Wall Street's Wilderness

The SEC has no intention of winning the case against Goldman Sachs. It only wants to prove that is has insufficient tools by which to manage Wall Street. The key is to get Goldman Sachs to take the bait and fight the case. How to keep Wall Street on the hook for this fight is going to take some canny fly-fishing on the part of the SEC. If Goldman Sachs were a smart cutthroat trout, it would not take the bait and would simply buy off the fishermen, forcing the SEC to play catch and release. Fighting the SEC and then wriggling off the hook will only lead to greater measures of control in the future. Let’s hope Goldman fights all the way.
The Masters of the Universe, a term used by Tom Wolfe in Bonfire of the Vanities to describe the self-image of high rolling Wall Street investment bankers, is the modern manifestation of the rugged individual taming the American wilderness in the 18th and 19th centuries. Instead of the forest and the Indians, the modern Natty Bumppo has a world economy to conquer. He fashions tools such as derivatives and credit default swaps instead of animal snares and saw mills. Since the physical wilderness is no longer a viable medium for heroic exploit, the emerging and increasingly complex global economic wilderness is the only wilderness left where individuals with the capacity to cut paths to riches are able to hack their way to glory and success. The physical wilderness, meanwhile, has been mostly set aside for worship and recreation, except where oil and gas may exist.
There is something in the American psyche that loves the single combat warrior, an ancestor to the master of the universe concept and also identified in another Tom Wolfe book called The Right Stuff. We canonized that warrior in our stories and then movies about Davey Crockett, Daniel Boone, the Lone Ranger, and a host of John Wayne or Clint Eastwood characters. Gradually they were urbanized and began seeking justice on the streets instead of on the prairie or in the woods. But they were always associated with justice for the little guy against the monstrous forces of unbridled or corrupt power. By the late 20th Century, we even saw women in the role with the production of Erin Brockovich and Norma Rae.
Today, the combat warriors of Wall Street are no longer single or heroic. They work for too-big-to-fail banks; they are faceless like the Lone Ranger, but they serve themselves and their employer and not the little guy or justice. Their only defense for their greed is a rationalization called “trickle down” economics.
The sea was once a wilderness as well as the forest and the prairie. Herman Melville captured its wonder and seeming limitlessness in his epic novel Moby Dick. At one point in the novel an African-American character named Fleece, the Pequod’s 90 year old cook, is coaxed by Stubb, the playful, teasing, and cruel second mate, into giving a sermon to the sharks that are tearing into Stubb’s whale tied along side of the ship. The sermon, in essence, is as follows:
“Your woraciousness, fellow-critters, I don’t blame ye so much for; dat is natur, and can’t be helped; but to gobern dat natur, dat is the pint. You is sharks, sartin; but if you gobern de shark in you, why den you be angel; for all angel is not’ing more dan de shark well goberned…Don’t be tearin’ de blubber out your neighbor’s mout, I say…I know some o’you has berry brig mout, brigger dan oders; but den de brig mout is not to swaller wid, but to bite off de blubber for de small fry ob sharks, dat can’t get into de scrouge to help demselves.
Stubb then calls Fleece’s sermon Christianity, but Fleece loses patience with the sharks and condemns them for their uncontrollable greed which will lead to their deaths by gluttony. The sermon also foreshadows Ahab’s uncontrollable rage against the great white whale.
While Wall Street likes to see itself as a collection of hunters and gatherers in an economic wilderness or on an open sea of opportunity, unfettered by rules and laws, it has a higher duty to deliberately assure that the small fry get their needs met and not simply assume that some crumbs fall off their table. They also need to make sure they are not pursuing phantom whales as they harvest the bounty of the new economic wilderness and that their weapons are not financial boomerangs which end up circling back, attacking their clients and eventually themselves.
Given human nature, we know beyond any doubt that self-government and an appeal to higher duty seldom works. Something larger than ourselves needs to be in place to provide the rules by which we play safely. The best thing we have come up with so far is representative government. Too often, however, we end up electing or appointing the same sharks that have wreaked havoc with our economic well being.
We don’t need big government or small government but rather good government run by good people. The kinds of people we do not want in government are voracious sharks or especially sleek barracudas who pretend to care for the little guys and then feed on them all the way to the bank.