by Paul B Farrell, JD, PhD
"Metaphors speak volumes: And “The Happy Conspiracy ” is a perfect metaphor for a historic shift in our worldview. Jack Bogle used the phrase “Happy Conspiracy” first in a speech before the NY Securities Analysts Society back in 1999, and later in his 2005 best-seller, "The Battle for the Soul of Capitalism." The “Happy Conspiracy” captures America’s culture today, all the powerful yet subtle connections between Wall Street, Washington, Corporate America and the global shadow banking system that’s controlling America’s mind, your money and global markets. More important, “Happy Conspiracy” shines a spot-light on the neurosciences that have become this conspiracy’s “weapon of mass manipulation” in dominating capitalism.
Make no mistake about it, the “Happy Conspiracy” is at war with Main Street America—and Wall Street is at the head of the “Joint Chiefs” running the “Central Command” in this war. This is not a conventional “war.” It is a clandestine war, a military-style psychological operations, a “psy-ops” or “psych-ops” war. The mission is simple: The “Happy Conspiracy” is waging battle on multiple fronts. Their goal: Totally dominate, manipulate and control the minds and money of not just America’s 95 million investors, but all 310 million citizens, all consumers, all voters and all taxpayers, using a sophisticated arsenal of weapons from behavioral economics, behavioral finance, neuroeconomics, investment psychology, neuro-marketing and the new science of irrationality. Warning, Wall Street’s ”Happy Conspiracy” is brainwashing you all day, every day.
On the surface they walk among you as equals, smiling, cordial, ostensibly helpful, the conspiracy’s insiders. But at the level of the mind and the brain, they move in the shadows. You can never let your guard down, never trust. Their behavior is deceptive, loaded with conflicts of interest, self-serving, they are driven by greed. They will sabotage your retirement—they are, in fact, winning that war. You may be able to turn the tables on them, but you can never really trust them. Rather, you need to know how your enemy’s mind works, their specific mission and tactics, their arsenal of weapons, operating principles, and your best strategies—you must know all this if you want any chance to win in what can only be described as asymmetrical psych-ops counter-insurgency warfare, where you face enormous odds against a dangerous, heavily-armed predator.
Borrowing a line from Churchill, you could easily say that the “Happy Conspiracy” is a “riddle inside a mystery wrapped in an enigma.” Wall Street and its vast network of special interest allies is so complex and so subtly hidden deep in many layers of secrecy, influencing so much of our daily lives … that the world of metaphor often seems to be the only way to describe “reality!” So let me explain the evolution to the perfect metaphor—The Happy Conspiracy—because with each step along the way, with each new metaphor, new insights were revealed about an amazingly complex and fascinating secret world.
Metaphors from Nassim Nicholas Taleb to Joseph Campbell: Metaphors help us “see” into the daily operations and inner workings of Wall Street’s “brain.” Metaphors are the writer’s version of microscopes, telescopes and infrared night-vision laser scopes helping us “look” deep into this mysterious world, by using simple story-telling language and insights, much as Joseph Campbell spoke of myth as metaphor in The Hero of a Thousand Faces: “The myths never tire of illustrating the point that conflict in the created world is not what it seems … Herein lies the basic paradox of myth: the paradox of the dual focus. From the perspective of the source, the world is a majestic harmony of forms pouring into being, exploding, and dissolving. But what the swiftly passing creatures experience is a terrible cacophony of battle cries and pain.”
Similarly, metaphors help us see the strained “harmony” as well as the noisy battles ongoing between Wall Street and Main Street American investors, a point of view echoed by Nassim Nicholas Taleb, hedge fund manager, options trader, math professor, epistomologist and author of two of Wall Street’s bestsellers, The Black Swan and Fooled by Randomness: “Myths, particularly well-aged ones can be far more potent (and provide us with more experience) than plain reality.” And as we discovered, Wall Street offers a delightful treasure-trove of ever-changing myths and metaphors, morphing from one-to-another like “shape-shifters” in an episode of Star Trek!
The mysterious world of money—in myth and metaphor: Years working in television and film left their imprint. During the past decade I’ve often reached into history and myth, television and film, fairytales, music and art to find metaphors that expose simple snapshots of the complex world of Wall Street, the financial markets and behavioral finance. Through those lens, the average Main Street investors better saw the faces of their enemies, the enemy lurking behind their masks, the battlefields, and the alternatives available. Here are some metaphors we’ve used to capture this elusive phenomenon over the years:
• Tortoise & Hare fairytale to compare short-term vs long-term investing.
• Biblical stories: Noah’s Ark helped us examine exchange-traded funds.
• Dilbert, a cartoon character—to highlight the high costs of trading.
• Steeler’s Wheel hit song—’clowns to the left, jokers right,’ fit Fed & Treasury.
• The Gambler, this movie is a perfect metaphor for online trading addiction.
• Halloween’s witches show us that fund statistics mislead investors.
• Ancient Buddhism wisdom offered insight into modern online investing.
• StarTrek sci-fi television episode focused us on world population forecasts.
• Broadway plays: Pinter’s Nobel Prize exposing how we spend money.
• Men are from Mars, Women from Venus, psyching traders vs buy’n’hold.
All writers use metaphors. Nothing new there. Metaphors capture the reader’s attention, excite interest, shed new light. They also open minds to more familiar ways of peering into a segment of the world that might otherwise be overly complex, uninteresting, boring and shrouded in mystery. And for the writer, metaphors definitely keep the mind fresh, fill your days with incredible journeys, and make the art of writing more fun.
Evolution of Wall Street metaphors in recent years: That said, the financial world is so mysterious and changing so rapidly it more often than not defies description, even with metaphors. In recent years Wall Street has become far more than stock market trading and initial public offerings. Wall Street is a network of computer links, a spider web, octopus tentacles, Medusa’s mythic head of snakes, a federation of widely-diverse and loosely-connected organizations and wealthy power-players with some common and some antagonistic interests, many of which are obvious taken separately, but most of which are secretly hidden in the shadows, especially in their connections. Yet, overall the Wall Street network clearly seems motivated by a common goal—getting control of, power over and money from, America’s 94 million individual investors.
Since leaving Morgan Stanley and Wall Street some time ago, I’ve played with several different metaphors in describing Wall Street, hoping to get my hands around what’s happening to this strange mythic beast as it changes identities like an alien shape-shifter, merging with new entities, destroying older. And yet, every time I thought I had my hands around the beast, it moved back into the shadows. For brief periods we were able to capture the heart and soul of Wall Street’s loose alliance of twenty-five diverse organizations linked together by a shared ideology and a common goal—to dominate, manipulate and control you and the rest of America’s 95 million investors—and to do it for their own personal gain. Here are several of the metaphors we’ve used over the years:
• “Investing as an Extreme Sport:” In the late-nineties light-hearted sports metaphors were common in newspapers and on cable television. Market, financial and economic news raced headlong through the day—more entertainment than news. All day, we were fans cheering a red-hot bull market where 30% returns were common and everyone came up a winner. In that exciting arena all you had to do was throw darts to score a hit. But today we’ve moved past the light-hearted sports metaphors used by BusinessWeek and CNBC in describing markets as a perpetual horse race, a big-playoff game, a championship contest. Sports analogies no longer capture the tense drama of today’s financial markets and our highly-polarized world. And yet, sports metaphors continue being interjected into the news.
Why? Because Wall Street pundits want you to continue believing that investing really is just a game that anyone can jump in and play at any time, one you can win if you just play by their rules, a game you should play, so that you don’t miss the thrill of being alive. So they feed you a constant stream of hot data—tickers, stock updates, company press releases, breaking news, anything to stir the adrenaline, make you feel you’re a player in game-of-the-day, even though when the hoopla stops and the smoke clears, the stats are a letdown, inevitable proving that most investors rarely beat inflation after taxes.
• Stock Markets are the new “Gambling Casinos:” Although the “casino” metaphor was revived in 2009, we moved past Jack Bogle’s gambling casinoa couple years ago metaphors when he did. Yet who could forget how often during his fifty year career Bogle would describe the financial industry as “casino croupier skimming one third off the top of the investor’s returns.” And yes, that’s still true. They still do skim that much or more. But unfortunately, what’s really going on today is neither a fair game nor honest sporting contest. Savvy investors know Wall Street controls the playing field, it is never level, the dice are always loaded, the deck is well-marked, the game is fixed—so if you play, you are forced to run a handicap race against impossible odds. Why? Because “they” do still run a casino through hedging, private equity, high frequency trading and other risky “gambling” operations.
Jack Bogle … the ultimate “Conspiracy Theorist:” In the past decade Jack Bogle hardened his rhetoric with an edgier metaphor. Bogle first called the Wall Street cartel a “Happy Conspiracy” in a speech before the New York Society of Security Analysts back in 1999, repeating it several times since, most notably in his 2005 bestseller, The Battle for the Soul of Capitalism. Most so-called “conspiracy theorists” are dismissed with a roll-of-the-eyes. Bogle’s label, however, was powerful yet lighthearted, taking the edge off the usual meaning. Though not central in his message, adding the word “happy” to “conspiracy” gave it a whole new energy, capturing the essence of everything I’d been writing about since 1997 in well over twelve hundred columns.
Bogle’s overall rhetoric became more confrontational in the "Battle for the Soul of Capitalism" where he warns that: “The business and ethical standards of Corporate America, of Investment America, of Mutual fund America have been gravely compromised.” And while conspiracies are not inherently criminal, nor immoral nor unethical, they typically thrive behind a “code of secrecy,” triggering an uneasy feeling that “they must be hiding something,” a sense that this is not the way to play fair in a real democracy or in a truly “free market” economy, and sadly, often, after the fact do reveal hidden illegal activities.
As a result, the mysteries surrounding conspiracies make them a perfect metaphor when putting the pieces together and explaining Wall Street’s cleverly-masked self-serving reality. For example, after interviewing several former SEC attorneys and industry leaders during the abortive 2004 fund reform debates in Congress, we uncovered twenty-five conflicts-of-interest hidden behind a Mafia-like “veil of secrecy,” and used by financial industry insiders to take advantage of and manipulate investors—a code that not only protected the “Happy Conspiracy,” it in many instances was approved by Congress, the SEC, and the White House.
There appears to be no singular dictator controlling the “Happy Conspiracy” from the top, like a mob boss. Rather, Wall Street appears to be the five-star general among the joint chiefs of Wall Street’s Central Command. But in truth, there is no one Godfather, no Don Corleone, no Tony Soprano with a hierarchical organization of under-bosses, capos and consigliories. Rather we see a loose federation of thirty or so allies, a “coalition of the willing,” if you will, all united with the same goal: To get as rich as possible as fast as possible by taking maximum advantage of the millions of naïve, uninformed and irrational investors in America.
“Shadow Governments” of, by, and for The Rich, Greedy & Powerful: Conspiracy theorists use various names to describe shadow governments. For example, a cryptocracy is a “type of government where the real leaders are hidden. There may possibly be a fake government that appears to be in charge and this fake government might not even know themselves that they’re not in charge,” like Washington’s elected politicians, where the real power strings are pulled by power-players on Wall Street, in Corporate America or the Forbes 400.
More often in a cryptocracy, the politicians may actually be fully aware they are mere puppets, yet play the game anyway, enjoying many financial perks and social status, while special interest lobbyists and large campaign donors pass along instructions to the politicians regarding the next moves expected. Wikipedia note that “a cabal is a number of persons united in some close design, usually to promote their private views and interests in a church, state, or other community by intrigue.” In addition, historian and former Nixon strategist, Kevin Philips, author of "Wealth and Democracy" and "The Politics of the Rich & the Poor," described America as a plutocracy, where government is controlled by the rich. An oligarchy is quite similar: A “form of government where the power rests with a small elite segment of society” where control may come from wealth, family or military power.
There are more similarities than differences here between a plutocracy, cabal, cryptocracy, oligarchy and conspiracy. In a Paranoia magazine article, for example, conspiracy theorist Nick Sandberg offered this hard-hitting profile of the power held by America’s financial institutions: “There exists an ‘elite cabal’ at the apex of banking and industry, operating governments and the media and controlling our political, social and personal lives to ever-increasing degrees.” Many would say, “yes, that’s a perfect description of Wall Street.”
Billionaires bankroll politicians, as metaphor becomes reality: And in fact, thanks to such media features as the Forbes 400 Richest People in America, we are seeing a greater concentration of political power in the hands of the wealthiest few today, a reality that will get even more pronounced as presidential primaries are starting much earlier, forcing candidates to line up backing from the high-rollers looking to buy support for their special interests. Add to that the fact that Wall Street firms are the top donors in political campaigns, and that lobbyists outnumber elected officials by a huge margin, you can bet there are many implied quid pro quo promises made in advance to these high-rollers, to get enough money to run campaigns are approaching one billion in total cost. And since this picture is a bit too dark and sinister, we’ll leave the plot lines to the film and television industry, to directors like Oliver Stone who’s already given us a hint in his portrayal of Wall Street and the upcoming sequel.
“Investing on the Planet of the Apes”—futuristic metaphor? For a couple years, “Investing of the Planet of the Apes” was my favorite metaphor for life on Wall Street. Readers got the gist of the satire, seeing how easily Wall Street resembles a jungle culture driven by primitive greed. However, in that metaphor, on that imaginary “Planet of the Apes,” the Happy Conspiracy’s war to dominate Main Street was over. The Apes and their cohorts, the Gorillas, Orangutans and Chimps, had already won that war and were in control. They dominated Main Street’s humanoids, and civilization had reverted back to an earlier primitive state.
There were many Planet of the Apes stories filling sci-fi novels, television series and films a few decades ago. And today The Planet still makes for a fascinating metaphor, except for one thing, it is a futuristic scenario. Then suddenly it struck me—we’re not there yet, our war rages on today, even escalating! Yes, it is true, Wall Street’s armies are getting stronger and more sophisticated in manipulating Main Street, thanks to their growing arsenal of behavioral finance weaponry. Still, their may be some hope left for “humanoids.” But to win, you must stop playing Wall Street’s game by their “jungle” rules, because the Apes do control that planet. To win you must play a new game, by new rules, your rules.
War metaphors: “WWIII” and a “War of Civilizations:” Yes, war. War is a popular and quite common metaphor in today’s highly polarized America. We’ve heard endless political rhetoric about the “war on terror,” the “war on drugs,” the “war against the middle class,” Iraq’s “civil war.” Some even believe we’re already fighting “World War III,” a global “War of Civilizations,” the final war between good and evil prophesized in the Book of Revelations. So in the final analysis, ”war” is a perfect metaphorical context to describe Wall Street’s vast network and its widespread efforts to control the minds of America’s 95 million investors and more. The stakes are enormous. With more than $20 trillion in stocks, bonds, funds and other investable assets at stake, and hundreds of trillions in global derivatives, it’s easy to see why we should call this a war—every additional 1% fee the Wall Street can skim off the top of that $20 trillion means another $200 billion in Wall Street’s collective pockets.
“Psy-Ops Warfare”—A Dark, Dangerous Metaphor: But the fascinating part of the new war metaphor is that this is way beyond traditional warfare. Yes, war metaphors are still quite helpful in describing the tensions between Wall Street and Main Street, between the Happy Conspiracy and the rest of the world. But this is a new kind of war, new conflict, new reality. Today we’re in a “Big Brother 1984″ Orwellian world: Our enemies come with many disguises—brokers and advisers, insurance salesmen and lobbyists, lenders and regulators, 401(k) managers and regulators, magazine ads and cable television anchors. They come at us with engaging, deceptive smiles and smooth-talking, convincing sales pitches about looking out for our best interests, while underneath all their happy-talk, they are at war with us and on the attack. Armed with the slick new secretive weaponry of behavioral finance and neuroeconomics, the Happy Conspiracy is aggressively waging a psychological war against you and the rest of America’s 95 million investors, a war to control your mind and your money. And they will settle for nothing less than total victory. Your choice is very simple, you surrender and play by their rules. Or you fight back on your own terms.
Out there on “The Street,” the “psych-ops war” metaphor fits better than casino gambling, sports, a jungle run by primates, or those darker conspiracy theories, although all these metaphors will continue sneaking onto our pages from time-to-time, as a true mixed-metaphor manual. The psych-ops metaphor fits best here because “they” are on the attack: Not in hand-to-hand combat with M-16s, rocket launchers and grenades, or even with high-tech cruise missiles, fighter jets and weapons of mass destruction. Rather, there’s little doubt now that the “Happy Conspiracy” is engaged in a clever, clandestine and multi-front psychological operations war—a war to dominate the minds, the souls and the wallets of America’s Main Street investors.
‘Investment Madness’ & ‘Irrational Exuberance’ to ‘Happy Conspiracy:’ Suddenly, when the house of cards began to implode in mid-2007, beginning with the subprime housing and credit meltdown, as Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke went from “contained” to “contagion,” it struck me that for years I had indeed been writing about all the pieces of this profound, widespread and fundamental paradigm shift in the financial world, a coup by Wall Street and its allies in this not-so-secret conspiracy out to control America’s mind, your money, and global markets:
First. Neuroscience Bastardization: The new sciences of behavioral finance, neuroeconomics, investment psychology, and the “science of irrationality,” all of which had previously been touted as tools to help individual investors, as well as the American consumers and voters—were no longer being used to help but were now being used against us, to manipulate, dominate and control us as investors, consumers and citizens.
Second. Greed Consuming Trusted Leaders. Moreover, it became painfully obvious that a clandestine conglomeration, federation and conspiracy of the very organizations entrusted to act in our behalf were now using these powerful tools against us—Wall Street banks and brokerages, fund companies, mortgage lenders, regulators, pension advisors, advertisers, security analysts, corporate retirement planners, the list seemed endless. they were all taking advantage of our irrational behavior whenever possible, to make a buck off our vulnerabilities, thanks to their “owning” the best talent and the most powerful tools being developed in these new neurosciences.
And as the meltdown accelerated a few years ago, at one point it hit me that the financial world, and indeed the American culture, was experiencing a watershed moment—a paradigm shift—and that what I had been writing about for years was significantly altering the way America “sees” the new sciences of neuroeconomics and behavioral finance, while also exposing the way these esoteric sciences are now being used against us—to control and manipulate us. That point was confirmed by one of America’s leading behavioral finance experts, Professor John Nofsinger, author of Investment Madness and several textbooks in behavioral finance. Nosfinger told me the market was “ripe for another Irrational Exuberance” like this new blog. Then suddenly something clicked, a reminder that “irrational exuberance,” a 1996 comment by Fed Chairman Greenspan, became a perfect title for Shiller’s book about the manic, insane, totally irrational 1990’s stock market!
That was it! Suddenly Bogle’s offhand remark about a “Happy Conspiracy” became the perfect metaphor here, reflecting not only the forces linking Wall Street to its business, professional and institutional allies, but it also fit for all their cohorts and co-conspirators throughout the politic arena, the advertising world, academia, television and the media—because they are all tied together by one common goal, the need to control the America’s mind using the new neurosciences as the ultimate weapon, and yes, they all fit neatly together under this one umbrella, all part of a “Happy Conspiracy” fighting endless battles in this “Warzone” to control America’s mind, Main Street’s money and global financial markets."