Wall Street: Money Never Sleeps
A film directed by: Oliver Stone
Recently I saw Oliver Stone’s new film Wall Street: Money Never Sleeps which is a sequel to his 1987 film Wall Street. The film was mediocre, at best. However, the real story behind the film is a lot more interesting than the movie.
In Stone’s original Wall Street he at least included a story of union airline workers who were loosing their jobs because of Wall Street’s policies. That movie imagined the impossible dream that corporate officers would actually rescue workers. Ralph Nader also wrote about this dream in his book, Only the Rich Can Save US.
Oliver Stone got the idea for the original Wall Street from Ivan Boesky who made the statement in 1986 that “Greed is healthy.” Stone’s character Gordon Gekko made the famous statement in this film that “Greed is good.” Ivan Boesky spent two years in prison for insider trading. His sentence would have been longer if Boesky had not cooperated with the Securities and Exchange Commission. Boesky gave the SEC the information that needed to indict Drexel Burnham Lambert executive Michael Milken on 98 counts of racketeering charges.
In Stone’s new Wall Street film Gordon Gekko is released from prison, writes a book, and gives lectures where he ridicules the practices of Wall Street. In a speech that Gekko gives early in the movie he says that while he once said that “Greed is good,” now he argues that “Greed is legal.” He argued that because of Wall Street excess, young people have no future and that the people in charge of Wall Street are “Crazy.” This last comment might make someone conclude that the economic crisis we face might be resolved if Wall Street power brokers visited the psychiatrist’s office.
A central problem with both of Stone’s films are that he gives the impression that as bad as the system is, the problems of capitalism can be resolved by individuals working within the stock market. An example of this approach is that one of the main characters in Wall Street: Money Never Sleeps is obsessed with raising money for fusion power. He feels that this obsession will benefit humanity because it would be an alternative energy source.
The facts are that capitalists only invest money in order to generate profits. Any investments in fusion power are only made because there is an expectation that enormous profits would, one day, be generated by this energy source. The idea of making substantial investments merely to benefit humanity, without any thought of profits, is inconceivable to investment companies.
The Real Story
The real story behind this movie, for me, is much more interesting as well as relevant to the world we live in. We can begin this story with the banker Anthony Joseph Drexel who lived from 1826 through 1893. Drexel was the mentor and partner to J. Pierpont Morgan. Their bank is now JP Morgan-Chase which is one of the largest in the world. Drexel also ran an investment company which became Drexel Brunham Lambert. For these reasons Drexel became known as “The man who made Wall Street.”
Anthony Drexel also used three million dollars of his own money to create Drexel University, a school which specializes in engineering. Philadelphia, Pennsylvania in Drexel’s day was a manufacturing center and Anthony Drexel created the school so there would be skilled engineers to run the factories he profited from.
In the tribute to Anthony Drexel from Drexel University there is no mention of the conditions workers faced in order to generate the millions of dollars Anthony Drexel used during his life. Mother Jones spoke of these conditions during a textile workers strike in 1903 where 100,000 workers went on strike. About sixteen thousand of those workers were children, many were twelve years old or younger. They demanded a reduction of the workweek from sixty-five hours to fifty-five hours, even if this meant a cut in pay.
Mother Jones led a march of 400 of these child workers to the summer home of Theodore Roosevelt in Long Island about 120 miles from Philadelphia. Mother Jones observed that many of these children had hands or fingers missing from working in the mills. This is what Mother Jones had to say on this march about the conditions child laborers faced:
“In Georgia where children work day and night in the cotton mills they have just passed a bill to protect song-birds. What about the little children from whom all the song is gone?”
Although Anthony Drexel passed away before this strike, the conditions these workers experienced were the same conditions Drexel profited from.
Now we can skip forward to the 1980’s. This was the time when Michael Milken and Ivan Boesky were gouging out enormous profits from high yield, high risk investments known as “Junk Bonds.” These investments looked so good that Milken at one time Milken raised one billion dollars of capitol in a single day. Then he was indicted on 98 counts of racketeering and would eventually spend twenty-two months in a federal penitentiary. Drexel, Burnham, Lambert went bankrupt and its $350 billion in assets vanished.
To the logical mind, these practices might be seen as reprehensible. However, this is not the case in the capitalist system. In fact a new investment strategy called “derivatives” and later “Credit Default Swaps” were not only legal but laws were adopted so that these so-called investments could not be regulated by the government. In other words, while Boesky and Milken went to jail for violating government regulations, hundreds of trillions of dollars of derivatives were sold without any government regulation. In fact the inventors of these derivatives were given Nobel Prizes. Believe it or not, this is a true story.
Derivatives are a complicated bet on the market that few people understand. When working people go to a casino and loose money, we don’t expect that we will be reimbursed for our losses. However, when investment companies loose money on derivatives and other investments, they demand that the government bail them out, in a hurry.
This brings us to the Drexel University Medical School’s graduating class of 2008. Who did Drexel’s administration invite to be the keynote speaker at this gathering? The same Michael Milken who spent 22 months in the federal penitentiary and helped to drive Anthony Drexel’s bank into the ground. Hello! Some medical students from this graduating class protested the fact that Milken would be giving the keynote address. However, as we know, money talks.
You see, when Michael Milken walked out of prison he had about one-billion dollars in his portfolio. Since that time Milken has increased his assets to over two-billion dollars. His new scheme is an old one, but very lucrative. Now Milken is involved in charitable trust funds. People who have vast amounts of money can invest in charitable trust funds and avoid paying vast amounts of money in taxes. All they have to do is give a small percentage of their money to a charity and they can even pay themselves a salary for managing their money. One of Milken’s favorite charities is medical research.
Cuba had a completely different approach to dealing with their economic crisis. They had a political revolution. Corporations did not like the revolutionary Cuban government so they refused to cooperate with it. Cuba then used its political power to nationalize about $800 million in assets owned by US corporations.
Today Cuba has more doctors and teachers per capita than any other nation in the world. For me, this appears to be a logical way of dealing with Wall Street and the economic crisis they have created.
 Mother Jones Speaks, Edited by Philip S. Foner, P. 102