Public Liturgies: Wall Street Theology

March 12, 2012

WALL STREET THEOLOGY

     Some readers are asking about God in relation to these blogs.  One way to begin that conversation is by listening to a Wall Street version of God talk.  In 2009, in the teeth of the Great Recession, the CEO of Goldman Sachs announced “I’m doing God’s work” on the caption page of a report to shareholders. Lloyd Blankfein said he helps companies raise capital which creates wealth “that allows people to have jobs that create more growth and more wealth.”  

     The inner mechanisms of this theology are illuminated by the February 29^th ruling by Chancellor Leo E. Strine, J. of Delaware’s Court of Chancery. A brief summary of Chancellor Strine’s 33 page ruling goes like   this:

In Scene One the big energy company, Kinder Morgan, wants to buy the giant oil production and pipeline company El Paso for $21.1 billion.  Behind the scenery Goldman Sachs, hired as an advisor on the deal, turns out to own a $4 billion dollar stake in Kinder. Working on both sides of the street, Goldman also takes an undisclosed $20 million fee from El Paso to advise them at what price it should sell itself to Kinder Morgan.

Scene Two: Douglas Foshe, CEO of this big energy company, El Paso, doesn’t tell his own board that after the merger he hopes to buy the production part [read oil production] of El Paso and he works behind the scenery to persuade Kinder Morgan to offer it to him at a low price.

Scene Three: “In other words,” says Chancellor Strine in his court order, “when El Paso’s CEO was supposed to be getting the maximum price from Kinder Morgan, he actually had an interest in not doing that.”

Scene Four: The Chancellor continues: “This undisclosed conflict of interest compounded the reality “that the Board and management of El Paso relied in part on advice given by a financial advisor, Goldman Sachs & Co., which [also] owned 19% of Kinder Morgan (a $4 billion investment) and controlled two Kinder Morgan board seats.” 

Scene Five: “Although Goldman’s conflict was known,” continues the Chancellor, “When a second investment bank was brought in [Morgan Stanley] to address Goldman’s economic incentive for a deal with, and on terms that favored, Kinder Morgan, Goldman continued to intervene and advise El Paso on strategic alternatives, and with its friends in El Paso management, was able to achieve a remarkable feat: giving the new investment  bank an incentive to favor the Merger by making sure that this bank only got paid if El Paso adopted the strategic option of selling to Kinder Morgan.” [emphasis added]

Scene Six: “In other words,” explains the judge-Chancellor, “the conflict-cleansing bank only got paid if the option Goldman’s financial incentives gave it a reason to prefer was the one chosen. On top of this, the lead Goldman banker advising El Paso did not disclose that he personally owned approximately $340,000 of stock in Kinder Morgan.”

     In a very telling comment by the NY Times business columnist, Andrew Ross Sorokin, he underlines that

“What’s even more surprising about Goldman’s role working for El Paso is that it came just six months after the firm issued a new set of guidelines by its “business standards committee.” The firm had just agreed to a $550 million settlement with the Securities and Exchange Commission over allegations that it knowingly sold its clients financial instruments meant to fail. In the guidelines, the firm pledged that its most important principle is that “our clients’ interests always come first.”  [Sorokin is a major source for this blog, in the Times of March 2^nd]

     In this context the question of theology and Blankfein’s God talk is of course quite frivolous and beside the point, which is the profound ethical violations, including fraud and victimization in the billions of dollars; including the sweetheart relationships between business and government regulatory agencies; including the absence of  relative absence of serious penalties and serious reforms in banking where their destructive impacts has registered at the top of the moral richter scale destroying the lives of millions of people in the U.S. and around the world.

     It goes beyond even that.  Money and materialism have guided leaders in both secular and religious life to tolerate destruction even when it is clearly predicted. We knew it was possible for nuclear power plants to melt down as in Japan and Chernobyl but we’ve built them anyway. We knew it was impossible to abandon manufacturing without destroying the social and economic fabric of whole cities and  regions, but the political will, the moral resistance—some would say the voice of God—was not spoken.

     

     The kind of regulation and needed social policy to protect all the people, lies in a direction condemned daily in the political campaigns. That direction is toward a re-engagement with social management for the common good, sometimes known as socialism.

     Lloyd Blankfein and his class of one-percenters are not phony believers. He may have stumbled badly in this case but his is the deeply-held belief shared by many in his dominant class. It has suffused the acquisitive, greedy human self with ideal outcomes. Their view is that fierce competitiveness in the marketplace, triumph and wealth is the formula of their own righteousness, and therefore it seems God cannot be far away.

     The first question to Wall Street is: are the outcomes ideal? What is fair about the global banking frauds uncovered in recent years but rarely prosecuted? Where is the fairness for millions in the U. S. who have become homeless and unemployed?

     The second question is for the ninety-nine percenters, at least half of them (to judge by polling results)  suffused by the same belief system. They’re Tea Partyers, conservative democrats, active Republicans, and they’re often loyal to the Blanlkfeinian dream that righteousness and wealth are members of the same family.

     Challenging the popular dreams of imagined virtue and its self-serving outcomes is the first step toward the often missing God talk which can really exist only when justice and caring among people—not money—is the subject.