Temple of Mammon, Planet of Doom
When Frank Gehry gets around to designing America's answer to the Sistine Chapel,
I trust this postmodern Temple of Mammon on Las Vegas Boulevard will have a
ceiling fresco depicting Warren Buffett's consignment of $31 billion to Bill
and Melinda Gates. As the older billionaire sits on his pillow of cloud, his
outthrust hand with its bag of securities is grasped by Gates--the Adam of Software
Commerce--while seraphs and cherubs muse delightedly over the IRS regulations
governing the sheltering of Buffett's swag in tax-exempt nonprofit foundations.
Let us not waste too much time here advising Mr. and Mrs. Gates how to spend
Buffett's money. At the moment it seems that the Gates couple's core focus is
the war on AIDS and malaria, both ravaging Africa. How to improve the Dark Continent's
overall well-being? America's senators and representatives can be bought for
bargain-basement sums. A modest disbursement by the Gates Foundation-let us
say $50,000 for each senator and $20,000 for each rep-would most certainly buy
enough votes to end the current government subsidy, $4.5 billion for 2004, to
cotton growers. The entire crop that year, the last for which figures are available,
was worth $5.9 billion and the subsidy en-ables US growers to export three-quarters
of their harvest and control about 40 percent of world trade, thus destroying
the farm economies of countries like Mozambique, Benin and Mali. The WTO found
the United States in violation this spring, but the ten largest cotton growers
here-virtuous Jeffersonian toilers such as Kelley Enterprises (Tennessee) and
JG Boswell (California)-have the necessary political clout to keep the subsidies
coming. From 1995 to 2004, JG Boswell Co of California received $16,808,427
in cotton subsidies from the US government, while Kelley Enterprises received
With overthrow of the cotton subsidy as a pilot program, Gates could launch
a wider onslaught on the subsidies doled out to large wheat, rice and corn growers.
Economists are slightly more costly than politicians, but generous Gates "scholarships"
to prominent neoliberal economists would be contingent on these economists'
swift revision of their foolish theories, currently ravaging rural India.
In Vidharbha, a cotton-growing area of the state of Maharashtra, journalist
P. Sainath has reported in The Hindu that 540 suicides of ruined cotton farmers
occurred between June 2005 and May 2006. As many as 325 farmers have killed
themselves since January. May saw nearly eighty farmers taking their own lives,
ten of them doing so on a single day. Some weeks, Sainath reports, there have
been suicides every eight hours, usually by the ingestion of pesticide.
The reason for this catastrophe is the neoliberal onslaught on India's peasantry,
which has been advancing without remit for more than the past decade, promoted
by the World Bank and executed by India's federal and state governments. The
traditional NGO approach-ecstatic boasts in grant applications and annual reports,
zero benefits for the farmers-has been futile. It should be the job of the Gates
Foundation to turn the tide inside the ivory towers generating the economic
nonsense that has wrought such a dreadful toll.
One particularly delightful aspect of Buffett's $31 billion transfer was its
stately mime of the Great American Pageant. Here was no twitchy trader but Buffett
the wise investor, cherishing his favored stocks over decades, ambling around
his headquarters in homely Omaha. And here was the younger entrepreneur, no
longer the ruthless Master of Micro-soft but the Third World's Santa Claus.
Could America desire any more potent evocation of virtuous capitalism at work?
Surely not. And is this not a good time to evoke such virtues? It surely is,
because it's clear, as we head into the summer of 2006, that the world capitalist
system is out of control. Literally so. In the older order of things, international
bodies such as the International Monetary Fund, the central banks and kindred
bodies could claim to have some purchase on the overall situation. Not anymore.
The major players these days are thousands of managers of private equity funds-traders
in shares, bonds, derivatives and other instruments of a complexity that would
require the genius of the late Stanislaw Lem to evoke, as he did the planet
It's virtually impossible now to penetrate, let alone oversee, this vast Solaris
of speculative recycling of financial instruments such as credit derivatives.
As the historian Gabriel Kolko recently remarked in an essay here on the looming
crisis, "The credit derivative market was almost nonexistent in 2001, grew
fairly slowly until 2004 and then went into the stratosphere, reaching $17.3
trillion by the end of 2005. Banks simply do not understand the chain of exposure
and who owns what. Senior financial regulators and bankers now admit as much.
The Long-Term Capital Management hedge fund meltdown in 1998, which involved
only about $5 billion in equity, revealed this. The financial structure is now
infinitely more complex and far larger. The top 10 hedge funds alone in March
2006 had $157 billion in assets."
The Bank for International Settlements is no circus-tent Cassandra shrieking
about the onrush of Doom. Bankers don't shriek. But here's the BIS, trembling
before its crystal ball and talking, in its most recent annual report, about
"planning for the worst. Consider first a discrete event which, if it occurred,
would disrupt financial markets. What might be done in advance to prepare for
such an eventuality? One important step would be to ensure the integrity of
domestic lines of communication among core financial firms, their supervisors,
the central bank and the operators of systemically critical parts of the financial
infrastructure. Another would be to ensure similar openness at the international
level. Stress testing is now almost universal in financial firms, which is highly
desirable. Yet stress tests are based on simplifying assumptions that necessarily
fail to match the complexity of real world events." That's a banker's way
of saying, "The show could blow up tomorrow, and there may not be any way
to stop it." Steve Wynn should get Gehry to work on the Temple of Mammon
sooner rather than later.
Read from Looking Glass News
Buffett, and the Corporatization of Children
philanthropy of Warren Buffett
donates $30 billion to the Gateses’ "Charity"