THE CONSPIRACY THEORY
Ask any judge, prosecutor, criminal defense attorney or novelist about conspiracies and you are likely to be told conspiracies are the stuff of human existence. But mention to a financial sector mogul or media icon any set of facts implying concerted activity for nefarious purpose and you will be eyed with scorn – ridiculed – categorized as unsophisticated “conspiracy wing-nut.”
C O N S P I R A C Y
By Wayne Jett © December 8, 2009
Elite B-schools are said to hew Wall Street’s line: conspiracies cannot succeed and do not exist in the U. S. financial sector. If Wall Street’s line were true, then its big financial players should have no fear of judicial examination of their actions under terms of federal anti-trust laws.
Wall Street Exempt from Antitrust?
The premise that Congress gave free passes to J. P. Morgan and other investment bankers when “every contract, combination … or conspiracy in restraint of trade” was made a felony is preposterous on its face. Yet when Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Bros., Bear Stearns and other giant prime brokers were sued three times in 2006 by hedge funds alleging an illegal conspiracy in violation of antitrust laws (fixing high fees for securities lending while failing to borrow or deliver shares sold short), what did the defendant prime brokers do? They moved to dismiss the complaints on grounds the financial sector is exempt from the antitrust laws.
Congress exempted labor unions and professional baseball from antitrust laws in express terms, and immunized charitable trusts. Yet, without an express exemption, a federal district judge in Manhattan ruled the prime brokers are exempt from antitrust laws and dismissed all three cases! Who knew?
Investigate the Antitrust Exemption
If conspiracies do not exist or cannot succeed in the financial sector, what is the need for exemption from antitrust laws? Merely asking the question confirms the absurdity of “conspiracies do not exist” as Wall Street’s main line of defense.
Wall Street claims exemption from federal laws prohibiting conspiracy in restraint of trade. Before permitting Wall Street to conspire to restrain trade, Congress should require Wall Street to disclose all its conspiracies and tell why they are beneficial to public interests.
Only specific conspiracies clearly identified as helpful to the public should ever be permitted to restrain trade. Even labor unions are carefully limited by labor laws governing the precise nature of combinations permitted.
Big Media Complicity
How might Wall Street conspire to enormous public detriment without disclosure by media ”watchdogs?” Again, asking the question exposes the absurdity of suggesting that major media are any less captured by Wall Street’s giant capital pools than are federal politicians and regulators.
Reality 2009 includes greater awareness of financial fraud by Wall Street in “fly-over country” traversed weekly by Speaker Pelosi than is apparent in Congress, the SEC or the CFTC. Yet public awareness is no credit to major media, and due almost entirely to availability of alternative new media. Media readily present false imagery when a billion dollar professional athlete is involved. Nowhere is media captivity more obvious or more complete than when mega-billions of untold proportion are wielding influence. The hoax known as man-made global warming or climate change is a glittering example.
Reasons for Suspicion
Though financial mercantilists are extremely effective in enforcing their worldview, an intellectual here or there infrequently strays importantly from the party line. In his widely read 1966 book Tragedy and Hope, history professor Carroll Quigley of the Georgetown University school of foreign service wrote: “The powers of financial capitalism had a far-reaching (plan) … to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole.” Media experts may disagree, but to most Americans this would qualify as a “conspiracy.” Perhaps this means scientific consensus does not yet foreclose further consideration of the issue.
Before checking whether a conspiracy exists to dominate the world, U. S. leaders should examine more mundane items. For example, look at conspiracies to profit by manipulating share prices through use of credit default swaps and the related SEC regulation (the “Madoff exception,” now repealed) which permitted CDS market makers to sell shares short without delivering them in a stated time frame. Look into trading practices called “Short to Buy” found by the SEC in its 2005 audit of hedge fund giant Pequot Capital. Cast an eye towards concerted failure-to-deliver shares sold short of Bear Stearns, Fannie Mae, Freddie Mac, Lehman Bros., AIG and other victims of financial slaughter in 2008. And, lest we forget, consider the possibility that "secret codes" in computer software said to be capable of manipulating markets worldwide "in unfair ways," even capable of front-running every trade in U. S. financial markets, may be evidence of unlawful conspiracy.
Unfortunately, few in Washington, D.C., in New York or in the financial sector show any interest in such investigations. Some rank-and-file in Congress are reaching for financial reform, as indicated by Democrats defecting to pass (with Republicans) “Audit the Fed” provisions out of committee, plus bipartisan rank-and-file support for stopping manipulation of crude oil prices. Do not expect real economic recovery, regardless of extreme fiscal and monetary measures taken to make it appear otherwise. ~