Trump ate Ducey's soul; Wall Street Ate America, aka Vampire Capitalism

After spending a year pushing the citizen initiative Outlaw Dirty Money (unsuccessful largely due to the pandemic), it now occurs to me that even that project didn't aim close enough to the roots of the problems inherent in America's economic and political dysfunction.

In Evil Geniuses (p. 155), author Kurt Andersen quotes Harvard political scientist Gautum Makunda in a piece Makunda wrote for the Harvard Business Review,

Real power comes not from forcing people to do what you want, but from changing the way people think, so that they want to do what you want... The ability of a powerful group to reward those who agree with it and punish those who don't distorts the marketplace of ideas... The result can be an entire society twisted to serve the interests of its most powerful group, further increasing the group's power in a vicious cycle... In the United States... it's... the financial sector--particularly Wall Street--that has disproportionate power... The financial system is the economy's circulatory system. The large banks that have driven finance's incredible growth are the heart of the financial system... The American economy is suffering from an enlarged heart.   

Also from Evil Geniuses (p 166, 167)

"After a long dry spell," the first line of a breathless New York Times business story announced in 1980, "venture capital is booming again." The reporter felt obligated to explain what venture capitalists were, the way articles back then had to explain what Silicone Valley was. The last six months has been the hottest we've ever seen," a VC in San Francisco told the reporter. All at once, the three hot species of swinging financial firms--revitalized VCs, legitimized hedge funds, overleveraged takeover artists rationalized as private equity investors--were flooded with investment capital from big commercial banks, investment banks, insurance companies, pension funds, and university and foundation endowments. At the same moment that alternative rock became a genre, so did these  alternative investments and alternative investment managers. Meanwhile, money from merely well-to-do and solvent individuals was gushing into conventional mass-market mutual funds, turning them into far, far more powerful economic institutions than they'd ever been before. 

The story of leveraged buyouts (and in particular, that of RJR Nabisco in the 1980s) was the subject of the book and movie, Barbarians at the Gate. The book authors reflected in 2008 on the Wall Street Madness.

NEW YORK (MarketWatch) -- "Barbarians at the Gate," the absorbing tale of the takeover of RJR Nabisco, was a New York Times No. 1 bestseller. It also spawned a well-received movie on HBO. But before they could envision creating a pop-culture icon, co-authors Bryan Burrough and John Helyar had a modest goal.

"Our whole goal was writing a book!" Burrough said.

I'm not the only person who thinks "Barbarians at the Gate" is the best business book ever. [As of 12 years ago, I suppose. But I'm thinking that Kurt Andersen's Evil Geniuses now more masterfully distills the essence of the economic and political problems in the US] But penning a classic that defined the go-go 1980s on Wall Street was the furthest thing from their minds. "We were too stupid and naïve to know what we were doing," Burrough told me when I sat down with the authors at Dow Jones headquarters.

Helyar smiled when he recalled that he and Burrough ultimately created a "part-comic, part-dramatic operetta" that reflected "the human comedy" of Wall Street at the time.

Wall Street is still governed by fear and, especially, greed today in the wake of the collapse of the securities, real estate and automotive industries. "I'll give you my 'Wall Street 101' lecture," Helyar said. "Then, the M&A artists were over-the-top in some cases but were still tethered to real corporate America."

Fast-forward to today: "Wall Street became more of a blue smoke-and mirrors" environment, Helyar said.

BARBARIANS_AT_THE_GATE from Javier Gonzalez on Vimeo.