of Americans.
They didn't profit while creating American jobs. They profited by destroying Americans.
The real job creators are the startup companies and small businesses that may one day be giant companies.
The GOP likes to extol those in its rhetoric. But in its actions in Congress, it all too often defends Wall Street financiers, bankers, and hedge fund managers.
You are exactly right. I'm working to get some of those financiers and "speculators" to notice my business and push some money my way so I can hire some more people. "Wall Street" can only make money by investing in what people want, it's government that's shooting craps with the wealth it steals from us.
Many Wall Street firms were bailed out by the Federal Government--they ASKED for it, nobody forced them to take the money, they could have just gone bankrupt if they chose.
They had the sheer gall to list that bailout money as accounts receivable so that they could show a profit on their balance sheets--and vote themselves a bonus for having steered the company to profitability.
That means that if you do get financed with them, you're likely to be financed at least in part with some of that Government bailout money.
So the penny has finally dropped at the NRO. The squid and its ancillary cepholopods has its tentacles wrapped firmly around the jugular of the body politic and the NRO's best boy-- make no mistake. Kudos to you Mr Williamson. I hope your comrades heed the message, though I doubt they have the sea legs to weather the coming storm.
Excellent article. It is important to remind people that among the rich, some have gotten that way by actually creating wealth and value, i.e. Steve Jobs, while others, as you point out got theirs by rigging a system along with their political henchmen. The GOP needs to distinguish between support for true productive free market Capitalism and those just gaming the system. Newt has been criticized by Krauthammer and others for pointing out that Mitt is of this world. Going forward this would be a major issue for a Romney candidacy and should not be brushed under the rug.
Excellent article. It is important to remind people that among the rich, some have gotten that way by actually creating wealth and value, i.e. Steve Jobs, while others, as you point out got theirs by rigging a system along with their political henchmen. The GOP needs to distinguish between support for true productive free market Capitalism and those just gaming the system. Newt has been criticized by Krauthammer and others for pointing out that Mitt is of this world. Going forward this would be a major issue for a Romney candidacy and should not be brushed under the rug.
But, where did Steve Jobs get the money to create and expand his wealth and value? Wasn't it from Wall Street "gamblers" who were "just gaming the system"?
Forgive the double post. Not that familiar with posting on this site. The point I was trying to make, apparently not clear to some, is that there is productive investment which creates real wealth and has a reward commensurate with the risk involved and the value created. On the other hand there is that which is called investment, but is not, as there is no true risk involved because the outcome is known and no new wealth is created. An example of this was a firm, the name of which escapes me that bundled dubious mortgages,sold them to clients and then took a position investing against them. This is the Wall street equivalent of Three Card Monte. Bain it would seem has had a hand in both types of investing. How much of which and when, especially when Romney was there remains to be seen.
OWS would think that Wall Street is the problem even if everyone there were as honest as Abe Lincoln.
Furthermore, OWS doesn't recognize that our very own elected representatives are colluding with Wall Street and that THEY are the ones who should be saying NO to corruption.
OWS also doesn't get that Small Gubmint isn't worth buying, so the way to get money out of the gubmint is to get gubmint out of everything they're not Constitutionally mandated to be in.
Wanna get rid of the ants? Sweep up the sugar, don't make the sugar pile bigger.
Superbly done. Too many among us believed for too long that Wall Street represented free market capitalism. WIlliamson exposes a somewhat different truth.
One way to get rid of government skewing laws in Wall Street's favor or in anyone's favor, with congress offering handouts, is to have the Fair Tax. Get rid of the IRS and the ability for congress or the president to "give" a rebate to taxpayers of part of the Social Security tax. What good does that do anyway? The only thing it does is make it impossible to "take" that tax break back because we are in a deep recession. In fact it does no good because it only increases our dangerous deficit. Taxes should be predictable and not manipulable.
The other comment I would make is that all companies must be put on notice that they will conduct their affairs properly because if they fail, the government will not bail them out. Where is the pain if you can do whatever disreputable things you want and know that you will be bailed out? I wish there were some way to make those who ruined people's portfolios, by manipulating the books, pay instead of the taxpayers.
"freedom" what do you mean by "conduct their affairs properly"? If you mean according to the rules on the books - they were conducting their affairs properly.
What do you mean by the term "disreputable"? Not by the books? Not by the law strictly - or not by the spirit of the law?
It appears to me that a rewrite of the rules and regulations with less wiggle room - and heavy penalties for law breakers are needed.
