DownWithTyranny!: The Masters Of The Universe Have A Frat-- Meet Kappa Beta Phi

Yesterday, as the Oklahoma suburbs continue to be plagued with a series of earthquakes, we wondered aloud whether even Republicans would string up the Koch brothers if the reddest state of all were to disappear into a vast, fracted sink hole. I asked if Republicans would because I already know that normal people would. In 2012, only 33% of voters chose to reelect President Obama in that state. The rest voted to be fracked, poisoned, ripped off, exploited and see their children sold into slavery. The MSNBC video above shows the 1% at play, the folks who run the show and who have been empowered-- primarily self-empowered because the rest of us are… well sort of like the Oklahomans who voted to have their homes destroyed in a grand fracking episode.

These Wall Street guys are not the makers and not the smartest guys in the country-- just the greediest, most selfish and most determined… sort of like the criminal sociopaths who built the castles in the Dark Ages. Castles were primarily built to oppress and enslave the peasants-- just like the great accumulation of lucre on Wall Street. Below Chris Hayes interviews-- also last night-- Kevin Roose, author of Young Money, who had just exposed the very secretive Wall Street fraternity Kappa Beta Phi for New York Magazine. He describes a very closed dinner he managed to sneak into with "many of the most famous investors in the world, including executives from nearly every too-big-to-fail bank, private equity megafirm, and major hedge fund. AIG CEO Bob Benmosche was there, as were Wall Street superlawyer Marty Lipton and Alan “Ace” Greenberg, the former chairman of Bear Stearns. And those were just the returning members. Among the neophytes were hedge fund billionaire and major Obama donor Marc Lasry and Joe Reece, a high-ranking dealmaker at Credit Suisse. [To see the full Kappa Beta Phi member list, click here.] All told, enough wealth and power was concentrated in the St. Regis that night that if you had dropped a bomb on the roof, global finance as we know it might have ceased to exist."

The country and the world, of course, would be a much better place if such a bomb did go off. And political power in our country would have to be recalculated. These masters of the universe own one party outright and control more and more of the other.

I’d heard whisperings about the existence of Kappa Beta Phi, whose members included both incredibly successful financiers (New York City's Mayor Michael Bloomberg, former Goldman Sachs chairman John Whitehead, hedge-fund billionaire Paul Tudor Jones) and incredibly unsuccessful ones (Lehman Brothers CEO Dick Fuld, Bear Stearns CEO Jimmy Cayne, former New Jersey governor and MF Global flameout Jon Corzine). It was a secret fraternity, founded at the beginning of the Great Depression, that functioned as a sort of one-percenter’s Friars Club. Each year, the group’s dinner features comedy skits, musical acts in drag, and off-color jokes, and its group’s privacy mantra is “What happens at the St. Regis stays at the St. Regis.” For eight decades, it worked. No outsider in living memory had witnessed the entire proceedings firsthand.

I wanted to break the streak for several reasons. As part of my research for my book, Young Money, I’d been investigating the lives of young Wall Street bankers – the 22-year-olds toiling at the bottom of the financial sector’s food chain. I knew what made those people tick. But in my career as a financial journalist, one question that proved stubbornly elusive was what happened to Wall Streeters as they climbed the ladder to adulthood. Whenever I’d interviewed CEOs and chairmen at big Wall Street firms, they were always too guarded, too on-message and wrapped in media-relations armor to reveal anything interesting about the psychology of the ultra-wealthy. But if I could somehow see these barons in their natural environment, with their defenses down, I might be able to understand the world my young subjects were stepping into.

So when I learned when and where Kappa Beta Phi’s annual dinner was being held, I knew I needed to try to go.

Getting in was shockingly easy-- a brisk walk past the sign-in desk, and I was inside cocktail hour. Immediately, I saw faces I recognized from the papers. I picked up an event program and saw that there were other boldface names on the Kappa Beta Phi membership roll-- among them, then-Citigroup CEO Vikram Pandit, BlackRock CEO Larry Fink, Home Depot billionaire Ken Langone, Morgan Stanley bigwig Greg Fleming, and JPMorgan Chase vice chairman Jimmy Lee. Any way you count, this was one of the most powerful groups of business executives in the world. (Since I was a good 20 years younger than any other attendee, I suspect that anyone taking note of my presence assumed I was a waiter.)

When he was finally caught and kicked out of the event, two of the banksters took him to the hotel lobby and "reassured me that what I’d just seen wasn’t really a group of wealthy and powerful financiers making homophobic jokes, making light of the financial crisis, and bragging about their business conquests at Main Street’s expense. No, it was just a group of friends who came together to roast each other in a benign and self-deprecating manner. Nothing to see here.

But the extent of their worry wasn’t made clear until Ross offered himself up as a source for future stories in exchange for my cooperation.

“I’ll pick up the phone anytime, get you any help you need,” he said.

“Yeah, the people in this group could be very helpful,” Lebenthal chimed in. “If you could just keep their privacy in mind.”

I wasn’t going to be bribed off my story, but I understood their panic. Here, after all, was a group that included many of the executives whose firms had collectively wrecked the global economy in 2008 and 2009. And they were laughing off the entire disaster in private, as if it were a long-forgotten lark. (Or worse, sing about it-- one of the last skits of the night was a self-congratulatory parody of ABBA’s “Dancing Queen,” called “Bailout King.”) These were activities that amounted to a gigantic middle finger to Main Street and that, if made public, could end careers and damage very public reputations.

After several more minutes spent trying to do damage control, Ross and Lebenthal escorted me out of the St. Regis.

As I walked through the streets of midtown in my ill-fitting tuxedo, I thought about the implications of what I’d just seen.

The first and most obvious conclusion was that the upper ranks of finance are composed of people who have completely divorced themselves from reality. No self-aware and socially conscious Wall Street executive would have agreed to be part of a group whose tacit mission is to make light of the financial sector’s foibles. Not when those foibles had resulted in real harm to millions of people in the form of foreclosures, wrecked 401(k)s, and a devastating unemployment crisis.

The second thing I realized was that Kappa Beta Phi was, in large part, a fear-based organization. Here were executives who had strong ideas about politics, society, and the work of their colleagues, but who would never have the courage to voice those opinions in a public setting. Their cowardice had reduced them to sniping at their perceived enemies in the form of satirical songs and sketches, among only those people who had been handpicked to share their view of the world. And the idea of a reporter making those views public had caused them to throw a mass temper tantrum.

The last thought I had, and the saddest, was that many of these self-righteous Kappa Beta Phi members had surely been first-year bankers once. And in the 20, 30, or 40 years since, something fundamental about them had changed. Their pursuit of money and power had removed them from the larger world to the sad extent that, now, in the primes of their careers, the only people with whom they could be truly themselves were a handful of other prominent financiers.

Perhaps, I realized, this social isolation is why despite extraordinary evidence to the contrary, one-percenters like Ross keep saying how badly persecuted they are. When you’re a member of the fraternity of money, it can be hard to see past the foie gras to the real world.

And the people who run Goldman are just blood-sucking vampire squids, we promise! Greg Mankiw is right that these individuals hold enormous power over our economic destiny. But there can be no doubt that their compensation is, at best, incomprehensible-- at worst, a crime of unfathomable social magnitude. This shouldn’t be surprising, given that at the high end of the financial sector, the vampire squids more or less set each other’s pay.

As for this alleged “talent,” it’s increasingly hard to see it when one looks out at the US’s crumbling infrastructure, low levels of investment, extreme corporate short-termism, and the recurrence of bubbles, unsustainable booms and spectacular crashes that characterize recent financial history.

Unless, of course, Mr. Mankiw was referring to a very specific kind of “talent”: rent-extraction. And as we’ll see, when it comes to this particular talent, our financial elite has few parallels in economic history.

This gets better. Read the whole post here.

"If Martin Scorsese, Roose told Hayes' viewers last night, "had gotten this for the Wolf Of Wall Street he would have thrown it at as over the top, too unbelievable."

Vermont Independent Bernie Sanders is one of the few senators not owned by the boys from Kappa Beta Phi. In fact, his world and his preoccupations are vastly different from theirs. That's why Bernie Sanders is the model of what a U.S. Senator should be. Bernie, this morning:

Increasing wealth and income inequality in the United States is the great moral and economic issue of our time. It speaks to whether we will be a nation with a vibrant and growing middle class, or an oligarchic form of society in which a handful of incredibly wealthy families control our economic and political life.

  In America today, the top 1% owns 38% of our country's financial wealth. The bottom 60% owns all of 2.3%. In the last several years, 95% of all new income has gone to the top 1%. Sadly, we recently learned that in 2012 the top 40 hedge fund managers in the country earned $16.7 billion dollars, as much as 300,000 public school teachers combined-- almost a third of all high school teachers in America. How's that for national priorities!

  In recent months, world leaders from the president to the pope have been speaking out on this long ignored, but critical issue. Several months ago a number of us in the Senate and House urged President Obama to issue an executive order to raise the minimum wage for federal contract workers from $7.25 to $10.10 an hour. Recently, the president did just that. I applaud him for taking this important step forward. But much more needs to be done.

  Within the next several weeks Democrats in the Senate will be bringing forth legislation to raise the national minimum wage from $7.25 to $10.10 an hour. If this effort succeeds, 30 million Americans will be getting a long overdue pay raise. And, just last week, House Democrats indicated that they are preparing to undertake what is known as a discharge petition which would force a vote on the minimum wage in the Republican controlled House of Representatives.  

Momentum is on our side. Now is the time for Congress to act!

Currently, powerful forces in the Republican Party, under the influence of the Koch brothers and other billionaire families, continue to call for major cuts in programs desperately needed by working families. While the rich become richer and the poor become poorer, these billionaires are waging a relentless fight to cut nutrition programs, education, health care and more.

  Incredibly, instead of supporting an increase in the federal minimum wage of $7.25 an hour, they want to end the concept of the minimum wage-- and create a situation where workers in high-unemployment areas could be forced to work for $3 or $4 an hour. For them, "freedom" means that desperate people are "free" to work for starvation wages.

Working together, our job is to create an economy and a government that works for working families and the most vulnerable Americans, and not just Wall Street and multi-national corporations. And Congress should begin by raising the minimum wage!