Back in the 60s and 70s, the Outfit had a beautiful scam going on. If you wanted to raise money to buy a casino in Las Vegas, the financing had to go through the Central States Teamster Pension Fund. And since the mob had Jimmy Hoffa in their pocket, no one got a loan unless the families got to skim a percentage of the take. Since casinos dealt mostly in cash, we just had to install a few moles in the count rooms to ferry the loot back to our friends in Chicago and New York. The biggest problem was that the money weighed so much. Have you ever lugged around a Samsonite with a quarter-million in low-denomination banknotes? Just the thought of it makes my shoulder cramp. Even so, we never had it so good. It made prohibition look like chump change.
Unfortunately, the Feds eventually shut down the operation. A lot of guys got clipped and even more got shipped off to the slammer. Scorsese made a great film about the whole thing.
As much money as we made from Las Vegas, I am blown away by the crooks of today. They established a multi-billion dollar racket that not even Meyer Lansky could have dreamed up.
Now, if you’ll indulge me for the next 12 paragraphs or so, I am going to set up a fairly complex analogy that will illuminate the greatest crime of the 21st Century.
The casinos moved east but not to Atlantic City. They classed up the joints and gave them names like NASDAQ and NYSE. Instead of calling the activity “gambling,” it was now referred to as “investing.” The best part was that the casinos no longer needed to lure the suckers to Nevada to lose their money. In fact, they weren’t even allowed inside the casino. Instead, they entrusted “experts” to do it on the gambling floor.Of course, this is nothing new. We used to have these joints in Chicago called “wire rooms” where gamblers could phone in bets on football games and horse races. You developed a relationship with your bookie just like a savvy investor has one with his broker. But imagine if your bookie demanded a percentage of your paycheck every week to play the horses. You still could choose your bets but you had to gamble no matter what. That’s a 401K. Now imagine if the bookie handled millions of dollars from thousands of people and could bet the money any way he saw fit. Even better, you never had a chance to chew him out on the phone when he lost your dough. That is known as a mutual fund.
Now, I know what you’re thinking. A stock is a unit of ownership in a business entity. That’s so 1974, dude. Today, we’ve got synthetic financial instruments like derivatives, short sales, CDO’s, and God knows what else. There’s even a fund where people can gamble on the box office grosses of movies.
So far, we’ve established two key elements of my analogy:
1. Casino = Financial Market
2. Gambling = Investing
Of course, had these billion-dollar bookies been working The Strip 40 years ago, every wiseguy would have taken a piece of their Ivy League ass. And when these jerks lost other people’s money, they’d end up in the cement foundation of a parking garage. No one made big money in Vegas without an organization to protect him. In my day, a high roller could have chosen among several sponsors from New York: Gambino, Colombo, Lucchese, Bonanno, or Genovese. Sure, these guys are still around but a new set of families controls the stock rackets: the Goldman group, the Morgan Stanley cartel, and a mean crew of greaseballs formerly known as the Bank of Italy.
How do these organizations provide protection? In Vegas, the tools were rather crude. Lead pipes and guns proved messy yet effective. If you fucked with the wrong guy, we’d put you in a hole in the desert. Of course, all that blood was bad for business. So today’s crime families use more subtle means. They employ armies of in-house attorneys that will litigate their enemies into the grave.
However, you’ve still got to handle the Feds. The banksters have the SEC. We dealt with the FBI. More important, politicians could enact harsher laws to disrupt all of our illicit activities. So how did we get away with our thing? Well, back in the old days, we would use something known as a bribe. We gave them to politicians in order to get something we wanted. For instance, they could stop a DA or a police chief from interfering with the skim. The only problem is that bribes are illegal. In fact, Roy Williams (president of the Teamsters after Hoffa got whacked) went to jail because he offered one to Senator Cannon near the end of our Vegas heyday.Fortunately, the banksters developed a legal sort of bribe known as a “campaign contribution.” For instance, Goldman Sachs was the second largest donor to Obama’s 2008 presidential run with a grand payoff of $994,795.
Now, let’s try to figure out the difference between a political contribution and a bribe. With a bribe, the politician can spend the money any way he sees fit, be it a plasma screen TV or a Maserati. On the other hand, a campaign contribution is more limited in scope. The money enables someone to acquire a powerful and prestigious position in government. Further, the politician needs this money every few years to keep the job. In both cases, I am giving you something of value. Do you imagine that I do not expect anything in return?
The best part is that I don’t even need to disclose my identity since the Supreme Court’s Citizens United ruling in 2010. As a result, I can use my money as leverage in case you do not give me what I want. There’s a wonderful organization known as the U.S. Chamber of Commerce where I can secretly funnel as much money as I want to fund your opponent and kick you out of office.
So what did the banksters get for their campaign contributions? TARP comes to mind. A former lobbyist for Goldman got appointed as Tim Geithner’s chief of staff. In case you’re not familiar with what a chief of staff does, he’s basically a gatekeeper that decides who can see his boss. So if you want an audience with the Secretary of the Treasury to discuss, say, corrupt business practices at Goldman Sachs, you’ve got to convince their former lobbyist to set the meet. Good luck, buddy! And as for the SEC, they are too busy watching porn to conduct serious investigations. I only wish the FBI had the Internet back then. We’d still be skimming casinos.
Okay, let’s take a deep breath and put together two more pieces of the puzzle:
3. Mob Family = “Too Big To Fail” Investment Banking Firm
4. Bribe = Campaign Contribution
Now here’s my favorite part. Do you remember all of that money that drained out of your pension plan? Do you think it all just vanished in a puff of smoke? Obviously, there are many complex economic factors that determine the value of stocks and other financial instruments. Alan Greenspan and Larry Summers probably understand this crap but I do not. However, I have a pretty strong suspicion where at least part of your money went.
Whether or not a casino made or lost money in a given month, we always could skim part of the cash that flowed through the count room. Similarly, the widespread turbulence of the markets seems to have little effect on the enormous bonuses paid out to investment bankers every Christmas. Interesting.
Let me paint a pretty picture for you. This is the story of Joe Sixpack and Lloyd Blankfein. Joe is an electrician in Utica. He dutifully puts his money into a pension fund. When the fund goes up, Lloyd takes his cut. And when the fund goes down, Lloyd keeps his cut. Joe loses his life savings and bags groceries at Wal-Mart. Lloyd uses his yearly bonus to buy another mansion in Westport. You can read the full story here.
So now let’s hammer the final nail in the coffin:
5. Wall Street Bonuses = Las Vegas Casino Skim
Things haven’t changed much except that the crap games on Mulberry Street moved downtown. And they became too big to get busted. Shutting down the casinos would bring down the entire world financial system.
I am in awe.
I am also amused at the complacency of you schumucks out there. While I’m waiting for pornographic videotapes to rewind on my VCR, I sometimes tune in to this Fox News Channel you’ve got. Americans are real pissed off these days. But instead of going after the guys who stole their money, they elect a bunch of Republicans who are even bigger banker-lovers than the Democrats
Let’s get something straight here. I don’t give a fuck about social justice. If you morons want to keep electing conservative Republicans for the next hundred years, that’s fine with me. I’ve got no beef with the banksters. I invest in gold and real estate. Always made money. I only worry about politicians who want to set up extradition treaties with foreign countries where I travel. That would be a bummer. Otherwise, knock yourself out.
I don’t know much about ethics. However, I do understand power and force. You can’t go against a guy like John Gotti because you will get killed. On the other hand, I don’t see what is stopping Americans from taking down these bald fat pricks on Wall Street. It all comes down to strength in numbers. Imagine a card game with ten guys. One of them cheats and wins all of their cash. The remedy is simple. The other nine players kick the shit out of the bum and get their money back. Now imagine an even larger table. Millions of players lose their shirts and a handful of jerks end up with all of the chips. If I had any skin in a game like that, I’d organize an angry mob with torches and pitchforks, give them bus tickets to Greenwich, loot the bankers’ mansions, and sell the swag on eBay.
And if you don’t dig violence, why not just elect some politicians who pass laws to tax the hell out of investment bankers? Even the backwards Brits with their crusty class system managed to enact a windfall tax. After we claw back their ill-gotten gains, the money goes into a government fund to create federal jobs like FDR did during the Great Depression. Or just give every citizen a rebate check so they can keep the heat on this winter.
These teabaggers crack me up. If they’d shut off the tube for five minutes and think about what I just wrote, maybe the workingman could take back his country.
UPDATE: I heard some kids are finally taking to the streets. That’s great. Protests are a great place to get laid. But be careful about the fuzz. That Brooklyn Bridge bust was a classic setup. Cops love to lure protesters into places with limited routes of escape.