10 min read

The Chickenshit Club

The Chickenshit Club

“Today’s Department of Justice has lost the will and indeed the ability to go after the highest-ranking corporate wrongdoers.” wrote Jesse Eisinger in The Chickenshit Club, writing of the US Attorney's office. All of the figures in federal justice that so many have canonized as protectors of democracy in the present, in the extremely recent past, came from places like the Southern or Eastern Districts of New York, or the depths of regulatory agencies, wherever the government was tasked with the prosecution of the biggest offenders against the public interest, and they did worse than fail, they didn't even try.

The phrase "chickenshit club" itself, as you might have guessed, refers to inside these US Attorney's offices where the fear of failure, putting future appointments and other professional prospects in jeopardy, results in a failure to do one's job. And yet, after the 2008 financial crisis, not a single banker was put in prison, the banks were "too big to fail", and well, every US Attorney in New York's Southern District joined the club. This represents that, at a fundamental level, the bipartisan project of encouraging and profiting from a corporatist autocracy ultimately resulted in the world where these autocrats can do as they please, the state can pretend to care about apprehending them, while allowing them to dictate policy and their own terms for sentencing, if at all.

In the series Billions, the US attorney, Chuck Rhoades is on the trail of a blatantly corrupt investor, Bobby Axelrod, and his firm, Axe Capital. Rhoades, like many in his field, comes from privilege, and is intimately familiar with the propensity towards wrongdoing, as opposed to Axelrod who "came from nothing" and got rich following a freak set of circumstances after 9/11 when he found himself at the helm of a firm that was about to fire him before he ascended to leadership as a result. Rhoades approaches this strategically, but things frequently get personal, and both Rhoades and Axelrod wrestle with the question (not the consciousness) of their class prerogative in their approach to wealth– Rhoades comes from money, but in the US attorney's office, relies on his wife, an Axe employee, to sustain their finances at the level to which they're accustomed.

Rhoades, unlike his real-life peers, makes a point of seeking out inroads towards prosecution of Axelrod,  but consistent with his position, behaves strategically, cutting deals where possible, avoiding trials, insisting a settlement, sanctions, and bans are justice for the public. The real world example of something that ineffectual being cast as groundbreakingly combative with finance is something regulatory like the CFPB, which yes, recovers consumers who got preyed upon, but the recovery is so small relative to the profitibility of the underlying criminality and exploitation that it's the equivalent of a speeding ticket and paying a buddy to watch the driving school video for you.

Given the opportunity to do some lasting damage to the corporatist autocracy that runs our state and the system consistently bends towards empowering more, regulating less, and enforcing basically nothing of what is regulated, they wimp out– the flip side of the zeal for criminal prosecution of the poor and otherwise marginalized by prosecutors up and down the court systems. But this piece isn't really about that, it's about how the scale of the transaction, how these large sums appear to the public is its own function of corporatist autocracy, and it makes having a good faith discussion between the public and the state almost impossible if there's no understanding that recovering hundreds of thousands of dollars annually, for example, is objectively not only not a lot of money, but not even a real penalty, when the underlying criminality is represented by a figure with at least four more zeros in profitability.

A non-governmental example is something like labor organizing in white collar professions– you might be paid highly, and the salary may be outsized, but how does this compare to the profits this work produces, and who receives this money? You're paid well, but you're still exploited. This is a fairly common example. A more complex one, because the labor is right there in front you, the salaries are widely reported on and the profits for the organizations are also public, is professional sports. There's many, many examples of this in sports, just like other media– the Howard Stern contract renewal lawsuit, for example, was widely reported as just even though he should've won on the elements because "he has enough money", meanwhile, the solvency of SiriusXM lives and dies by how likely he is to choose to remain on the air at the time. Yes, he makes a lot of money, but in the framework capitalists agreed to, he made that money, not an executive who, at best, is a platformer; that's not work, that's management, and it's unproductive, extractive if the activity that the profit can only exist because of is the work of someone else. It's the most hyper-dilated version of how capitalists claim the system should work and that with work comes wealth and there's no exploitation, when media and sports demonstrates the fundamental truth that the highest profiting participants do so extractively.

An example that speaks to the labor perspective of this related to the nature of the transaction between labor and management is the free agency of Shaquille O'Neal, someone I've written about before. He asked to have his salary upon renewal increased to reflect the profile of players he was being marketed as, and Orlando profited from, and as Shaq says, when presented with the number, Orlando bristled and Jerry West said, "I'll see what I can do." Shaq's ability to secure what was, albeit a massive amount of money, essentially an agreement upon what he was worth to the organization and his ability to perform consistently at that profile he was tasked with meeting was an example of this system working. Orlando asked Shaq to stay there and play for the love of the game, and as Shaq himself admits this was a huge reason he was reluctant to go, but the infusion of business was a corrupting influence on the pairing of himself and Penny Hardaway and to remain competitive and not make himself vulnerable to future exploitation by blinking first in negotiation, he was forced to act in his self-interest. He moved to LA, won his rings, but lamented not winning with the team he wanted to win with. He didn't mess up, the organization did, and the players, the sport, and the fans to an extent paid the price in this artificially inflated game of brinksmanship– the organization lost basically nothing in the grander scheme of the measure that matters to the business, it was the corrupting influence but the one that stood to lose the least by ruining a team's goodwill.

In Billions, and just like in Mad Men with the character of Don Draper, Bobby Axelrod is decidedly new money. He is accepted because of this money, but ultimately, when push came to shove, they're both cognizant that the old money will always create a circumstance where they're wealthy now, but they're spiritually, existentially poor– Don remained aware of this and didn't necessarily act out on that basis, he ultimately reconciles that he likes his job with the fact that he doesn't respect the field and does ultimately fold to playing by the rules and returns to McCann to make a commercial. Bobby, on the other hand, acts out by being the even bigger villain, and bristles at the suggestion that Rhoades, who comes from money and power, should wield any authority over someone "self-made" (but as with any time you hear this phrase, this proves less and less true the more you dig– Bobby, as I said, lucked out and profited immensely from framing himself as a 9/11 survivor first and a Wall Street dirtbag second, spinning the blend into some kind of folk hero for the sickest sociopaths finance from elite universities have to offer). It's an example where they're on opposite sides of the law, but fundamentally agree that the conflict between them can be symbolic and peformative if the class war on the poor can continue to entrench the influence and power of old money, and the increased share of the spoils by new money, while all of these parties ultimately allow the poor to fight amongst and cannibalize themselves to try to become part of this elite in some theorhetical future if they simply work hard enough.

“White wasn’t enthusiastic, but she couldn’t see any other option. She approved the deferred prosecution agreement, the first with a large company. In late October 1994 the Department of Justice filed criminal charges against Prudential Securities but then held off on pressing them on the condition that the firm adhere to reforming itself. The Department of Justice made the company put $ 330 million into a fund for the investors, doubling the fund that the SEC had set up the previous year. White said that she and her office made the decision not to indict formally out of fear for what would happen to Prudential’s eighteen thousand employees and to its clients.” Eisinger wrote. The ability of those at the top to argue that depraved, unchecked exploitation needs to be prosecuted to the fullest extent of the law, but then the punishment is that those who have already demonstrated a commitment to breaking the law in the name of fiduciary duty can regulate thesmelves back into compliance or risk, what, another slap on the wrist is the norm in our money culture. In the case with Shaq, the Collective Bargaining Agreement that gave him the leverage to hold a team to the metaphysics of basketball economics is uncommon, but how we're told this works our whole lives, and this demonstrates how much that is thoroughly not the case– if management in that case had their way, the profits would have soared, and compensation would've stayed at less than 10% of what became the norm by the time of this conflict. In sports, the labor is tangible, and the effect on marketing, merchandising, dealmaking, are inextrictable from that labor and who that laborer is, that's partly by athletic CBAs are so powerful– this is how the NFL winds up with player profit sharing while remaining, politically, one of the most conservative sports with the most politically conservative fanbases, players, and owners.

"That's how this is supposed to work" Shaq said about Jerry West's response; when managers and owners and other stakeholders are forced to respect labor, as Shaq referred to himself in the rest of this discussion, the outcomes can become far more equitible and far more just, and the smokescreen of the numbers, the ability of those in the power structure to shock the public into taking a side between themselves and a guy demanding $150 million dollars as if the profit and organizational bank isn't an entire order of magnitude larger and thus not at all contextually the same discussion the public is being asked to infer is happening, is suddenly weakened, and labor, the average person too, can benefit.

The connective fiber between Shaq and how our society litigates at that level of financial crime is that absent a consciousness of how systems of economic exploitation, and that extractive behavior scales almost infinitely, you could come away thinking these things don't operate using the same rules, and they do, but mostly just for those on the top side of that structure, owners, statesmen, prosecutors, whomever. That this system of economics in private corporate estates and further empowering of these corporatists to act as autocrats in public suggests there are few, if any, allies of, and even fewer means to affect change by, the average citizen, and the only way to move forward is to find an enforceable way to bring those who would extract maximally, opportunistically, and predatorialy to heel. This can be a legalism like organizing a workplace, it can be an organizing of a competing (not parallel, coexisting) authority, it can even be non-compliance in smaller ways, but it cannot be simply seeking to be the extractive, predatory influence yourself, this is what Bobby Axelrod represents, and the idea that massive corporate franchises like a basketball team or a hedge fund can be imbued with a soul by the Supreme Court or that its culture is somehow a living breathing expression of the people who work there only serves the interests of that interplay of old and new rich against the perpetually poor and languishing.

Essentially, with a political-economic system no longer bothering with the pretense (and it was always a pretense) of a free market, and those who benefitted from that pretense at the public's expense can effectively, and often successfully, demonize an objective example of how they claim this system would reward workers, and get the public to cheer it on, is the end result of these tendencies. Can you reform this? In theory, sure, if society and our economics operated as labelled on the box, but with only evidence that it isn't as described, there's likewise no evidence that anything but redefinition of terms, a restructuring of the system and who holds power where, would stick. Cheering on exploitation, relishing the failures of those who are more like you than you are like the winners of these exchanges, participating minimally in what has openly and explicity become performance from what has always explicitly existed as if any power is being wielded, this is what they want from an American working class. In a world where, as Eisinger writes, "[p]rosecutors and regulators were crippled by the idea that the government could not criminally sanction some companies—particularly giant banks—for fear that they would collapse, causing serious problems for financial markets or the economy", is there really any doubt about what the underlying criminality is being enabled and empowered by?

Put more simply, a more quotidian and single expression of this same dynamic, if the rules of capitalism were as advertised, and Shaq should have played for the love of the game, and capitalism rewards efficiency and good results, Orlando would've paid, the team would've stayed together, and the game would have flourished as all involved, even management, admit would've been the case. However, because someone who was not a profit-center would have to spend (not even lose) money to continue to produce a superior product from which they would (again, still) profit, and that this was depicted as reasonable and the more just outcome, should demonstrate the issue was not with the rule, but to whom a flattening of public understandings of the true nature of our economics was meant to benefit. Who benefitted in any meaningful way, using the supposed metaphysics of capitalism, was not consumers who were supposed to benefit from streamlined budgets and lowered production costs, and it wasn't the players upon whom the profit relies entirely; yes, they got paid, but to deliver based on an artificial handicap to their ability while being told they cost too much by those who produce nothing.