When I was on Wall Street, we used to think the investment bankers who made new business
visits---"cold calls"---in Alaska were pretty adventuresome. We called these
trips "Tundra patrol." Clearly, I was naive about what constituted exotic
investment banking adventure. The Chairman of the New York Stock Exchange, Richard
Grasso, has underscored for me how much times have changed.
In late June, numerous news services reported that Chairman Grasso and members
of his executive staff flew to Colombia to meet with a spokesperson for Raul Reyes
of the Revolutionary Armed Forces of Columbia (FARC), the country's largest leftist
rebel group. The purpose of the trip was to bring a "message of cooperation from
U.S. financial services" and to discuss foreign investment and the future role
of U.S. businesses in Colombia.
It does not take much reading in-between the lines to conclude that Grasso's mission
somehow relates to the continued circulation of cocaine capital into and through the
U.S. financial system. Perhaps it would not be so wonderful if the Colombian rebels
started circulating their profits back into local development without the assistance
of the American depository and investment system. Worse yet, it would not be so wonderful
for organized crime profit margins or the War on Drugs if the FARC's increasing military
and political effectiveness were to, as FARC proposes, remove illegal profits by controlling
the decriminalization of cocaine. It was only a few days after Grasso's trip that
BBC News reported a GAO report to Congress as saying: "Colombia's cocaine and
heroin production is set to rise by as much as 50% as the U.S. backed drug war flounders,
due largely to the growing strength of Marxist rebels."
We can deduce from this incident that the liquidity of the NY Stock Exchange is
sufficiently dependent on high-margin cocaine profits that the Chairman is willing
for the Associated Press to acknowledge that he is making "cold calls" in
rebel-controlled peace zones in Colombian villages. That means that the myth upon
which American global hegemony and liquid capital markets depend – the myth
of the rule of law – is fraying.
Drug capital provides low-cost capital, but not as much as the liquidity generated
by the belief that in America, the government's word and our contracts are reliable
and enforced by the rule of law. Grasso's trip underscores the fact that if we do
not flip our model soon, we are headed into a tipping point when the unhealthy drives
out enough of the healthy to implode the entire financial system.
Chairman Grasso's trip says to me that organized crime dollars have replaced petrodollars
as the American financial system's number one circulatory disease and our addiction
to drug profits is increasing our risk of a financial heart attack.
First Published in July 1999 |
