Before one tritely dismisses the term Casino Capitalism, one should read the book by that title by Susan Strange. Furthermore, the analogy between a casino, where the odds are stacked against most players; and the capitalist world is apt. For example, much of the crisis of the moment began with powerful men betting with our futures. William Cohan (2010) largely attributes the fall of Bear Stearns and its disastrous results for the rest of us to a lack of supervision of greedy folks at Bear Stearns and the misleading of their investors. In the months following the 9/11 disaster, CEO Cayne and his senior management team, including Alan Greenberg, Warren Spector and Alan Schwartz unwittingly sowed the seeds of the firm's destruction by betting heavily on the manufacture and the sale of mortgage-backed securities. “Casino Capitalism” at its worst. Initially this resulted in big profits quickly and led to massive paychecks and bonuses. It seemed at the time that they had come through the 9/11 jitters okay. However, when the shenanigans at Bear Stearns became public with the arrests of misbehaving traders there, public confidence in the company waned and it collapsed (Cox 2008).
One aspect of Casino Capitalism is that there are powerful individuals within the stacked political economy that have undue knowledge and power at the betting table. They can bet and take great risks because they have lots of chips with which to begin the game. Take, for example, Charles and David Koch. Their privately held company revenues last year were estimated at $100 billion (Fenn 2011). Forbes estimates the Koch brothers, as of August 2011, have a fortune of $25 billion each, making them the fourth richest Americans. Buoyed by aggressive speculative trading on volatile energy markets, the Koch brothers accumulated $15 billion in wealth since March 2010, a 43 percent increase (ThinkProgress 2011).
Tell me this isn’t Casino Capitalism!
Cohan, William. 2010. House of Cards: A Tale of Hubris and Wretched Excess on Wall Street. New York: Anchor.
Cox, Christopher. 2008 (March 20). Chairman Cox letter to Basel Committee in support of new guidance on liquidity management.
Strange, Susan. 1986. Casino Capitalism. Oxford: Blackwell.
ThinkProgress. 2011. Forbes: Koch brothers now worth $50 billion.