By Chris Hedges
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.”
Chris Hedges, a former Middle East bureau chief of The New York Times, shared the 2002 Pulitzer Prize for Explanatory Journalism. He has written nine books, including “Empire of Illusion: The End of Literacy and the Triumph of Spectacle” (2009). His column appears on Truthdig every Monday.
AP / Richard Drew