June 2011 by Rogue Philosopher
The Asylum: The Renegades Who Hijacked the World’s Oil Market by Leah McGrath Goodman details how a handful of commodity traders on the New York Mercantile Exchange (NYMEX) manipulated the energy futures markets and thereby did more than their share to destroy to our economy.
A singular tragedy in this sordid tale is how the commodity markets finally succumbed to the unbridled greed and power lust that characterized the rest of Wall Street. The commodity futures markets were always the bad boys of the financial community. They didn’t play by the stuff-shirt, pinstriped rules of the banks and investment community. The players on the NYSE and AMEX were mostly dullards. By contrast, the boys and gals at the Commodity Exchange Center in the World Trade Center were a colorful, indeed, even charismatic lot. The traders were outcasts, renegades, cowboys. They stood apart from the financial herd. They drank hard, partied hard, and womanized shamelessly.
In short, they were a lot of fun.
The commodity futures markets were also the one last place in the financial community where someone starting out from humble beginnings and without the advantages of social or political connections could, with some assistance from Lady Fortuna, make it big. Or at least make a real good living for himself and his family. Traders like these represented one of the few remaining symbols of the American Dream.
As Goodman tells it, the insatiable egoism of the new breed of traders that took to the floors after the 80’s aped that of capitalist leviathans such as Goldman Sachs and Lehman Brothers. The democratic aspirations of the free market economy gave way to the cabals of capitalist oligarchs. Traders became the co-conspirators of financial tyrants. Schemers and scoundrels sacrificed the American Dream and instead bequeathed to the world a Global Economic Nightmare.
The descent of the futures markets into the orgy of rabid speculation and scheming that have characterized the past two decades or so are just one more chapter in the collapse of capitalism both in theory and in practice. That is, if indeed capitalism the theory was ever remotely the same as capitalism the practice. Perhaps the most charitable thing one can say about capitalism is what GK Chesterton said about Christianity: The problem with capitalism is not that it has been tried and found wanting, but rather that it has never really been tried at all. Perhaps it never could be.
The partying, drinking, doping and more apparently still continue. But in the wake of its insatiable greed NYMEX left the American Dream just about for dead on the Street.
Et tu, Brute?