The Wall Street Extortion Scheme

NEW YORK (Frameshop) – Beyond the tear gas and stun grenades,  the latest attempt to discourage and disperse Americans protesting against economic injustice has come from Wall Street types heading into the street to denounce the evils of government, extol the virtues of unregulated globalism, and finger the real source of financial suffering: Americans who, supposedly, would sell their own children into slavery just to make sure WalMart never runs out of cheap cell phones and 50-gallon drums of Juicy Juice.  In terms of persuasion and meaningful debate, the effort has been useless. Not a single protester has moved to anything but more anger and resolve by these obnoxious arguments.

Interestingly, however, these new encounters have served a purpose: they have captured on tape the ongoing extortion scheme Wall Street robber barons heretofore reserved for closed-door meetings.

The Washington Post caught Wall Street confidence man, Peter Schiff as he headed down to Zuccotti Park to lecture protesters.   As you can see in the video of the exchange that ensues between Schiff and an OWS protester, the debate consisted of a long non-communicative exchange in which Schiff offers Wall Street education soundbites, including:

  • government created slavery
  • people with low-wage jobs who complain about work conditions should just quit and get another job
  • employers want to force down wages only because customers want low prices

For his part, the protester who Schiff tried to lecture was on much more solid ground with remarks like:

  • There is a role for government in our society–corporations cannot do everything.
  • Of all the people who praised Steve Jobs when he died, nobody every asked him why he didn’t open a single manufacturing plant for the iPhone in the U.S.
  • Prices are not high because American workers want too much–like health care.
These are solid, well presented points in the larger OWS argument about corporate greed–protected by a government corrupted by corporate money–driving millions of Americans to the breaking point.  And they were presented with passion.
To be clear, though, Schiff did not go down to Zuccotti Park with an eye towards convincing people rallying against Wall Street with fire in the belly.  He went there to roll out the Wall Street extortion scheme.
What is the Wall Street extortion scheme? In simple terms, it is a coercion game aimed at threatening Americans with total economic collapse if big corporations do not get exactly what they want.  In more specific terms, it takes the form of threatening to move all capital out of the American economy if government does not tip the playing field to the advantage of big corporations on tax policy, labor regulation, wages, and manufacturing.
Do what we say, or…uh–da whole joint goes down in flames.
Schiff does a great job parroting the Wall Street extortion scheme.
Government initiatives that seek to prevent such past national travesties as: workplace deaths, inhumane manufacturing conditions, fair wages, reasonable working hours, contamination of ground water, illiteracy, etc.–all these initiatives are, in Schiff’s extortionist’s jargon, “outside the Constitution.”
Translation: eliminate the EPA, FDA, DOE or–we will move our capital someplace that doesn’t bother us about pollution, poisons, and education– and see what happens to the US economy when we leave.
On the subject of fair wages, Schiff demonstrates perfectly how aggressive Wall Street extortionist scheme can be.
When pressed on low wages at WalMart, Schiff responds with the threats: those jobs do not belong to the people who work them.
Translation:  Push us on fair wags and we will move our capital someplace that will not bother us–and see what happens to the US economy when we leave.
That is the basic extortion scheme. Give us what want or we’re outta here–push us too hard and we’re outta here.
Does the extortion scheme work?  You bet your Tony Soprano CD collection it works.  Man, oh, man does it work.
When U.S. corporations in the 1980s got tired of negotiating with unions for fair wages, fair health coverage, and fair retirement packages–they took the extortionist scheme to Washington.  “We’re tired of paying fair wages for fair labor. Get rid of the regulations–or we’ll take our money elsewhere.”  And so they did.
And then Wall Street got tired of the pesky regulations put in place after the Great Depression–rules that kept the bank with your savings accounts and retirement funds separated from the firms with out-of-control gambling desks. “We’re tired of making millions of dollars gambling in the markets when we could be making billions and trillions.  Get rid of the regulations–or we’ll take our money elsewhere.” And so they did.
But it was not just the threat of taking their money and  heading elsewhere that worked so well on Washington.  The real coercive power of the Wall Street extortion scheme came from knowing who would be blamed for the suffering caused by massive spikes in unemployment and whole states dying from economic collapse.  The blame would fall squarely on Washington.
And so Washington gave Wall Street  what it wanted, time and time  again.
The tendency of Wall Street front-men like Peter Schiff to use the talking points of the extortion scheme is a crucial point to see as OWS moves into this “give the hippies a lesson” phase.
Even more disturbing, however, is the unspoken logic of a neoliberal conception of globalism that makes the deep arrogance of Wall Street extortionist rhetoric possible.
The free flow of money has produced an entire generation of capital managers and investors who no longer see the United States as their home, but instead see as their mark.  And if the U.S. government won’t play–well, then they will just find another mark someplace else.
The extortionist scheme, in other words, brings to the fore a particularly loathsome 21st-Century creature: robber barons who claim American values as their raison d’être, but who use their global reach to remake America as a financial haven that serves their limited, self-centered interests.
Not much point in arguing with someone like that.  Better just to show them what it looks like when millions of Americans find the courage call their bluff.


2 Comments so far. Leave a comment below.
  1. Scott Johnston,

    Very Good writing, I’m on the same page (I agree with you). I watched the video of the arrogant Mr. Schiff. I liked it when the guy Schiff was talking to said Schiff was an idiot and it was a waste of time to argue with a fool. Proverbs

  2. We are facing one of the worst addictions in our time on corporate & political levels -GREED. Unlike other addictions that can destroy a person, family and friends; greed has the ability to destroy community, society, even countries. There is never enough, there is only a continual need for more, until there is nothing left.

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