I have made friends with a lot of people in my life. But as working-class kid from Pittsburgh, perhaps my most unusual friendship was with a Goldman Sachs executive, Pedro Henrique Fragoso Pires Garcia.
Typically in Brazil, people abbreviate their names, but Pedro used his full name. including his mother’s maiden name, Fragoso Pires, to signal his membership in the Fragoso Pires , a legendary aristocratic family in Brazil.
Born into a wealthy family, Pedro didn’t work for Goldman Sachs because he needed the money, but because he wanted more.
We met while studying economics at Bucknell. He struck me as an incredibly insecure person.
He bragged that his uncle used to invite women to dinner. After picking them up in a limousine, he would surprise them by flying them to dinner in New York on his private jet.
Pedro bragged himself about how he was able to surprise his own girlfriend with tickets to Venice – albeit on a commercial airline. In contrast, my romantic generosity usually consisted of taking my girlfriend out for a special dinner at a local Italian restaurant. I typically found it pretty cool to be able to afford to do that, let alone international travel.
Guys like Pedro didn’t care how they got their money. As long he was able to get some money to cruise around the world like a playboy, that’s all he cared about. Heck, I bet that members of Pedro’s crowd wouldn’t mind a return to slavery if it meant more money for them.
In fact, Goldman Sachs, who Pedro works for, has been caught funding projects that invest in slavery in Sudan. Goldman Sachs handled the IPO of PetroChina, the parent company of which was using forced labor in Sudan.
One time when I was in Brazil, Pedro took me to his family’s massive plantation several hours outside of Rio de Janeiro. Picture the modern-day version of the plantation from “Gone with Wind,” except bigger and with a full gym, sauna, steam room, two pools, satellite TV, Wi-Fi and a man-made lake full of jet skis.
While the plantation might have been a more high-tech version of Tara, the antiquated mentality of the 19th century plantation capitalism was very much alive. The type of capitalism that said some people were meant to be poor and powerless and others like Pedro to be the rulers of society. One or two of the dozen or so servants that lived on the plantation were direct descendants of the slaves that had lived there a few generations earlier.
Pedro showed me pictures of what the plantation used to look like in the good old days when it was an actual plantation full of slaves rather than a pleasure resort. He even showed off the old slave chains. As an advocate for workers’ rights, I didn’t share his enthusiasm for this particular historic relic. It was about one of the most awkward experiences of my life, until we had dinner.
My jaw dropped at the chandeliers, assortments of golden silverware and the wall full of painted portraits of the matriarchs of Pedro’s family dating back nearly 200 years. My head went spinning even more as Pedro continually rang a bell to indicate for the servants to bring in the next course of a five-course meal.
The next day, we were all sitting poolside at Pedro’s plantation. I got up to go into the kitchen of the house 20 feet away to get a beer. Pedro said to me, “Oh, just ring the bell; they’ll bring a beer.” Thinking of what folks at home in Pittsburgh would do if they found out I had used a bell to call for a servant to bring a beer, I decided to get up and get my own damn beer.
The next day, as Pedro and his buddies, who were visiting the plantation that weekend, sat around at the pool, they sounded off against the popular Brazilian welfare program for single mothers – Bolsa Familia. Bolsa Familia helps single mothers living under the poverty line to send their children to school, which alleviates the pressure on poor families to send their children to work in violation of child labor laws. Bolsa Familia was cited by the United Nation for reducing poverty by 27 percent in Brazil.
The success of the program and its significance to progress in their country was apparently lost on the privileged, as Pedro and his friends lounged by the pool ringing bells for servants to bring them beers while they complained about how poor people should be rewarded to be lazy and unproductive.
The realities of poverty were totally lost on Pedro and his friends. They seemed entirely consumed by partying, “scoring” with mindless, beautiful women and jetting off to popular vacation spots. Never mind that none of them had actually earned the money to support this lifestyle. Funny how they never questioned the justness of inherited wealth, but decried the use of public funds to help impoverished children go to school.
Nobody questioned the social structure or dared question how the money came in that funded such pursuits. They would never jeopardize the social hierarchy that allowed privileged families to live comfortably for hundreds of years, with armies of servants to attend their every need at the beck of a bell.
These guys who work at Goldman Sachs come from completely different worlds than we working-class people. They believe in putting profits and principles above everything else. Corporate culture, whether learned through families, university or workplace, teaches peoples and enforces the idea of profits above all else – rewards like exotic gateways to follow.
These guys love inequality because keeping people poor allows them to live the outrageous lifestyles they do. In fact, as a famous memo on plutonomy from Citigroup, shown in Michael Moore’s movie “Capitalism,” demonstrates, they believe such inequality is good because only the rich matter:
There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the “non-rich”, the multitudinous many, but only accounting for surprisingly small bites of the national pie. […] i.e., focus on the “average” consumer are flawed from the start….
This imbalance in inequality expresses itself in the standard scary “global imbalances.” We worry less.
While, for most of us, growing inequality means the highest unemployment and lowest wages since the Great Depression; for people like Pedro Henrique Fragoso Pires Garcia, your bonuses go through the roof.
And you go back to your pool on your pleasure plantation, ringing the bell for the servant to bring you a beer.
Wall Street offers lifestyles and rewards so grand that some will do anything in order to get them.
Tough financial reform will help for a while, but eventually they will find loopholes or buy enough influence to create them as the financial lobby already is spending $344 million in the first nine months of 2009 on lobbying. Nothing can stop them from these lifestyles. The social statuses of these super rich depend upon having these degrees of wealth. They will do anything to stay on top socially. Passing much needed financial reform isn’t enough to break the vicious cycle. We have to make the punishment for unbridled wealth greater than the rewards of multiple houses, thousand-dollar dinners and exotic getaways that Wall Street has to offer.
We need to engage in some “shock and awe” tactics to scare these Wall Street guys.
We need to throw these guys in jail for a very long time. We need to lock the big guys who were at the heads of the major banks up behind bars, far away from their servants, pleasures farms and, more importantly, our pocketbooks.
The saving and loans scandal saw over a thousand industry insiders go to jail. An even bigger financial crisis, the one we are currently in, has seen only a handful of smaller players like Bernie Madoff. None of the big fish that were the CEOs and responsible for driving this process have been put in jail, though.
This week, on January 13, Pedro Henrique Fragoso Pires Garcia’s boss, Goldman Sachs CEO Lloyd Blankfein, will appear before the Financial Crisis Inquiry Commission chaired by Phil Angelides, modeled after the former Pecora Commission during the Great Depression. The Angelides Commission, armed with subpoena power, has the mandate to investigate what went wrong on Wall Street. The investigative work of the Angelides Commission can be used as the framework for a criminal investigation into financial wrongdoing. However, a lengthy investigation isn’t enough.
These punks should be prosecuted. The appointment of a special prosecutor such as Patrick Fitzgerald, who demonstrated a real commitment to confronting corruption on both sides of the aisle by taking down Scooter Libby and Rob Blagoveich, should be made. President Obama needs to take on the threat to the American economy that these economic terrorists pose with the same vigor he is taking on the supposed terror threat in Afghanistan. An appointment of a special prosecutor such as Fitzgerald, with thousands of investigators underneath him, should be made.
If no action is taken to remove these corporate criminals, voters will surely enable the people enabling them. As the forced retirement of Chris Dodd shows, America has an appetite for holding those accountable who sat by and let Wall Street plunder the economy.
Recent public opinion polling that shows the Tea Party Movement is more popular than both the Democratic and Republican Parties, proves that voters are disgusted with both parties. They view both parties as little more than enablers of the corporate elite.
If Obama and Democrats fail to act in such an aggressive manner, voters will throw Democratic incumbents out of office just as they did Republican ones in 2008. Populist candidates, both from the populist left against GOP incumbents, will sweep into office, but even more populist candidates will beat Democratic incumbents since there are currently more Democratic incumbents. And with a sweep of right-wing demagogues, the ability to transform the economy in the way that FDR did was squandered. Wall Street will go about its ways.
And Pedro Henrique Fragoso Pires Garcia and his buddies will go about lounging by the pool, ringing the bell for his servants to bring him a beer.