Wall Street Beast Recovers; Scoffs at Reform Plans


Did Wall Street quake when President Obama recently addressed its elites on the one year anniversary of the Lehman Brothers collapse? Hardly. If anything, some on Wall Street were heartened by discrete assurances that reforms would not go deeply into the evolved architecture of capitalism. The speech deserves scrutiny, not just because it maps the administration’s financial agenda but because it exposes the limits of the administration’s comprehension of injustices and ills embedded in the system. Most tellingly, the speech reveals a large gap between rhetoric and reality, thus suggesting that the Obama and Bush administrations have more in common regarding political economy than partisans admit.

After thanking his audience for its warm welcome Obama moved to the financial crisis, emphasizing the “terrific leadership” of his generals Geithner, Romer and Summers in getting the crisis under control. He then admonished Wall Street executives that there will be no return to the “reckless behavior and unchecked excess” that triggered the economic catastrophe, since Wall Street cannot expect that “American taxpayers will be there to break their fall” a second time. Several themes followed, the essence of which is enlightening.

Financial elites were encouraged to develop self-regulation in gratefulness for the retention of their high place in the world. Using tacit means, Obama’s handlers acknowledged through their mouthpiece that the holders of great wealth on Wall Street would have been busted out of their asset ownership (and control of society) had the Bush and Obama administrations not braked the slide toward economic calamity. Moneychangers would be bankrupt because of their unmanageable leverage, their assets relinquished to new owners (including sound Main Street organizations) a few dimes on the dollar. Schemes formed long ago might have been set back, with newer intrigues brought to little — especially with government taking steps to undergird the commerce of businesses unsoiled by Wall Street machinations.

A market based disfranchising of super-elites as a result of their own greedy excesses would have served as an unmatched rescue for grassroots populism. Changes in statutory or constitutional law cannot provide such peaceful and sustainable redress for an economically oppressed public. No constitutionally viable law can be written to isolate the wealth of the Wall Street rich (mostly hardened insiders, elite speculators and system manipulators) from the wealth of those who earn it honorably through meritorious contributions. Yet, the market meltdown that was underway in 2008 would have separated wealth quite meticulously for a market event by devastating highly leveraged entities while doing much less damage to other wealth holders. The justice of the outcome would have been undeniable, thus giving disenfranchised elites no recourse against the common good.

Wall Street’s predators were so massively leveraged when the crisis hit that there would have been little capital left in their fraternities by which to shore up each other and buy assets on the cheap upon the advent of economic recovery. Super-elites’ losses in derivatives would have required them to cough up their real estate holdings around the world, their gold and diamonds in Swiss vaults, and their title to mines and oil fields globally. They would have lost control of foreign countries’ economies as well as corporate boards at home. Even their claims against the U.S. government would have been forfeited — claims held in Treasury bonds and Treasury notes used as collateral in leveraging speculative plays. The vast majority of the world’s Bernie Madoff types would have been shaken out just like Madoff.

When Donald Trump became an independent presidential hopeful in 1999, he proposed a one-time asset tax of 14.2% on the wealth of Americans with ten million or more in capital — no one else touched. Trump’s proposal fell on deaf ears even though the sum was calculated to pay off the national debt ($5.7 trillion in 1999) and shore up the Social Security System. The failure of Trump’s proposal to gain any traction in either political party shows that a market-driven mitigation of economic injustice is more constructive than a remotely plausible electoral action.

In 2008 as well as 1999, the people’s representatives in Congress could not act with prudence and strength because they were blinded by greed, pleasure and ambition, just like the people of Judah in Jeremiah’s day. As in John Bunyon’s depiction of “Mansoul” (in “The Holy War,” 1682) the public’s attachment to gratifications and entertainment saps their will to fight “Diabolus.” A debtor nation lacks the mental toughness to accept a severe economic contraction as the deserved price of dethroning a rising Leviathan.

While Thomas Hobbes used the idea of Leviathan (1651) to heighten the imagery of the sovereign state, the Old and New Testaments use the term “beast” to animate the idea of sovereign powers gone bad. In the Bible’s closing book (John’s Revelation), a satanically inspired hidden power arises to plunder and control the world. It is bigger than any nation-state or single time period. It is amorphous, too — vaguely delineated so as to absorb diverse elements with overt symbiotic relationship only for those enlightened about its mysteries. The beast is anti-Christ for various reasons, not the least of which is its employment of power-grabbing methods that trample the principles of goodness taught by Christ and earlier prophets.

The beast John envisioned has ten horns, seven heads, multiple crowns and various features amalgamated from beast images in earlier biblical epochs. Interestingly, one of the beast’s heads suffers a mortal wound; yet, the head and beast somehow recover. The description is intentionally cryptic and the symbolism sufficiently nebulous to make the imagery salient in a variety of tumultuous contexts across the last twenty centuries. Every unjustly oppressed group deserves the solace that an enduring kingdom of righteousness will someday displace the evolution of beastly systems. Thus, it is disingenuous or uninformed to claim an exclusive ‘fulfillment” for John’s vision as some sects do. Nevertheless, allowing for ad hoc, sequential and cumulative applications, it is intriguing that the beast imaged in John’s vision suffers a mortal wound to one of its heads. Could it be that the vision touches our times, too, perhaps culminating in an approaching series of events?

The Bible claims to tell of the invisible but Almighty God and his various miraculous interventions in the affairs of humankind. As a consequence, the Bible has little utility as a proof-text; it is unable to compete with scientific methods rightly employed. Indeed, just because the Bible seemingly suggests that an Apocalypse awaits does not mean it necessarily does: the idea must be considered on its own merits just as the Bible’s credibility should be scrutinized honorably. Rationality requires that Bible inquiry be approached with a sound hermeneutic, thus compelling a reassessment of popular theological dogmas and speculations. Once the appropriate work is done, there remains a storyline and set of moral principles that intuition, inductive reasoning and history recommend to our best intellectual energies. Arguably, divine providence has left us with symbolism and insights that improve our ability to understand the world’s evolution. Thus, the picture of a rising beast in John’s vision may encourage us to use scientific and investigative tools more vigorously in our search to understand unfolding events.

As President Obama explained in his Wall Street speech, the sudden acceleration in the financial crisis produced meetings “in the dead of night” among government leaders and financial elites. “Several of the world’s largest and oldest financial firms had fallen, either bankrupt, bought, or bailed out.” Because of the incredible leverage Wall Street had over many trillions of dollars of assets and derivative contracts, it suffered a mortal blow — the gravest blow received by any head within the system — London, Paris, Amsterdam and other financial centers notwithstanding.

There was no way to save the gravely stricken beast except by miraculous intervention. Perhaps that intervention came in the form of Hank ‘the hammer’ Paulson’s bailout prescriptions or Ben Bernanke’s reviving medications. Maybe the ‘miracle’ is the astonishing way two politically hostile administrations worked in complimentary fashion to repair the ailing Leviathan, most of the partisan worker bees not understanding the true consequence of their actions. Whatever the case, the world stands in awe of the beast’s resiliency and uncanny ability to metamorphose into transnational entities that persist in their intrigues.

Who can make war with a Leviathan unfettered by national boundaries — an invisible state that lives off the DNA and assets of its hosts? Sci-fi movie makers have tried to imagine such a thing. Maybe they don’t need to imagine any more. Just let the documentary cameras roll.