The Dictatorship of Woke Capital

How Political Correctness Captured Big Business

Stephen R. Soukup

• Publisher: Encounter Books
• Year: 2021
• ISBN:
  9781641771436
• Topic: Commerce
• Subtopic: Déontologie des affaires

For the better part of a century, the Left has been waging a slow, methodical battle for control of the institutions of Western civilization. During most of that time, "business"— and American Big Business, in particular — remained the last redoubt for those who believe in free people, free markets, and the criticality of private property. Over the past two decades, however, that has changed, and the Left has taken its long march to the last remaining non-Leftist institution. Over the course of the past two years or so, a small handful of politicians on the Right — Senators Tom Cotton, Marco Rubio, and Josh Hawley, to name three — have begun to sense that something is wrong with American business and have sought to identify the problem and offer solutions to rectify it. While the attention of high-profile politicians to the issue is welcome, to date the solutions they have proposed are inadequate, for a variety of reasons, including a failure to grasp the scope of the problem, failure to understand the mechanisms of corporate governance, and an overreliance on state-imposed, top-down solutions. This book provides a comprehensive overview of the problem and the players involved, both on the aggressive, hardcharging Left and in the nascent conservative resistance. It explains what the Left is doing and how and why the Right must be prepared and willing to fight back to save this critical aspect of American culture from becoming another, more economically powerful version of the "woke" college campus.

CHAPTER 1

TO WHOM DOES WALL STREET BELONG?

For most of the last century, the mainstream and entertainment media have caricatured Republicans and conservatives as wealthy, uncaring, and completely out of touch with the average man. Daddy Warbucks—the original cartoon version, not the Hollywood reimagining—was an advocate of free markets and self-sufficiency. As such, he was opposed to welfare and the New Deal. This made sense, of course, in Depression-era politics; after all, Wall Street and its Republican allies had caused the Great Depression. After the 1928 election, Republicans controlled all the levers of power in Washington, so when the markets crashed just nine months into Herbert Hoover’s presidency, he and his party bore all of the blame. When the Dow closed on July 8, 1932, it had nearly completely collapsed from its pre-crash highs. From the pre-crash peak to that post-crash trough, the Dow lost a staggering 89 percent of its value.¹ The depth of this plunge was so overwhelming and erased so much wealth that massive economic hardship followed inevitably in its wake. The subsequent series of cascading economic calamities were known collectively as the Great Depression. The financial and economic causes of the Depression were numerous and complicated, but the political causes were much less so. Wall Street and Republicans had overseen the carnage. And Wall Street and Republicans would suffer the political consequences.

By contrast to Hoover, Franklin Delano Roosevelt, the Democratic governor of New York, was heralded as a savior, the only man who could harness the power of the state to make everyone and everything whole again. Hoover, who in 1928 had won 444 Electoral College votes in a massive landslide victory against Alfred E. Smith, could only muster 59 Electoral College votes four years later. Republicans were swept from power in both houses of Congress as well, as Roosevelt and his “Brain Trust” promised to rescue those who had been beaten and battered by the Republicans, Wall Street, and the Depression they had caused. Though a patrician himself, Roosevelt connected with the people on a populist level, earning their complete and undying faith. As the great country music songwriter Bob McDill later put it in his “Song of the South,” which became a smash hit for the band Alabama:

Well somebody told us Wall Street fell

But we were so poor that we couldn’t tell

Cotton was short and the weeds were tall

But Mr. Roosevelt’s a gonna save us all ²

Wall Street, “fat cats,” “country-clubbers,” and “business tycoons” all became foils for the populists and even mainstream Democrats. Republican sociopaths cared about nothing other than their own wealth and power and were forever trying to take things from the poor, or trying to manipulate the downtrodden, or trying to cut government services for single mothers. By the 1980s, this caricature had become firmly ensconced in the public’s imagination. Gordon Gekko was, of course, a fictional character, but to many in the country, and especially in Hollywood and the media, he was the embodiment of the Republican ethos. Greed is good, Gekko proclaimed, and the Reagan-era media promptly forgot that he and his proclamation were the figments of the overly active imagination of a Leftist film director named Oliver Stone. The decade of tax cuts, unparalleled economic growth, and the defeat of the Soviet alternative to capitalism was itself caricatured as “the decade of greed.”

When Bill Clinton challenged George H.W. Bush for the presidency in 1992, the young Southern populist framed the campaign as a choice pitting the “out-of-touch” country-clubber and holdover from the decade of greed against the humble son of a single mother and champion of the middle class. Between Vice President Dan Quayle, who had risen to the heights of American power despite being unable to spell “potato,” and President Bush, who was so clueless that he was amazed by barcode scanners at the grocery store, Clinton’s sophisticated campaign team painted a picture of an administration and a party far removed and insulated from the day-to-day lives of most Americans. “It’s the economy, stupid,” the Clinton team taunted Bush and Quayle, two men who, they insisted, owed their places in the world exclusively to their privilege.

Of course, it didn’t matter to the Clintons and their entourage that the grocery-store scanner bit was a total fabrication³ or that Dan Quayle’s “potatoe” incident was considerably more nuanced than the media allowed.⁴ All that mattered was that both incidents fit the stereotype of the rich, pampered Republican. And both, therefore, “proved” the need to take the country back for the “regular folks.”

Very few in the media noticed, or if they did notice very few of them cared, that once he had beaten George Bush, Bill Clinton himself turned immediately to Wall Street for help formulating an economic plan. Robert Rubin, the former co-chairman and co-CEO of the Wall Street behemoth Goldman Sachs, became one of Clinton’s most trusted economic aides, the director of his National Economic Council, and one of the most prominent and consequential economic players in decades. Rubin was sworn in as the secretary of the treasury on January 11, 1995, just in the nick of time to rescue his old friends and colleagues at Goldman from the consequences of their own recklessness in the Mexican Peso Crisis. In 1997, at Rubin’s constant urging, President Clinton signed the repeal of the Glass-Steagall Act, a move that had been high on Wall Street’s wish list for years. When Rubin left the Clinton White House in 1999, he returned to Wall Street and to Citigroup, where he proceeded to “earn” a staggering $126 million over the next ten years, thanks in part to the policies he pushed Clinton to enact.

In truth, the link between the Republican Party and Wall Street had always been a myth, a caricature from the Depression era that was false even then. Herbert Lehman, a liberal Democrat and a partner in his family’s now-defunct investment firm, Lehman Brothers, had succeeded FDR as the governor of New York and later served in the Roosevelt administration. Investment banker C. Douglas Dillon served both the Kennedy and Johnson administrations as treasury secretary. And his replacement, Henry Fowler, left government service and became a partner at Goldman Sachs.

From the perspective of Wall Street, the thing that made the Clinton presidency so important, aside from Rubin’s influence, was that it coincided with the American awakening to the importance of the mechanics of the equities markets. The Revenue Act of 1978 had created a tax loophole—Section 401(k)—that was intended to allow corporate executives to defer pay and bonuses without incurring immediate tax liabilities. In 1981 Ted Benna, a benefits consultant with the Johnson Companies, had the brilliant idea to allow employees to defer a portion of their own salaries the same way, creating a retirement savings vehicle that would complement traditional pension plans. By 1983, companies across the country were offering employees 401(k) savings plans. By 1990, 401(k) plans held some $384 billion in assets, and by 1996 that number had nearly tripled to more than $1 trillion.⁵ From Clinton’s inauguration in 1993 to the pre-crash market highs in December 1999, the Dow Jones Industrial Average nearly tripled as well.⁶

During the 1990s, Wall Street became democratized—and Democratized—which is to say that it became not only a savings option and object of economic obsession for the masses, but also a bastion of “progressive” political thinking.

Although the decade began with the election of a Southern Democrat, that Southern Democrat was different from his predecessors. He was also a Baby Boomer, the first of his generation elected president. And he brought with him the Baby Boomer moral ethos, which is to say their relaxed attitudes toward sex, about marriage, about religion, faith, and family. Bill Clinton would be the last of the Southern Democrats who could win an election with much support from the old South. Eight years later his vice president, Al Gore, the pride of Tennessee, couldn’t carry his home state in his loss to George W. Bush. If he had, he, not Bush, would have been the forty-third president. But by the time he ran, after eight years as Clinton’s second-in-command, the cultural and political landscape had shifted beneath his feet. The realignment that had begun with the Baby Boomers’ cultural awakening in the 1960s was complete.

And it wasn’t only the South that shifted its alliance. The parties essentially swapped places on the electoral map, with the Republicans taking control of the new Solid South and the Democrats owning both coasts, including, most notably, Manhattan’s Financial District. Over a span of sixteen years, from 1992 to 2008, Wall Street shifted aggressively to the left.

Goldman Sachs co-CEO Jon Corzine served in an advisory capacity to the Clinton administration and, after heeding the New York Fed’s call to arrange a bailout of Long-Term Capital Management, got the itch to play politician, eventually serving as both a Democratic senator from New Jersey and the governor of the state. And while the old South may have let Al Gore down, Wall Street picked him right back up again. In 2004, with the assistance of David Blood, the former CEO of Goldman Sachs Asset Management, Gore founded Generation Investment Management, a “sustainable” asset management firm and one of the first big players in the ESG investment space.

By the time the 2008 election cycle rolled around, Wall Streeters had fully and firmly embraced the Democratic Party and actually dragged it leftward. Hillary Clinton, then the sitting senator from New York, was pushed aside by her adopted home state’s most affluent and influential residents in favor of Barack Obama, the young, charismatic, ideological tabula rasa from Illinois. Wall Street loved Obama and especially loved his social liberalism and his economic malleability.

During the 2006–2008 election cycle, Wall Street ponied up big for the Democrats and especially for Obama. Goldman Sachs (its PAC, its employees, and their immediate families) was the second-largest donor to Obama overall. J.P. Morgan was fifth, Citigroup seventh, and Morgan Stanley rounded out the Top 20.⁷ The Democratic takeover of Wall Street was complete.

In a long post-election piece for National Review, Kevin Williamson noted that the Republicans had “lost Gordon Gekko,” their erstwhile indefatigable caricature.⁸ Williamson also explained, in large part, how the loss had thoroughly changed the face of Wall Street. He quoted one bond trader who told him, “Of course these guys aren’t conservative. Why the [expletive deleted] would they be? We’re talking about guys who live in Manhattan, guys with manicures and eight-figure bank balances. And their wives—their wives aren’t showing up at parents’ day at Brearley with a Sarah Palin button. It’d be like showing up in flip-flops from Walmart. Like showing up in a [rather lengthier expletive deleted] tracksuit.”

The differences between Wall Street in 1988 and Wall Street in 2008 were shocking. The transformation was nothing less than total. In the 1980s, Republicans in pop culture looked like Randolph and Mortimer Duke, the wealthy commodity brokers in the movie Trading Places who toyed with people’s lives just for fun. By the 2010s, however, Republicans were much more likely to be compared to Bo and Luke Duke, the reckless, redneck country boys who drove gas-guzzling cars and clung bitterly to their God and their guns.

The question is how that transformation took place, what changed over two decades to push good ol’ country boys from Left to Right and wealthy Wall Streeters from Right to Left.

The simple answer is that the traditional Left died. And while the news of its death had not yet been relayed to all four corners of the earth by 1988, it most certainly had by 2008. This death of the traditional Left was not sudden. It suffered slowly, agonizingly for decades, starting at the end of World War I.

Among other things, the traditional Left promised that which could not be delivered. Rousseau’s embrace of the “egalitarian State of Nature” enabled and encouraged a second, quasi-secular, post-Christian outbreak of revolutionary, chiliastic fantasies throughout the West. But like all such fantasies, these were inevitably doomed to fail, and this failure carried consequences.

In the West, the failure of the Left to deliver on its promised Utopia exacerbated a crisis of belief and elevated the epistemological skepticism of Nietzsche to new heights. In response to socialism’s disappointments, the Left abandoned reason, abandoned “reality,” and, in the end, rejected the Enlightenment itself in favor of relativism.

All of this constituted a death blow for the Left as it had existed. The Left was, after all, specifically and incontrovertibly a product of the Enlightenment. In fact, its sole purpose was to advance the so-called “Enlightenment Project,” which turned into a three century–long attempt to construct a reason-based moral system to replace the Judeo-Christian framework.

This project, however, was doomed from the beginning by its refusal to recognize the premise upon which the Christian moral system was based: that man is flawed and neither reason nor science could fix him. Man could not—and cannot—be perfected. His “Millennium,” which is to say his “paradise,” is otherworldly. It is beyond that which he, with his imperfect nature, is able to create on Earth.

But while the quest for a better system failed, it nevertheless managed to damage Christianity so badly that by 1884, Nietzsche was able to declare that God was dead. Ironically, but unsurprisingly, this “victory” on the part of the Left created the conditions for its own demise. The movement drew its nourishment from its hatred of Christianity, which it claimed was responsible for all of mankind’s woes. Naturally, then, as Christianity lost its previously unrivaled importance, the Left did as well.

The failure of the Left to deliver its promised pseudo-Christian Utopia created a crisis of confidence and, in turn, a crisis of reality. The American liberal dream managed to struggle along for its first few decades, but by the 1960s it was evident that the narrow economic successes that state liberalism enjoyed were driven primarily by noneconomic, non-repeatable events, such as the flight of gold from pre-war Europe, the war effort itself, the post-war American geopolitical hegemony, and the post-war demographic boom. The comparative normalcy of the 1960s and the 1970s more or less ended the Keynesian fantasy.

But if the American Left’s failures were spectacular, the global Left’s failures were more spectacular still. The viciousness and murderousness of Stalin’s purges, the cold-blooded slaughter of millions of Chinese peasants, the violence, the bloodshed, and most especially the economic failure of the world’s Leftist regimes belied the blissful idealism of the Marxist dream.

This book is divided into two sections. The first of these provides a brief history of the evolution of the Left from the economic ideology that spewed forth from Marx’s poisoned pen to a cultural weltanschauung that denies the relevance and even the existence of its ideology’s prior failures and appeals strictly to the vanity of the upper classes rather than the suffering of the working class. The second section documents the effects of this change on the capital markets and on business more generally, the damage done already and the damage yet to come.

The transformation of Wall Street was no accident. It was the product of a long, careful process, a march through various other institutions, turning them on their heads until the titans of “capitalism” had been fully convinced that their surrender to the culture was not merely inevitable but constituted the only morally legitimate path.

WELL, HOW DID WE GET HERE?

CHAPTER 2

WILSON, WALDO, AND THE FED

Our story—the story of the politicization of business and of its funding sources—has two starting points, two fountainheads from which sprang streams that wound their way independently through Western civilization for nearly one hundred years, converging near the end of the last century to form a powerful river of political agitation disguised as “good corporate governance.” These two streams—the streams of contemporary liberalism...