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I made the decision to write “Dillon, Read & Co. Inc. and the Aristocracy
of Stock Profits” in the middle of a vegetable garden in Montana during
the summer of 2005. I had come to Montana to develop a venture capital model to support a healthier, fresher local food supply. If we want clean water, fresh food, sustainable
infrastructure, and healthy communities, we are going
to have to finance and govern these resources ourselves. We cannot invest in the stocks
and bonds of large corporations, banks and governments that are harming our food, water,
environment and all living things and then expect these resources to be available
when we need them.
Surviving and thriving as a free people depends on creating and transacting
with currencies and  investments
other than those printed and manipulated by Wall Street and Washington to the eventual
end of our rights and assets.
What I found in Montana, however, was what I have found in communities all across
America. We are so financially entangled in the federal government and large corporations
and banks that we cannot see our complicity in everything we say we abhor. Our social networks
are so interwoven with the institutional leadership — government officials,
bankers, lawyers, professors, foundation heads, corporate executives, investors, fellow
alumni — that we dare not hold our own families, friends, colleagues and neighbors
accountable for our very real financial and operational complicity. While we hate
"the system," we keep honoring and supporting the people and institutions
that are implementing the system when we interact and transact with them in our day-to-day
lives. Enjoying the financial benefits and other perks that come from that intimate
support ensures our continued complicity and contribution to fueling that which we
say we hate.
Standing among the beautiful vegetables and flowers that Montana summer day, I was facing
the futility of trying to craft investment solutions without some basic consensus about the economic
tapeworm that is killing us and all living things — while we blindly feed the
worm. In a world of economic warfare, we have to see the strategy behind each play
in the game. We have to see the economic tapeworm and how it works parasitically in
our lives. A tapeworm injects chemicals into a host that causes the host to crave
what is good for the tapeworm. In America, we despair over our deterioration, but
we crave the next injection of chemicals from the tapeworm.
With this in mind, I decided to write “Dillon Read & Co Inc.
and the Aristocracy of Stock Profits” as a case study designed to
help illuminate the deeper system. It details the story of two teams with two competing
visions for America. The first was a vision shared by my old firm on Wall Street —
Dillon Read — and the Clinton Administration with the full support of a bipartisan
Congress. In this vision, America's aristocracy makes money by ensnaring our youth
in a pincer movement of drugs and prisons and wins middle class support for these
policies through a steady and growing stream of government funding and contracts for
War on Drugs activities at federal, state and local levels.
This consensus is made all the more powerful by the gush of growing debt and derivatives used to bubble
the housing and mortgage markets, manipulate the stock and precious metals
markets and finance trillions missing from the US government in the largest pump and dump in history — the pump and dump of the entire
American economy. This is more than a process designed to wipe out the middle class.
This is genocide — a much more subtle and lethal version than ever before perpetrated
by the scoundrels of our history texts.
This case study provides a detailed example of the financial kickback machinery that makes the process go. It works something like this. A group of executives and investors start a company. Rather than build a business the old fashioned way, company profits are pumped up with government legislation, contracts, regulation, financing, subsidies and/or enforcement. This dramatically increases the value of the company's financial equity. The company and its initial investors then sell their stock at a profit. Such profits replenish contributions made to the kind of politicians who can arrange such government benefits. Such profits also fund philanthropy to foundations and universities that have large endowments that invest along side the investors. These tax-exempt organizations provide graduates to staff positions in the game, intellectual justification to attract popular support and photo opportunities which bestow legitimacy and social stature. Personnel cycle through the management and boards of business, government and academia, as real productivity falls and government deficits grow.
The second vision was shared by my investment bank in Washington — The Hamilton
Securities Group — and a small group of excellent government civil servants and appointees
who believed in the power of education, hard work and a new partnership between people,
land and technology. This vision would allow us to pay down public and private debt
and create new business, infrastructure and equity. We believed that new times and
new technologies called for a revival that would permit decentralized efforts to go
to work on the hard challenges upon us — population, environment, resource management
and the rapidly growing cultural gap between the most technologically proficient and
the majority of people. We believed that private and public capital should flow to that which was most economically productive rather than be mixed in a complex cocktail of insider deals designed to hollow out the American economy and culture.
My hope is that “Dillon, Read & the Aristocracy of Stock Profits”
will help you to see the game sufficiently to recognize the dividing line between
two visions. One centralizes power and knowledge in a manner that tears down communities
and infrastructure as it dominates wealth and shrinks freedom. The other diversifies
power and knowledge to create new wealth through rebuilding infrastructure and communities
and nourishing our natural resources in a way that reaffirms our ancient and deepest
dream of freedom.
My hope is that as your powers grow to see the financial game and the true dividing
lines, you will be better able to build networks of authentic people inventing authentic
solutions to the real challenges we face. My hope is that you will no longer invite
into your lives and work the people and organizations that sabotage real change. If
enough of us come clean and hold true to the intention to transform the game, we invite
in the magic that comes in dangerous times.
Yes, there is a better way and, yes, we can create it.
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