FROM SEQUENCE 2013
April 2013

I’m stealin’, stealin’, pretty mama
Don’t you tell on me
I’m stealin’ back to my
Same old used to be
— American folk song first recorded by the Memphis Jug Band, 1928

May you not be misled either by the image or epigraph of this essay, or by your bank, cable company, newscasters and government officials, favorite entertainment products, . . . For years now my three guitars and two pianos have been gathering dust in my apartment. I no longer regularly read a newspaper either, nor do I regularly follow the news. If, however, I happen to see a copy of the New York Times business and sports section left out in a restaurant or at the Y, I will glance at the headlines and perhaps take the pages to read. It might be said that this section, with its stories about business and sports, continues to offer glimpses of contemporary life and human nature in languages that I can understand, that seem not to mislead.

The other week on a Monday, the left-hand side of the first page offered commentary about a wealthy entrepreneur’s attempt to use a management-led buyout to take private the company he served as chief executive. The second paragraph was a quote from a wealthy Wall Street investor: “Management-led buyouts are a giant case of inside trading by management against their own shareholders.” Insider trading is of course an illegal activity—a form of stealin’, we might call it—and the Times and other papers routinely feature stories about this or that wealthy company, financial whiz or monetarily ambitious young employee going on trial for insider trading.

It might be asked: Why read yet another story which simply reworks the tried-and-true plot of any number of previous stories? Is it like some people’s taste for Hollywood movies (or for love songs), which also feature such reworking? That is, the pleasure lies in the familiarity, in being able to readily identify the good guys and the bad ones and in knowing in advance what will happen to them?

The right-hand side of this particular business section had a story, one of several in the paper that day, about the financial crisis in Cyprus, the temporary closing of the banks there and the proposed extraordinary levy on large deposits in the banks. As is well known, and as the Times suggested in a subsequent article, Cyprus’s economic model is built around financial services for foreigners seeking ways to dodge taxes and launder dirty money. And Cyprus is hardly the only economy based on what has come to be called “offshore banking,” for all landlocked nations such as Switzerland, Luxembourg and Andorra have been pioneers in the field.

My apologies to those readers who might still be expecting me to write something about the United States’s more musical blues or about sports—about, say, my increasingly ghoulish fascination with the disappointing performance of one of my favorite teams, the New York Rangers. For the moment at least, that story seems to offer no moral beyond the one offered by many a sports season and in the disclaimers of investment documents: “past performance is no guarantee of future results.” But again, are the business section stories more various? Laws and rules are honored in the breach; insiders take money from outsiders or from the public and its government, or with the cooperation of government officials who are financially rewarded for their cooperativeness. If and when some of the insiders get caught, they pay fines that are a small percentage of their ill-gotten gains, and some of them, typically a lower-level operator, may do a little jail time. A government official may be disgraced. As has been remarked time and again, the penalties for getting caught committing low-dollar, lower-class crimes are much higher than for robbery done on a larger scale in the world of business.

Two days later I happened to pick up another iteration of this section of the Times. The lead story of the business section was about how “the nation’s strongest bank” which “used to be known for carrying special sway with regulators . . . ” What does this mean? That, on account of its strength, it used to get away with a lot of shady dealings? In any case, the story concerned how the bank stood currently accused of several instances of lying to investors and regulators and of misinforming some of its mortgage holders, to their detriment. Another story told how a hedge fund trader had agreed to pay the government more than $600 million “to settle accusations of insider trading,” and how this fine was not affecting the trader’s ability to continue in business or to buy famous art works. A story on the next page was about how another large bank had being faulted for “breakdowns in money laundering controls that threatened to allow tainted money to move through the United States.”

A reader might be excused for concluding (with a sigh?) that all money, and perhaps the art works it acquired as well, was tainted. It should also be noted that there are fashions in news, just as with art, movies, music, clothes, blogposts. A big story breaks and somehow speaks to the zeitgeist, and the next thing you know the media finds many more similar stories and one may have the sense of a sort of epidemic. Bullying, for example, is an age-old (and horrible) practice, but the media has recently discovered that, as the saying goes, bullying has legs, and so we may get the sense that bullying is now extraordinarily widespread (which it probably is) and is now a problem as never before (which is likely not the case). And so, too, with stealing, insider trading, money laundering, tax avoidance, lying and misinformation by business leaders.

Would we say then that what has changed in recent years, in the wake of the global financial crisis, is what the media—or the center-left Establishment media?— reports? Before the impression we were given, rightly or wrongly, was that business was basically an honest if highly competitive and money-obsessed undertaking. There were a few bad apples of course, a few low-lifers, used-car salesmen or shoddy war profiteers, but they were the exception, and certainly had not gone to the elite schools, did not work at the elite firms. Now the impression is that large businesses and business leaders are, like the mafia and its dons, engaged in criminal activities on a large scale. (Note: the news stories referred to above involve four CEOs in particular. One of them went to the Wharton School of Business at the University of Pennsylvania, another to the Harvard Business School; one dropped out of the University of Texas at Austin, and the fourth graduated from Harvard College.)

Some readers may object that these businesses and their leaders are not only engaged in criminal activities, that ill-gotten gains account for less than half, perhaps much less than half, of their profits. This may be the case. But supposing that we were then left with the following alternative conclusion: Committing crimes, violating rules and regulations, engaging in deceit and helping others engage in it forms a part, large or small, of the standard successful business career. In some cases, this part may be relatively small, and in other cases—Cyprus’s bankers, the hedge-fund trader willing to pay a $600 million fine to avoid more dire consequences, HSBC’s laundering of billions for drug cartels and for banks with links to terrorist organizations—the criminal part may be rather larger. But in either case, be the take big or small, it would seem that business involves criminal activities.

I do not read the sports section for the doping stories or for the stories about, say, basketball or soccer referees in league with gambling interests. I have a little more interest in the stories about the business of college football and basketball, which basically involves insiders stealing from outsiders—from large numbers of lower-class youths hoping to become professional athletes and in fact already being professional athletes without getting paid professional wages. But sports is not (not yet?) the central activity of the United States. We may believe that sports stories point to larger ills—or virtues!—of our society, but we only occasionally decide that what is happening in the sports world should be our central concern. A few Americans go to college to play sports and make lots of money for the colleges, their coaches, the media and the athletic-equipment companies, but the only education they get is in exploitation, in the business of college sports. This is certainly a problem, many of us are prepared to say, but we would also say that there are larger problems with the American education system. On the one hand, a lot of students emerge from it heavily indebted but without sufficient skills or credentials to be successful in the current global economy. (Only a few have learned how to steal? This can’t be right.) On the other hand, even more students emerge without much perspective on themselves, the global economy and how they might be (or even just wish to be?) something more than a cog in an economic machine.

“The business of America is business,” President Coolidge is famously, if not quite accurately quoted as having said. In a speech to the Society of American Newspaper Editors in January 1925, three years before the Memphis Jug Band released “Stealin'” and ignoring entirely the business of love, Coolidge said:

After all, the chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing and prospering in the world. I am strongly of the opinion that the great majority of people will always find these the moving impulses of our life.

From this perspective, the news that business—in the United States and elsewhere—is intimately connected with criminality, with violating the laws and regulations of the countries within which the business is done, this is a piece of information of some significance. Are we being led to conclude that we are a nation of thieves? Or is it just that we happen to be led by thieves, that financial power and all that goes along with it adheres to thieves? I find myself reminded that a large part of the wealth of Elizabethan England came from what Sir Francis Drake was able to steal from Spanish ships carrying gold and silver that had been, more or less, stolen from the “new world.” And, of course, the early twenty-first century is hardly the first time we and our media noticed the prevalence of thievery among our business and financial leaders. The nineteenth century’s “robber barons” come quickly to mind.

It is, however, relatively easy to read and write about things that happened long ago, but as regards the stealing going on now, my sense is that the news is simply too difficult to digest, and, as it also poses problems for the business operators themselves, it will not be long before this kind of news will fall out of fashion and out of our memories as well. (Coolidge also noted in his speech that the media are on one side purveyors of information and opinion and on the other side purely business enterprises.)

Stealin’, stealin’. The song has been recorded many times over, to include by Bob Dylan, Jim Kweskin, Janis Joplin, the Grateful Dead. It’s in our blood. There are those who would say we stole a whole continent.
 
Image is a photograph of Will Shade, the leader of the Memphis Jug Band.

 

Links & Quotations

The Times stories quoted above are:

• Obligations and Motivations in the Battle for Dell, by Andrew Ross Sorkin, published in the Times of 25 March 2013.
• Europeans Planted Seeds of Crisis in Cyprus, by Andrew Higgins And Liz Alderman, 26 March 2013 (Times website date).
• JPMorgan Chase Faces Full-Court Press of Federal Investigations, by Jessica Silver-Greenberg And Ben Protess, published in the Times of 27 March 2013.
• Federal Reserve Faults Citigroup Over Money Laundering Controls, by Jessica Silver-Greenberg, published in the Times of 27 March 2013.

The present essay connects to at least three previous ones:

• Here is an American Experience (which begins in health-insurance company fraud)
• Dear Ms. Shednails (about a thieving real-estate company).
• Ethics of our Twenty-First Century. This latter piece includes links to a Guardian column by Glenn Greenwald is “HSBC, too big to jail, is the new poster child for US two-tiered justice system,” December 12, 2012, and to Greenwald’s book With Liberty and Justice for Some: How the Law Is Used to Destroy Equality and Protect the Powerful, now available from Picador in a “Reprint edition.”

I would also call attention to David Harvey’s writing on the recent wave of “accumulation by dispossession.” See his The New Imperialism, Oxford University Press, 2003. E.g., from page 147:

Stock promotions, ponzi schemes, structured asset destruction through inflation, asset-stripping through mergers and acquisitions, and the promotion of levels of debt incumbency that reduce whole populations, even in the advanced capitalist countries, to debt peonage, to say nothing of corporate fraud and dispossession of assets (the raiding of pension funds and their decimation by stock and corporate collapses) by credit and stock manipulations—all of these are central features of what contemporary capitalism is about.  The collapse of Enron dispossessed many of their livelihoods and their pension rights.  But above all we have to look at the speculative raiding carried out by hedge funds and other major institutions of finance capital as the cutting edge of accumulation by dispossession in recent times.

Proudhon’s phrase was “La propriété, c’est le vol !” (Property is theft.)