Last night, I read more of Karen Ho’s book, Liquidated- An Ethnography of Wall Street and it should be required reading for every literate person in America. I am not exaggerating. But if you read it late at night, it might just scare the bejeesus out of you so keep your light on when you go to bed.
What scares me the most is how true it rings to my own experiences at work over the past two decades. Ho writes like an academic. This is not a beach read. You will have to reread passages if you’re not familiar with how finance works. Her descriptions of capitalism and securities over the country’s history are not easy to get through. But it’s worth the effort because “vampire squid” does not begin to describe the horror that is Wall Street and what it has done to this country. Somewhere in this book Wall Street is referred to as “parasitical and predatory” and I’d say that’s just about right. But it is precisely Ho’s detached, dry academic style that makes the details so disturbing and makes this book more effective than Occupy Wall Street at focussing our attention on the real culprit of our middle class demise.
Several times while reading this I’ve had to stop and ask myself if all this is true or if I’m just being duped by confirmation bias. But having seen the evidence of what the pressures of Wall Street have done to Big Pharma since the 80’s, Ho’s hypothesis makes too much sense to deny. All the pieces fit neatly into place. And now I realize that I missed my true calling in life. I should have been an anthropologist because I haven’t missed a thing except some of the backstory that only a person of Karen Ho’s socioeconomic privileged background would be able to ferret out.
I’m only half way through the book so I don’t know if Ho has any recommendations but I know what would get Wall Street’s attention, and I think I’ve mentioned this before: sell your 401K. Yep, get out of the market altogether. As long as you have investments in that thing, you and the country will never be free. And to tell you how much Wall Street has a grip on you, that very suggestion probably made you choke on your Starbucks, right? You’ve been told for decades that it’s the height of irresponsibility to spend your retirement account (who says you have to spend it?). You’ve been made to feel like a stupid person eating your seed corn if you take that money out. Or the fact that the taxes you have to pay for early withdrawal are outrageous makes you think twice about it. Believe me, I know how you feel. I have all of my retirement savings tied up in two 401K accounts and the thought of taking it out and paying that criminal excise tax makes my blood boil. You can bet our buddies at the big investment banks were behind that. They want access to your money and they want to make it as painful as possible for you to take it away from them. And it’s not even that they want to play with your hard earned dollars at the casino, although that’s true. It’s that trapping you and your money in the stockmarket means they can fashion this country’s political system any damn way they please. Your agency will be harnessed to *their* political goals. The more you give them, the less you will get back. The whole goal is to atomize the welfare state so that each person is left completely vulnerable and on her own, a single individual plugged into the Wall Street system without any other means of support. If the market goes down, YOU go down with it. So, cash in the 401K if you are unemployed and stop making contributions. Or if you can’t do that, try to get out of stock funds. One or two people won’t make any difference to them but millions? Yeah, that ought to make them blink.
If I and my colleagues hadn’t experienced the effects of Wall Street first hand in the most painful way possible, I would think that Ho’s book was an over the top diatribe against Wall Street. But Ho does something that the left does not expect. She rescues the word “corporation”. Half way through the book, you will start to realize what I have been trying to say for a couple of years now. Corporations that produce things and employ thousands of people are not the enemy here, or at least the people who work for them and the products are not the enemies. Even corporate management didn’t start off as bastards, even if some of them have not been overly friendly to labor. You might say that corporate money has too much influence in politics but as you read the book, the reasons behind that become clear. And if lefties continue to throw themselves against the word “corporation”, they are only going to be wasting their time. It is too imprecise. There are industries that work through corporations and then there are the big investment banks on Wall Street and they haven’t always been the same. Teasing the agents apart at this point in time is going to be tricky but necessary.
Anyway, just read it. Make sure you have your Teddy Bear to clutch in the middle of the night.
One very interesting fact from Ho’s book: Wall Street investment banks recruit heavily from a handful of prestigious Ivies. There are two in particular that the bulk of Wall Street analysts and associates come from: Harvard and Princeton. I’m not surprised about Princeton. A few years ago, when I was trying to get Brooke into a private school that wouldn’t drive us all crazy, I toured several in the Princeton area and was surprised to see all the cable business channels running on multiple tv screens in the student lounges. The kid was waitlisted, probably because we asked for financial aid. But I digress. The investment banks seem to think that Harvard and Princeton nurture their students in a way that make them perfect for Wall Street. They’re smart, driven, ambitious, used to the finer things in life and they are looking for the next Harvard after graduation. A few others get their attention, like MIT and Wharton.
But investment bankers do not like to recruit from Yale. They don’t trust Yale graduates because they think they are too liberal.
So, maybe it shouldn’t be a surprise that when Wall Street knew it was going down in 2007, it recruited a presidential candidate from Harvard and passed on the one from Yale.
Oh, and Ho uses the word “schmooze” to describe the front office guys (almost all of them are guys) who use their relationships and connections to get to the top. Some of them didn’t learn a thing during their investment bank’s finance training classes. Apparently, you don’t have to know anything about finance to climb the corporate ladder to success. You just have to know the right people and be really good at golf.