Eventually he busts out, and in his wake Slater blows up and incinerates the entire labyrinth of mine shafts, costing its co-owners, his nemeses James Sutherland and Porfirio Díaz, countless billions.
After barely escaping the mine fires, Slater ends up on a narrow mountain ledge, 500 feet up from the canyon floor. From that vantage point he witnesses what he has wrought:
Suddenly, Slater heard the noise. He looked up at the towering slope looming 8,000 feet above him. What he saw was a mountain in its final throes, a million-throated thing, screaming of darkness and bloody death, bursting into flames, going mad with feral suffering.
Monte de Riqueza, with hellfire in her belly, was making known the presence of all her age-old tunnels. Thousands of apertures, opening up out of nowhere up and down the mountainside, spat great spurts of red-orange flame and long twisting ropes of inky-black smoke.
The firestorm inside, thirsting for oxygen, had ferreted out every crack and fissure for the air to feed the flaming timbers and dust, the coal and oil, gas and shale.
The winds swept through the tunnels with hurricane force. The super-heated fire-breathing cyclones now converged with a flood of flaming oil, both of them crashing through the intricate maze of tunnels, igniting forever the vast seams of coal and shale, exploding infernos fueled by the bottomless pit of methane gas pouring up out of the hell-sump below.
The prisoners were lost in their entirety.
Slater had killed every one of them.
Standing on the eroding ledge, however, he felt no guilt. Instead, he could suddenly see it all, wrenching his awareness wildly, seizing his very soul with a violent shudder of vile delight, as he realized the sheer immensity of what he’d done.
Men died—that was true—but his war was not with them. He knew that, they knew that. Monte de Riqueza was what counted. She, the hateful harlot of illimitable riches, had been his goal all along.
The mountain herself was now transcending the world of smoke and flames. The throat of the fire sucking breath through her tunnels, the din of torrential winds, the dense coils of black smoke rushing out of every throbbing orifice of her groaning body—her roar had now grown elemental. The mountain was no longer simply in flames, she was standing up and screaming, finally revealing herself for who she was: the back-arching whore of avaricious wealth, balanced in agony on the hard, sharp spasms of her last hell-heat. And when Slater looked up and saw the great ball of fire, floating slowly over the mountain’s top, blown up from the depths through the abysmal maw of the vertical main shaft itself, rising gracefully, angelically, with incandescent brilliance toward the wispy clouds, now tethered to the snow-capped summit, he thought with shocking clarity that maybe, just maybe, this was the moment he’d been born for.
Which is a long way of saying that I’ve always believed that malignant greed—the lust for financial power—warrants its reputation as second-worst of the Seven Deadly Sins, topped only by pride, which is the seed sin, the motivating force behind all other evils. Malignant greed alone leads humanity into the worst forms of radical evil—infernal enterprises such as slave-labor mines and the retailing of nuclear weapons technology. None of the other Seven Deadly Sins is capable of forcing otherwise sane people to commit acts of such unspeakable horror.
Why, you may ask, is malignant greed so uniquely disastrous? Because the other deadly sins are finite and ephemeral in their wickedness. Rage, for example, may cause you to kill a person, but the rage ends with your victim’s death. Lust may drive you to seduce your neighbor’s wife, but it ends with her possession. Greed, on the other hand, knows no satiety. The rapacity of men like Díaz and Sutherland can never be extinguished. Furthermore, money lust can very well lead you to commit every other sin in the book, and even then, it will never be satisfied. There will always be something else to steal and someone else to rip off.
As we shall see, in the New Testament greed is ultimately apocalyptic, annihilating the entire human race—in fact, all life on earth.
2
Time was that society condemned avarice. Asking for excessive interest on a loan damned the usurer to hellfire everlasting. Christ Himself could not have been more adamant about the evils of financial predation. The Lord’s Prayer’s literal translation says nothing about “trespasses.” In the original Greek, as well as in Hebrew and Aramaic, the word is “debts”—monetary debts. The supplicant is strongly advised to forgive his or her debtors—all debtors. Near the Lord’s Prayer’s close, Christ says that God will treat us the way we treat those who owe us money. If you’re hard on them, God will be hard on you. Christ exemplifies his hatred of greed when he flogs the money changers out of the temple. He believes they are committing the sin of avarice because they are charging people fees for the privilege of purchasing a special kind of currency—church-blessed money. In other words, the priests were making money off money, and Christ drives them out of their house of worship.
Paul famously tells us: “The love of money is the root of all evil,” and the serpent tells us why in the Garden of Eden. He convinces Eve to bite the apple, telling her that if she and Adam “eat the fruit of the tree thereof, then ye shall be as Gods.” That is the siren song of riches and covetousness: If you have enough of money and material possesssions, you can live as a god on earth and do anything you want. Money lust is the implicit overreaching of God; it is hubris incarnate.
In chapter thirteen of Revelation—which chronologically ought to be the book’s first chapter—greed provokes Armageddon, leading us to the End of Days. John of Patmos has an angel explain in that chapter why God will kill and torture in perpetuity over one-third of humankind: the angel announces to the world that God wants humanity to either reject avarice—and stop trafficking financially with the Anti-Christ—or God will sentence us eternally in fire and brimstone. In other words, the angel tells us, we can have Paradise, or money, which will be promptly followed by hellfire everlasting. One-third of humanity says, “We’ll take the money.” And of course, the earth is destroyed, and those of us who are consumed by greed, go straight to hell.
In the New Testament love of money is far and away the deadliest of all the deadly sins. Greed destroys human beings by the billions and, once and for all, rids the earth of humanity’s shadow.
So how and when, to quote Oliver Stone, did greed become “good”?
3
Supreme Court Justice Louis Brandeis wrote: “We can either have democracy in this country or we can have great wealth concentrated in the hands of a few, but we can’t have both.” Most reasonable people would hold that statement to be self-evident. The superwealthy buy politicians the way the rest of us purchase chewing gum. If political contributions continue to be unregulated, financial might will inevitably lead to political power. After all, power begets power, and money begets money. Thus wealth concentrates into fewer and fewer hands, and eventually a handful of über-rich oligarchs will gain control of a country.
Which is now happening in the U.S. To say otherwise is in flagrant opposition to the facts. As I point out in The Evil That Men Do, eight people are now wealthier than one-half the world’s population, and six of them are Americans. The American financial sector—that is, the kinds of people who make money off money and whom Christ flogged out of the temple—now annually sucks up over one-half of non-farm corporate profit in the U.S. Today, the world’s ultra-rich hide one-third of the planet’s annual GDP in offshore black-money accounts and pay no taxes on it. One hundred plutocrats spend more money financing America’s dominant political party than all other contributors put together. In Russia, 111 people possess a full 19 percent of the country’s wealth.
To say that oligarchy is compatible with democracy also is diametrically opposed to the facts. The tsunami of political donations triggered by Citizens United bears witness to the willingness of the rich to spend billions in their efforts to deregulate their avarice. Plutocrats spend fortunes each year trying to circumvent the law, most notably tax laws. In a
very real sense, the rich hate the rule of law … at least any laws that restrict their financial predations.
G. K. Chesterton once said of the rich: “The poor have sometimes objected to being governed badly. The rich have always objected to being governed at all.”
It was not always thus. When I was a boy, the U.S. had anti-usury laws, and Wall Street was a modestly profitable industry, not the financial behemoth it has become. When did Wall Street commence sucking up 50 percent of all non-farm corporate profits in the U.S.? When did this Revolution of the Rich first begin? When did the Great Oligarchy Movement begin?
4
During the early ’80s under Ronald Reagan, America witnessed the deregulation of Wall Street, which, through tax incentives and the weakening of anti-trust restrictions, gave the big banks financial incentives to conduct corporate mergers. Such mergers have always been costly and risky. To finance a merger, the participating companies have to borrow tremendous sums, and to cover those debts, they must fire employees en masse. After the merger is completed, both companies are mired in debt and lack the personnel to grow their companies properly. The restructuring also leads to disorganization and confusion. The surviving employees tend to be frightened and overworked.
Almost all merger studies conclude that in the long run, about 80 percent of mergers are manifest failures that impoverish both workers and stockholders. A Harvard Business Review analysis concluded that the failure rate could be as high as 90 percent.
I live in New York City and have known lots of Wall Street executives, including mergers and acquisitions (M&A) lawyers and investment bankers. Most of them are quite blunt about the havoc mergers wreak.
Over the years, I’ve asked a number of them why they do it, given the mergers’ history of destructiveness, and they say quite openly that a handful of CEOs, investment bankers and M&A lawyers—people such as themselves—profit excessively off the mergers even though they do so at the expense of stockholders, employees and the nation. In short, they ply their trade because a relatively small number of people make money at the expense of everyone else involved.
I told one of these people that I’d heard that plastic-encased trophies are given to the people who conduct these mergers.
“You mean tombstones,” the man said.
“Why do you call them tombstones?” I asked him.
“They’re given to us for the companies we just killed,” he said, smiling wryly.
I asked one M&A specialist if a corporation can expect to gain any advantage at all from a merger. He said mergers usually lead to the weakening or obliteration of one of the merged companies, so they are a way of liquidating competition. At the time he made that statement, such takeovers were a violation of the anti-trust statutes.
Over my forty-nine-year career in the book publishing industry, I have seen firsthand how mergers have merged countless publishing companies out of existence. When I started out, there were scores upon scores of book publishing houses. Now five houses are responsible for over 80 percent of book sales, and they are all owned by non-American companies. The paperback industry, which a half century ago produced 80 to 90 percent of book industry profits, has seen its once-myriad book distributors wiped out by mergers. Consequently, today’s paperback industry barely breaks even.
Over the last thirty-five years mergers have shrunk the number of companies in most major industries—the oil, airline, pharmaceutical, communications and banking sectors just to name a few. Increased monopolization within major industries is precisely how oligarchies are created.
5
Back in the early ’80s, when I was writing Savage Blood and Hangman’s Whip, another Wall Street revolution was in its infancy, and a friend of mine got in on the ground floor. He had doctorates in both math and physiology, and a top investment bank had recruited him to work in New York, developing something called “derivatives.”
He did his best to explain derivatives to me, saying that they were arcane, complicated financial instruments that allowed investors to hedge their bets in much the same way that a bookie lays off bets, thus limiting his risks. The problem was, he said, that his department was “securitizing them.” Derivatives, however, weren’t like regular stocks. Traditional securities were collateralized by the companies that issued the stocks. Derivatives, on the other hand, were pure intrinsic uncollateralized debt.
“Why do people buy them?” I asked.
“Largely because none of our customers understand what they are,” he said. “The dirty little secret on Wall Street is that the bulk of the big stock customers know very little about the securities they purchase. For instance, if you’re a firefighters’ pension-fund manager in some big city and you’re hired to invest the money in the fund, you’re competing against maybe four other guys in that city who are also investing the fund’s money. At the end of the year, the person who comes in number five gets fired—or doesn’t get a big raise and a handsome bonus. So you’re under a lot of pressure to perform.
“In reality, you’re looking at thousands of investment opportunities every year, and you don’t have time to study and understand them. They’re just blips on a computer screen to you. Now you may know that some hotshot company or superstar investment banker, whose name is always on the front page of The Wall Street Journal, is backing one of those offerings. If that’s the case, then you know the guy and the bank are ultra-famous and successful. Also you see the prices on their offering are starting to rise on your computer screen. The offering is taking off, and if you don’t buy in fast, your competition at your firefighters’ fund will, and at the end of the year, you may be out of a job. All you know is you better get on board fast.
“So in the Land of the Blind, being an inherently incomprehensible security is not a bad thing. It can be a virtue, and I create incomprehensible securities for a living. No one understands them, so I’m always being called in to explain my derivatives to potential customers. Our sales people sell them but can’t explain them. I can’t either, but I sound more knowledgeable than the sales people do.”
My friend said derivatives were the Wrath of God, and he predicted that they would spread across the planet like a pandemic, one day bankrupting the global economy. He hoped he’d be retired when that happened. Last time I talked to him, he was retired and was keeping most of his money in cash.
And what happened to the derivative market? True to his prediction, the total value of global derivatives is now over $1.5 quadrillion. Derivatives—which, to repeat, are pure intrinsic uncollateralized debt that almost no one understands—sank Enron at the beginning of the 21st century and would have sunk the U.S. banking industry in 2008 without a U.S. government bailout.
These bank crashes come with disturbing regularity. It’s worth remembering that in the late 1980s, merger mania almost destroyed the U.S. banking system, which had lent most of the money for those failed takeovers. The savings and loan banks were largely wiped out. President George H. W. Bush and Alan Greenspan bailed out the commercial banks through the issuance of thirty-year bonds at 8 and 9 percent interest. The bonds were so profitable that the commercial banks became healthy enough to absorb all the losses they sustained when they financed bad mergers.
By the end of the 1980s, mergers had more than tripled corporate debt in the U.S. and had transmogrified Wall Street from an industry that financed corporate expansion to one that created and securitized debt—as well as proliferated mergers that also proliferated debt. Instead of a financial industry, the big Wall Street banks had become a debt-finance industry. Today the world’s financial sector has fabricated and sold, to repeat, over $1.5 quadrillion worth of global derivative debt.
6
When did leading plutocrats and oligarchs in the U.S. become so successful at buying up our politicians? Obviously the wealthy have attempted to suborn politicians’ votes as long as there have been politics. In her book Dark Money, however, Jane Mayer described a more disturbing trend. She described a group of
approximately 200 radically rich donors who have organized to such a degree that their combined GOP contributions are greater than all other contributions put together.
Furthermore, the political plutocrats are nothing like the great American tycoons at the beginning of the 20th century—Henry Ford, Andrew Carnegie, John D. Rockefeller and Edward Harriman. Those men, while capable of great ruthlessness, were pioneers in industrializing America and helped to turn the U.S. into a global superpower. Jane Mayer pointed out that today’s Radical Rich were typically men of a different stripe. Many of them made their fortunes off Wall Street hedge funds—which bankrolled the mass production and securitization of debt—and lobbied hard to shrink the anti-trust division and the power SEC; they were casino tycoons who promoted gambling, hardly a socially redemptive avocation; they were petrochemical magnates who fought tooth-and-claw to abolish the EPA and saw the wholesale polluting of America and the acceleration of global warming regardless of the consequences as their God-given right; or they were munitions manufacturers, beer barons or defense contractors.
But most of them were derivatives moguls.
And many of these billionaire donors were extremists. Some of them had parents and grandparents who had trafficked with Adolf Hitler and Josef Stalin. Some had believed Eisenhower to be a paid agent of the Soviet Union. A few of them dismissed Ronald Reagan as a pseudoconservative and a sellout for not fighting hard enough to abolish Social Security and Medicare.
Mayer described in detail the New Oligarchs and the hold they eventually acquired on the GOP. Forbes called them “the invisible rich,” and at first they worked in secrecy and in the dark—so covertly that when Barack Obama first took office he was only vaguely aware of their existence. The invisible rich seemed to come out of nowhere, and Obama’s people complained that these groups blocked and attacked them so fast and so furiously they did not know what had hit them.
The Evil That Men Do Page 40