Most people I know are beginning to find the subject of
a bit tiresome. We all know that it's a "vampire squid." Even if we don't believe that, it's too late. The phrase is likely to be enshrined alongside Goldman's name in the next edition of the Merriam-Webster Dictionary. Yet somehow a more apropos metaphor seems warranted, not for Goldman per se but for what it represents --everything greedy, envied or perhaps vaguely annoying about Wall Street.
I have the answer. Just walk out on your lawn and look down. There they are, crowding out your fescue, causing cracks in your driveway, strangling your tomatoes, muscling your impatiens. Weeds. They are nature's schemers, as slippery as a reverse-mortgage salesman, as resistant to regulation as the grimiest boiler room ever to invade a suburban office park.
Move over, "cycle of scandal." Get lost, "regulatory capture." I've got a much better behavioral model for the Wall Street-government ecosystem. If you don't believe me, just go outside and take a beeline for the bushes. You will find that weeds behave as if they had ethically deprived boards of directors, risk-encouraging bonuses and Tim Geithner as their gardener. Just think about weeds -- I mean really focus on them -- and everything that has ever mystified you about Wall Street becomes magically clear. Inner peace descends, as one begins to realize that it's really no use. Do you know anyone who has ever satisfactorily dealt with their weeds, other than by coating their lawns with asphalt?
It's the same with the Street. Our weed friends teach us that Wall Street's most obnoxious practices will survive no matter how much they are sprayed with toxic publicity, foul-smelling journalism and carcinogenic
Securities and Exchange Commission
consent decrees. But at least we can spray, we can pull, we can plow them under, and hope for the best.
What led me to this particular insight was the latest news in the war against weeds. Just the other day,
The New York Times
about "superweeds" -- weeds that have become resistant to herbicides, especially a Monsanto product called Roundup. According to this scary news, overuse of that highly effective herbicide actually has backfired. Seems that pouring the stuff over commercial crops has resulted in weeds getting mean, hiring lawyers and spinning off an angry mob of Resolve-resistant superweeds, which threaten the food supply. They won't surrender easily. Hell no. They won't even settle. They require plowing and pulling, whereas in the past mere spraying would have done the trick. They add to the cost of production. They -- oh no! -- pose a
Since there's no evidence of weeds and herbicides taking long lunches together, I guess the whole theory of regulatory capture no longer applies. But we do know that these superweeds create a serious issue for our nation. They won't die. They are Too Tough to Fail, as it were.
All this news about superweeds tends to discourage those of us who favor increased regulation of Wall Street. My Wall Street-Weed Model would seem to imply that the advocates of laissez-fair capitalism are correct. It appears to indicate that regulation actually causes weeds to get worse, just as the Alan Greenspans of this world have long argued. However, we now have Monsanto saying
, but may actually be underuse. If that is the case, then advocates of greater regulation have evidence from the great outdoors to substantiate the view that what's needed is more and better herbicides, so as to root out and kill all that nastiness that has afflicted the Wall Street ecosystem.
That much is a bit mixed, but laboratory work shows several important findings from the Wall Street-Weed Model of causality. Among them:
Avoid broad-spectrum bankicides
. Every gardener can attest that the really rough stuff has no place in a garden. We don't want to murder our lovely hydrangeas or assassinate the maple tree that has graced the front lawn for 100 years. We don't want to kill the community banks with regulations aimed at the Goldman Sachses,
Bank of Americas
of this world. Such major, resistant species require a specialized approach, much as you might require if the dandelions encroaching on your sidewalk had Bob Rubin on their side.
Encourage green solutions
. Letting the grass grow long crowds out weeds, killing off the varmints without using an ounce of herbicide. Similarly, short-sellers are a green, ecologically sound, proven method of curbing improper banking practices. Lehman Brothers can certainly attest to the toxicity of a steady dose of
, which surely proved more valuable in exposing balance-sheet rot than the weak fungicide applied by the
. (Shorting may not seem very attractive on days when the market is down 900 points, but trust me, it works.)
Perennials are difficult to eradicate
. Try as we might, pouring on Resolve, vinegar or high-test gasoline, it's almost impossible to rid our landscape of the most vigorous species. So we thought that toxic derivatives were gone after the Bankers Trust-Procter & Gamble scandal http://www.derivativesstrategy.com/magazine/archive/2000/1100fea2.asp of the early 1990s--remember that? remember Bankers Trust? -- but you know what happened after that. Up came the green shoots. What's the next resistant weeds in our future? Another bad hedge fund? Maybe even another bad bank, despite all the spraying we've done? When the next one comes, we'll be serene, it being nature at work and all that.
Of course, one must always keep in mind that one man's threat to the bluegrass is another man's wildflower.
apparently feels that Goldman Sachs, which is viewed as having all the charm of a ragweed patch to much of the world, is really more like a wild blueberry bush, valuable for its fruit and not really bothering anyone. Of course, he owns a heck of a lot of that bush, but I'm sure that doesn't influence him one way or the other.
Gary Weiss has covered Wall Street wrongdoing for nearly two decades. His coverage of stock fraud at BusinessWeek won many awards, and included a cover story, ?The Mob on Wall Street,? that exposed mob infiltration of brokerages. He uncovered the Salomon Brothers bond trading scandal, and wrote extensively on the dangers posed by hedge funds, Internet fraud and out-of-control leverage. He was a contributing editor at Cond?ast Porfolio, writing about the people most intimately involved in the financial crisis, from Timothy Geithner to Bernard Madoff. His book Born to Steal (Warner Books: 2003), described the Mafia's takeover of brokerage houses in the 1990s. Wall Street Versus America (Portfolio: 2006) was a hard-hitting account of investor rip-offs. He blogs at garyweiss.blogspot.com.