Not many journalists, even those who write for magazines like Rolling Stone, would defy the profession’s cherished standards of objectivity and neutrality (modern fictions, those) and describe the powerful investment bank Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
But Rolling Stone writer Matt Taibbi did just that in a provocative piece back in July. If Taibbi’s sharp-tongued assertions were not backed up with compelling evidence and a clarity of writing style lacking in most reporting on economic issues, he might be written off as a young hot-head lefty reporter with a penchant for profanity and an axe to grind against the old monied establishment. (Ok, he is young and he does swear a little, but axe-grinding doesn’t seem to be what he’s about).
In the 15 October 2009 issue of Rolling Stone Taibbi breaks down the fundamentals of “naked short-selling,” the counterfeiting scheme that last year brought down Bear Stearns and Lehman Brothers. The piece reads like corporate science fiction; how could this stuff really be true?
- Credit-default swaps and collateralized debt obligations were invented for the primary purpose of synthesizing out of thin air those revenue flows that our dying industrial economy was no longer pumping into the financial bloodstsream.
- Actual paper shares were replaced with electronic ones that don’t have to be physically accounted for, creating loopholes that legalized the counterfeiting of stock and led to all sorts of corruptions, including “empty voting”: borrowing great masses of shares shortly before an important merger or board election, exercising one’s voting rights, then returning the shares when the vote is over.
- Naked short-selling also occurs, unbelievably, in the bond market: Under the eyes of government regulators, Wall Street has counterfeited the debt of the U.S. government, with the amount of failed trades in Treasury bonds — the equivalent of “phantom” stocks — doubling since 2007.
Naked short-selling, in short, is about selling large quantities of stock that companies don’t actually have, flooding the market with “phantom” shares that depress a company’s share price by making the shares less scarce and therefore less valuable.
That Goldman Sachs benefitted from the fall of two of its rivals (perhaps even having a hand in their demise, speculates Taibbi and others) and that the upper echelons of the Treasury Department and the Federal Reserve are a virtual who’s who of Goldman Sachs’s inner circle, are reasons for serious concern, warns Taibbi, “making it less and less likely that the financial markets will ever be policed, since the state is increasingly captive of these interests.”
What is the theological significance of all this? Should Christians and other people of faith do anything more than shake their heads in bewilderment at the sheer audacity of this “naked swindle” brazenly carried out in the light of day?
For one thing, it’s clear that the complexity of the problem intimidates people of faith — all people, really, since these schemes are ridiculously (and deliberately) hard to understand. And because of this, we don’t talk about them. We lament the excesses of Wall Street and all that, but we don’t know how to frame these issues theologically, biblically, pastorally, homiletically.
The main reason for this, I think, is that Christians, almost universally, assume that matters like economics and politics belong in the “public” realm, while the “private” sphere is the proper locus for faith, devotion, discipleship. Biblical passages like Matthew 22:15-22 (“render unto Caesar”) are interpreted to legitimize this dualism.
But most Christians also sense that this tidy separation is false and problematic, since what we do with our money — how we earn it, spend it, regard it — is a clear concern of the gospel.
At minimum, Christians ought to resist the abstractions of the global economy and participate in local, alternative social practices committed to economic (and ecological) sustainability. We may need to remind ourselves that our security does not lie in securities or fat stock portfolios (which now may contain only “phantom” shares anyway) but in dependence on God and one another.
Such radical dependence will only seem foolish in a culture that preaches the gospel of economic self-interest and thinks that planning for the future is primarily about savings accounts. But sacks of gold, now or later, are not what Christians are to be about, and the scandals of Wall Street — hard as they are to believe and understand — can be a powerful reminder of that enduring truth.