Quote of the Day: “Why Isn’t Wall Street in Jail?”

Here’s a nice supplement to my earlier post from Matt Taibbi’s article, “Why Isn’t Wall Street in Jail?” in this week’s Rolling Stone:

“Here’s how regulation of Wall Street is supposed to work. To begin with, there’s a semigigantic list of public and quasi-public agencies ostensibly keeping their eyes on the economy, a dense alphabet soup of banking, insurance, S&L, securities and commodities regulators like the Federal Reserve, the Federal Deposit Insurance Corp. (FDIC), the Office of the Comptroller of the Currency (OCC) and the Commodity Futures Trading Commission (CFTC), as well as supposedly “self-regulating organizations” like the New York Stock Exchange. All of these outfits, by law, can at least begin the process of catching and investigating financial criminals, though none of them has prosecutorial power.

The major federal agency on the Wall Street beat is the Securities and Exchange Commission. The SEC watches for violations like insider trading, and also deals with so-called “disclosure violations” — i.e., making sure that all the financial information that publicly traded companies are required to make public actually jibes with reality. But the SEC doesn’t have prosecutorial power either, so in practice, when it looks like someone needs to go to jail, they refer the case to the Justice Department. And since the vast majority of crimes in the financial services industry take place in Lower Manhattan, cases referred by the SEC often end up in the U.S. Attorney’s Office for the Southern District of New York. Thus, the two top cops on Wall Street are generally considered to be that U.S. attorney — a job that has been held by thunderous prosecutorial personae like Robert Morgenthau and Rudy Giuliani — and the SEC’s director of enforcement.

The relationship between the SEC and the DOJ is necessarily close, even symbiotic. Since financial crime-fighting requires a high degree of financial expertise — and since the typical drug-and-terrorism-obsessed FBI agent can’t balance his own checkbook, let alone tell a synthetic CDO from a credit default swap — the Justice Department ends up leaning heavily on the SEC’s army of 1,100 number-crunching investigators to make their cases. In theory, it’s a well-oiled, tag-team affair: Billionaire Wall Street Asshole commits fraud, the NYSE catches on and tips off the SEC, the SEC works the case and delivers it to Justice, and Justice perp-walks the Asshole out of Nobu, into a Crown Victoria and off to 36 months of push-ups, license-plate making and Salisbury steak.

That’s the way it’s supposed to work. But a veritable mountain of evidence indicates that when it comes to Wall Street, the justice system not only sucks at punishing financial criminals, it has actually evolved into a highly effective mechanism for protecting financial criminals. This institutional reality has absolutely nothing to do with politics or ideology — it takes place no matter who’s in office or which party’s in power. To understand how the machinery functions, you have to start back at least a decade ago, as case after case of financial malfeasance was pursued too slowly or not at all, fumbled by a government bureaucracy that too often is on a first-name basis with its targets. Indeed, the shocking pattern of nonenforcement with regard to Wall Street is so deeply ingrained in Washington that it raises a profound and difficult question about the very nature of our society: whether we have created a class of people whose misdeeds are no longer perceived as crimes, almost no matter what those misdeeds are. The SEC and the Justice Department have evolved into a bizarre species of social surgeon serving this nonjailable class, expert not at administering punishment and justice, but at finding and removing criminal responsibility from the bodies of the accused.

The systematic lack of regulation has left even the country’s top regulators frustrated. Lynn Turner, a former chief accountant for the SEC, laughs darkly at the idea that the criminal justice system is broken when it comes to Wall Street. ‘I think you’ve got a wrong assumption — that we even have a law-enforcement agency when it comes to Wall Street,’ he says.”

(Illustration by Victor Juhasz)

The Communist Manifesto

Karl Marx and Friedrich Engels published The Communist Manifesto on this date in 1848.

Frye in “Varieties of Literary Utopias” takes note of the similar dark underlying assumptions of revolutionary American and Marxist views:

The terms of this argument naturally changed after the Industrial Revolution, which introduced the conception of revolutionary process into society.  This led to the present division of social attitudes mentioned above, between the Marxist Utopia as distant end and the common American belief in the Utopianizing tendency of the productive process, often taking the form of a belief that Utopian standards of living can be reached in America alone.  This belief, though rudely shaken by every disruptive social event at least since the stock market crash of 1929, still inspires an obstinate and resilient confidence.  The popular American view and the Communist one, superficially different as they are, have in common the assumption that to increase man’s control over his environment is also to control over his destiny. (CW 27, 209)

Glenn Beck’s wild chalkboard fantasies connecting Obama to the rise of a new Caliphate funded by George Soros may have an indirect relation to reality — but only  as a paranoid and inverted projection of the interests he represents.  The increasingly hysterical cohort on the right and the dirty Commies it associates with even modestly left-of-centre politics have much in common: a revolutionary outlook that promotes unrestrained industrialism and ruthless exploitation of the environment, resulting in the illusion of mastery which only enhances degraded social conditions.  We are currently seeing this in the U.S. as the Republican agenda in Congress and at the state level becomes more obvious: massive unemployment accompanied by the rending of the social safety net and cynical efforts to roll back hard won collective bargaining rights. This is yet another way of obscuring the unprecedented theft of public and private wealth through government-abetted Wall Street scams, and then transferring the blame to undermine the unionized middle class whose share of national wealth has been flat since Reagan/Thatcher.  We know about the economic collapse of the old Soviet Union overseen by an insular ruling elite not answerable to the will of the people or the rule of law.  What might be the equivalent here?  Maybe something like the 2008 collapse of the financial markets engineered by the greed and incompetence of a kleptomaniacal ruling class always in need of bailouts and tax cuts.

Perhaps Beck might trace this out on his blackboard.  It’s completely doable.

TGIF: Dark Horses

httpv://www.youtube.com/watch?v=5Euj9f3gdyM

Arcade Fire, “The Suburbs.”

Last Sunday the improbable bohemian musical project from Montreal, Arcade Fire, won the Grammy for album of the year.  They beat out multi-platinum performers Katy Perry, Eminem and Lady Gaga.  Finishing ahead any one of them would have been a feat.

In other good Grammy news involving Canadian artists, Stratford’s Justin Bieber mercifully did not win best new artist.  That went to another outsider, Esperanza Spalding.  (Thanks to Kori Pop for the tip on just how amazing she is.)  You can see Esperanza after the jump.  She plays the upright bass, which she makes croon.

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More Frye on Bruno

Bruno makes appearances throughout Frye’s work, beginning with his students essays in the 1930s.  His most extensive commentary on Bruno is in “Cycle and Apocalypse in Finnegans Wake.”  Here’s a selection from that essay.

As literary masters, the Italians predominate in Joyce over all other non-English influences. Joyce’s great debt to Dante, at every stage of his career, has been fully documented in a book-length study, and he owed much to other Italian writers, including Gabriele D’Annunzio, who cannot be considered here. But Finnegans Wake is dominated by two Italians not previously represented to any extent in English literature. One is Giambattista Vico, whom Joyce did much to make a major influence in our intellectual traditions ever since. The other is Giordano Bruno of Nola, in whom no previous writer in English except Coleridge seems to have been much interested, although he lived in England for a time and dedicated his two best-known books to Sir Philip Sidney.

During the years when Joyce was working on Finnegans Wake, publishing fragments of it from time to time under the heading of Work in Progress, a group of his disciples brought out a volume of essays with the eminently off-putting title of Our Exagmination Round His Factification for Incamination of Work in Progress. The first of these essays, by the disciple whose name is by far the best known today, Samuel Beckett, was on Joyce’s debt to Italian writers, more especially Vico. Despite Beckett’s expertise in Italian—all his major work reflects a masterly command of Dante—the essay is very inconclusive, mainly, I imagine, because the entire structure of Finnegans Wake was not yet visible, and the essays were designed to point to something about to emerge and not to expound on something already there. However, since then every commentary has been largely based on Joyce’s use of Vico’s cyclical conception of history.

Vico thinks of history as the repetition of a cycle that passes through four main phases: a mythical or poetic period, an age of the gods; then an aristocratic period dominated by heroes and heraldic crests; then a demotic period; and finally a ricorso, or return to chaos followed by the beginning of another cycle. Vico traces these four periods through the Classical age to the fall of the Roman Empire, and speaks of a new cycle beginning in the medieval period. In the twentieth century Spengler worked out a similar vision of history, although he uses the metaphor of organisms rather than cycles. Spengler influenced Yeats to some degree, but not Joyce. The first section of Finnegans Wake, covering the first eight chapters, deals with the mythical or poetic period of legend and myths of gods; the second section, in four chapters, with the aristocratic phase; the third, also in four chapters, with the demotic phase; and the final or seventeenth chapter with the ricorso. The book ends in the middle of a sentence which is completed by the opening words of the first page, thus dramatizing the cycle as vividly as words can well do.

In contrast, there seems relatively little concrete documentation for the influence of Bruno of Nola, and one of the most useful commentaries, which has Vico all over the place, does not even list Bruno in the index. Yet Bruno was an early influence, coming to Joyce’s attention before his growing trouble with his eyesight forced him to become increasingly dependent on the help of others for his reading. In his early pamphlet, “The Day of the Rabblement,” he alludes to Bruno as “the Nolan,” clearly with some pleasure in concealing the name of a dangerous heretic under a common Irish one. What the Nolan said, according to Joyce, was that no one can be a lover of the true and good without abhorring the multitude, which suggests that the immature Joyce, looking for security in a world where his genius was not yet recognized, found some reassurance in Bruno’s habitual arrogance of tone. Bruno’s “heresy,” evidently, seemed to Joyce less an attack on or repudiation of Catholic doctrines than the isolating of himself from the church through a justified spiritual pride—the same heresy he ascribes to Stephen in the Portrait. As far as Bruno’s ideas were concerned, Joyce was less interested in the plurality of worlds, which so horrified Bruno’s contemporaries, and concentrates on a principle largely derived by Bruno from Nicholas of Cusa, who was not only orthodox but a cardinal, the principle of polarity. Joyce tells Harriet Shaw Weaver in a letter that Bruno’s philosophy “is a kind of dualism—every power in nature must evolve an opposite in order to realize itself and opposition brings reunion.” Most writers would be more likely to speak of Hegel in such a connection, but that is not the kind of source one looks for in Joyce. In the compulsory period of his education Joyce acquired some knowledge of the Aristotelian philosophical tradition, and learned very early the numbing effect of an allusion to St. Thomas Aquinas. But there is little evidence that the mature Joyce read technical philosophy with any patience or persistence—not even Heraclitus, who could have given him most of what he needed of the philosophy of polarity in a couple of aphorisms.

In a later letter to Harriet Weaver, Joyce says, referring to both Vico and Bruno: “I would not pay overmuch attention to these theories, beyond using them for all they are worth.” That is, cyclical theories of history and philosophies of polarity were not doctrines he wished to expound, the language of Finnegans Wake being clearly useless for expounding anything, but structural principles for the book.

Pluto

This image of the rotation of Pluto is generated from images captured by the Hubble Telescope

Pluto was discovered on this date in 1930.

From Denham’s Northrop Frye Unbuttoned:

I’ve noticed a curious form of e.s.p in me: whenever I dream of writing something in fiction somebody else who really does write get the idea instead.  This has happened to me so often that it was no surprise to me after thinking about a historical novel situated in Trebizond, to find that Rose Macaulay had the same idea.  (In my childhood I dreamed of becoming a great astronomer & discovering a new planet beyond Neptune that I was going to call Pluto.)  (84)

Ohio

httpv://www.youtube.com/watch?v=EZP3aXdnqBA

Demonstrators in the Ohio statehouse today protesting the effort by Republican legislators to curb union negotiating rights.  Apparently, union busting, like never-ending tax cuts for the rich, is now a standardized Republican solution for everything.

Just how much more do conservatives and their corporate constituency require before they have enough?  Is there a figure?