Walls Street Banks and Mexican drug cartels have much in common. They both enjoy call-girls as well as cocaine and other drugs. The bankers and traffickers in Manhattan, knowingly or not, often share the same escorts and drugs. They share a similar hunger for high-risk greed and power without conscience. In this regard, their business models are almost identical--based on cynical materialism.
Kristin Davis, the blond bombshell Madame in Manhattan, delivered one of the most entertaining interviews in Ferguson's recent documentary, Inside Job.(1) She serviced the fantasies of thousands of high-rolling Wall Street financiers.
The boys at the banks were having a really good time. They were living a lifestyle drenched in booze, blow and pricey hookers--and best of all, they didn't have to pay for any of their own debauchery. The swollen bonus cheque in their pants came care of the U.S. taxpayer.(2)
The Zetas and especially the Sinaloa Cartels are well established in Manhattan and its environs.(3) High-level drug dealers make more than enough money to afford Madam Davis's luxurious fantasies. Gross income from Latin drug cartels adds up to a trillion-dollar level.
Contributing to a large part of Mexico's economy, druglords handle relatively close to the same sums of money as the Wall Street moneylords mismanage and squander. As business partners, American bank cartels launder hundreds of billions of dollars in drug money for the Mexican drug cartels:
Wachovia (now owned by Wells Fargo) and Bank of America, two of the largest banks in the US, admitted that they had not done enough to spot drug money when handling $378.4bn for Mexican currency exchange shops between 2004 and 2007. Drug cartels also used shell companies to open accounts at HSBC Holdings Plc, Europe's biggest bank by assets, according to an investigation by Mexico's finance ministry.(4)
While claiming ignorance in their operations, American moneylords launder drug money as a means to diversify their profit streams, just as druglords do by trafficking sex slaves.(5) Thieves with cash bulging their pants, American moneylords ran from their banks sunk by selling "crappy" loans, like Countrywide's CEO Angelo Mozilo, whose total compensation reached $140M or Wachovia's CEO Kennedy Thompson, who received over $21M. Repeatedly in Ferguson's Inside Job, these and many other CEOs and professors at Ivy League business schools respond, "Uh, I didn't know." If they are unable to understand the economic bubbles that have plagued America's free-wheeling capitalism for the last century, then why are they so well compensated for their flagrant incompetence? Why are they professors in the schools for the privileged? Does this mean that Ivy League schools teach the wealthy how to lie and swindle the middle class for profits? In identical manner, when asked why they do it, druglords respond, "I don't know what you're talking about."
As interviewed in Inside Job, certain Ivy League business school professors and deans, whose arrogance and greed exceed their narcissism, are honored for their thievery. Many such conmen, like Frederic Mishkin at Columbia, write academic reports about the economic benefits of deregulation and unhindered capitalism, in so doing, they profit from their status like high-class whores servicing the moneylords' fantasies, though with much more fraudulent and economic consequences than Madam Davis's salon. Glenn Hubbard teaches at Columbia after helping to bankrupt Lehman Bros. Henry Paulson teaches at John Hopkins after a career of pilfering at Goldman Sachs. A fat-ass felon like Larry Summers, Dean of Harvard Business School, is now Obama's director of the National Economic Council.
Ivy League schools give these and other such goons cushy jobs after demonstrating blatant, willful participation in a financial scheme that made them rich at the expense of tens of millions of middle-class retirement pensions, jobs, and investment-savings accounts, and even after attempting to debunk whistleblowers like Robert Gnaizda, former president of the Greenlining Institute and Raghuram Rajan of the IMF.
At the 2005 Federal Reserve conference in Jackson Hole, Raghuram Rajan presented a paper called "Has Financial Development Made the World Riskier?" Rajan pointed to a number of potential problems with the financial developments of the past thirty years.(5)These tattletales complained years in advance that, without regulations, the economy would derail. While praising deregulation, the corporate lackeys like Larry Summers and Greenspan try to discredit Rajan. Likewise the moneylords took revenge on Eliot Spitzer for his complaints about their reckless management on Wall Street by exposing his visits with call-girls. They ruined Spitzer's career as New York attorney general (and governor) in revenge for investigating how the moneylords overturned regulations and fleeced the middle class and crashed global finance.
The band of men from Ivy League economics departments wielded a lot of power in the 30-year push for deregulation. They served as consultants to the industry and were selected for significant regulatory or White House advisor positions. Ferguson raises questions about their objectivity as scholars, as well as whether their integrity was compromised by conflicts of interest and accepting fees from Wall Street, or to testify before Congress, or as expert witnesses.(6)
To add injury to insult, Obama rewarded bandits like Paulson, Bernanke, and Geithner with cushy jobs in government,(7) even after they enabled moneylords to sell loans, especially subprime mortgages, at high profits. They encouraged the unfettered capitalism of neoliberal policies. The moneylords conspired in a clearly intended business model in which they sold high-interest rate loans and then bought insurance that these same loans would fail. Both the Republican and the Democratic elected leaders reward this culture of fraud, deceitful accounting and sales, and racketeering--the business of making money by selling a solution to a problem that the business itself created--selling more loans to pay for the bad loans. Selling loans is selling money, and in many ways it's similar to selling drugs, especially when the loans are sold intentionally under fraudulent, predatory conditions. For every bad loan they sold, the moneylords bought a "short sale," an insurance that the loans would fail, enabling them to personally profit hugely. This business model reflects more criminality than the old mafia model of extorting business owners to buy fire insurance to avoid arson.
These predators nevertheless continue to enjoy their lives as privileged and influential terrorists conspiring against the nation's security. The only thing more in demand than drugs is money. The ravenous demand for drugs in the U.S. and in Europe has inflamed many large regions in Latin America and sustains war zones and a failed state in Mexico, representing the bloodiest struggle of peasants to improve their lives since the Revolution of 1910, led by Zapata and Villa.
Unlike the Wall Street money cartels employing elite graduates from Ivy League schools, drug cartels employ peasants desperate to survive, but the same cynical materialism and greed propel both types of cartels. The moneylords follow a business model identical to the druglords. They sell "crappy" loans in a predatory manner. They then reinvest some of their profits as powerful influence compromising any government oversight. Both moneylord and druglord sell a solution for which they create a problem--it's racket. When people first enjoy a drug, they might become addicted. Likewise, when people can obtain credit without any foreseeable limits--subprime loans, credit cards--they want to access more.
Neither industry is regulated to protect the nation's economy, much less the consumers. And once the banks fail by their mismanagement, the government props them up with public funds, only to watch the moneylords invest the bailout money in foreign countries. Likewise the US government attempts to "fight the war on drugs." Consider the Merida Initiative, it only provides the Mexican government with more US dollars, helicopters, guns, and other toys, while Mexican officials benefit also from drug trade profits.
It's called la plaza. As a druglord develops his business, he pays public officials more and more money to allow him to expand his business into larger regions without police or army intervention and often with their active support. As a result, the druglords increase enormous profits and develop sales and distribution networks throughout the USA and Europe as part of an efficient international business, creating one of the largest parts of Mexico's GDP.
Likewise, the Wall Street moneylords have lobbyists such as Mark Patterson, Tom Donilon, or Scott Talbott, who "lobbies on behalf of 100 of the top banks, credit card companies, insurance, and securities firms operating in the U.S. Its membership includes many bailed-out banks including Citigroup, JP Morgan Chase, Bank of America, Wells Fargo and PNC."(8)Talbott and other lobbyists, negotiate with American public officials to expand deregulation. The lobbyists and the moneylords pay the public officials, Ivy League business professors, and economists in unlimited campaign contributions or consulting fees--bribes--in exchange for advocating unbridled, predatory financial services, more industry consolidation, and conglomerations worldwide, which only makes the surviving banks even more powerful.
Just like the Mexican druglords, the Wall Street moneylords profit handsomely by gaming the system, and the system enables them, and both Democrats and Republicans profit from them.