Cerberus | Appendix B: The Cerberus Syndrome

Cerberus is a blog series. To start reading from the beginning, click here.

The Cerberus Syndrome is a mental health disorder triggered by business strategies devised to amass and endlessly increase extreme wealth. When triggered, it prompts Cerberus egos to compromise or destroy the quality of human life and the natural environment for the sole purpose of financial gain.

This appendix shows how the Cerberus Syndrome functions in business affairs and then proposes a multiracial and multicultural initiative to contain, control, and finally end this devastating mental disorder.

Businesses that trigger this mental disorder in its owners and managers have played a major role in tanking the share of wealth held by the American middle class, which has steadily declined since 1995, while the top one percent’s share has steadily increased. The top one percent now holds over $25 trillion in wealth, which exceeds the wealth of the bottom 80 percent (Six Facts About Wealth in the United States, by Isabel V. Sawhill and Christopher Pulliam).

American slavery was a product of the Cerberus Syndrome. So, too, are drug companies, dot.com businesses, insurance companies, investment  banks, and equity firms today that search, ever anew, for ways to jack up profits by slashing wages and gutting employee benefits, destroying or absorbing other businesses, and increasing the price of life-sustaining products simply to make more money. These enterprises and business strategies are not born of conspiracies. Nor are they the fallout from conservatives, moderate, or liberal political policies.  They are created by Cerberus egos, namely, mentalities without compassion or empathy that then act financially like relentless money-making machines.

Drug companies, dot.com businesses, insurance companies, investment  banks, and equity firms today search for ways to jack up profits by slashing wages and gutting employee benefits, destroying or absorbing other businesses, and increasing the price of life-sustaining products simply to make more money.

A simple example makes this mental disorder in business ventures evident. 

The Camorra mafia illegally buried 10 billion tons of toxic garbage in their own region near Naples for billions of dollars in profits (January 29, 2014, The New York Times). When one of the mobsters involved in the dumping operation thought about the carcinogenic effects of the toxic garbage on himself, his family, his community and their future, he complained to his Camorra boss, saying “We’re polluting our own house and our own land. What are we going to drink?”

“You idiot,” the boss replied. “We’ll drink mineral water.”

The dumping continued and the complaining mobster became the compliant thug. Refusal was not an option. His life and the wellbeing of his wife and family would have been at risk now rather than in the future. So a Cerberus ego drank the Kool-Aid, namely, the mineral water as he poisoned the wellsprings of his own life. 

Three factors must be kept in mind when tracking how the Cerberus Syndrome works. 

First, the greed factor. The Cerberus Syndrome is a greed system with blow. Greed functions in the brain like a cocaine hit. Both greed and “blow” (a street name for cocaine) have the same brain stimulus and reward circuitry protocol: “in both cases, dopamine is released into the nucleus accumbens” (Fear, Greed, and Financial Crises: A Cognitive Neurosciences Perspective, October 12, 2011, by Andrew W. Lo, the director of MIT’s Laboratory for Financial Engineering). Greed is thus a highly enjoyable trip until the crash. The threat of financial loss “activates the same fight-or-flight response as a physical attack, releasing adrenaline and cortisol into the bloodstream, resulting in elevated heart rate, blood pressure, and alertness.” This mental disorder, in sum, is an addictive system with blowback. 

Second, the social illness factor. The Cerberus Syndrome produces racist, sexist, homophobic and other discriminatory programs. These social illnesses, however, are symptoms rather than the cause of the underlying mental disorder. So anti-racism, anti-sexism, anti-homophobia, and other social-justice campaigns against social ills attend to the behavioral problems but not their origin. The source of these problems is a brain system protocol for gaining wealth unencumbered by compassion or empathy. This mental disorder varies in expression. It can create gangbangers; CEOs of Fortune 500 firms; Mafiosi; fascists and neo-Nazis; or the administrators of the factories in concentration camps during World War II who gave Jews just enough calories necessary to work themselves to death so that profit for the factories in the camps was not “wasted” on its prison labor force.  

Third, the ego factor. The Cerberus Syndrome creates and also is a creation of Cerberus egos. It works like a feedback loop. You know when a Cerberus ego has entered the room because

• • • A giant ego is now present
    • The strong emotions and passions of this ego fan the flames of conflict 
    • The world constructed around this ego reflects only this ego’s identity and values and blocks the values of all other egos 
    • The only persons allowed to be present are persons who agree with the giant ego
    • The fires of hatred are fueled by this ego as its realpolitik, namely, as strategies of this ego based on practical rather than ideological or moral convictions and considerations
    • The ego manufactures opposition for the sole purpose of attacking opponents 
    • The favorite and frequently the only conversation allowed is about this ego
    • This ego rationalizes its biases against others
    • This ego puts persons in boxes and deals with them accordingly
    • This ego, when challenged, attacks. 

Attacks against Cerberus egos enflame rather than dampen their energy. They torch everything they touch. They never back down. Battles simply empower them rather than take them down. Confronting these egos is like throwing flesh for the kill. They feed on conflict and thrive in warfare. They create carnage without remorse, enslavement without regret, utter destruction without shame, cruelty without guilt, detention centers without feeling empathy, and predatory lust without self-blame. 

These three major factors (greed, negative social impact, and ego hounding) together create the major symptom of the Cerberus Syndrome: an excessive and ceaseless desire for inordinate wealth.  Profit protocols are leveraged like a hound from hell on crack.

Let’s now track an example of the Cerberus Syndrome. Our case study focuses on the $39 billion global private equity firm named, appropriately, Cerberus Capital Management [CCM]. Thanks to the May 1, 2019, New York Times Magazine article How America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery by Jesse Barron on this Cerberus equity firm, we can track the financial strategy this firm used to destroy a company and devastate lives.

Greed, negative social impact, and ego hounding together create the major symptom of the Cerberus Syndrome: an excessive and ceaseless desire for inordinate wealth.

This case study can be easily formulated because The New York Times investigative reporter Jesse Barron could not find CCM’s core financial operating system—its Cerberus Syndrome—that tanks companies and lives for extraordinary financial gain. So he turned to Gusto Schwed—a professor of private equity at New York University who spent 24 years in the industry—to help him out. Barron gave Schwed all the financial data he had gathered. Schwed studied the data and finally broke the code.  The result is Barron’s masterful article on CCM, which shows among other things, how racism became a social ill within a system that infected the wellbeing of everyone and everything it touched. The system torched lives like a hound from hell.

Laid out below are twelve steps CCM took to incinerate Remington, a company earning half a billion dollars a year selling guns when the equity firm bought it in 2007. Twelve years later Remington was dust and ashes, and CCM had made a quarter of a billion bucks. What CCM did is part of the new normal for exceedingly wealthy American private equity firms, namely, the Cerberus Syndrome.

Writes Barron,

When Cerberus bought Remington in 2007, the world was hurtling through the greatest rush of private-equity acquisitions in history. From 2002 to the crash in 2008, hundreds of billions of dollars a year were deployed in private-equity deals by firms like Cerberus, KKR and Blackstone. There were never fewer than 1,700 private-equity transactions annually; in 2007 the figure peaked at 7,400. After the crash briefly interrupted its momentum, the industry came back in force.

Let’s now track what Cerberus did to Remington.

 Step 1

Cerberus sets up a new holding company, a business entity created by Cerberus so that it owns most of the new company’s stock. Let’s call this new holding company Cerberus spawned, Cerberus Jr.

 Step 2

Cerberus Jr. company borrows $225 million—using Remington as its equity—to buy Remington (thus no cash exchanged hands). Remingtonwas simply put on the auction block as the promissory note.

 Step 3

Remington’s new owners, Cerberus Jr., now borrow $225 million in cash from a bank using Remington as collateral to get the money to pay back themselves. Cerberus Jr., in effect, now hocks Remington.

 Step 4

Remington is now $225 million in debt to Cerberus Jr. Remington will be sold like a slave if it can’t pay back Cerberus Jr., its owner, through new forced labor demands.

 Step 5

Remington cuts costs to increase profits in the face of its new debt load.

 Step 6

Remington fires and hires new managers and engineers (mostly whites) to reduce costs Remington hires and fires cheap labor (blacks, poorer whites, and other cheap labor), for the physical labor, and uses tactics to keep union organizers at bay.

 Step 7

Remington gives Cerberus Jr. $225 million in cash to pay off the debt to the company that bought it. 

 Step 8

Cerberus Jr. created by Cerberus now pays Cerberus $225 million with cash in order to buy its own stock from Cerberus.

 Step 9

Cerberus makes a $225 million profit.

 Step 10

Remington files for bankruptcy. If the bank shuts down the company, it will auction off its pieces. Management and employees lose jobs causing economic duress across the community.

 Step 11

Cerberus thrives as a Business/Government Complex. Former U.S. Vice President Dan Quayle becomes Chairman of Cerberus in 1999. 

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 Former Treasury Secretary John W. Snow joins Cerberus in 2006.

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In 2018, Stephen Feinberg, the co-founder and President of Cerberus, becomes a member of Trump’s Intelligence Advisory Board on national security matters.

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Cerberus and the company’s interests are now linked to national security issues.

 Step 12

Cerberus Capital Management flourishes today, as New York Times reporter Barron reminds us, because it’s a wise investment not just for the super-rich, but also for pension fund investors. These investments feed on the equity beast Cerberus that destroys the livelihoods of the pension funds’ own workers. This feeder system is like pups sucking on the teats to a beast that milks them dry. This self-feeding destructive system is the Cerberus Syndrome, which produces more Cerberus egos as a self-perpetuating, self-destructive system.

Here’s a takeaway from our trip down memory lane to Cerberus’s gates to hell. Efforts to create unions for the Remington workers and procure higher wages and more promotion opportunities for workers discriminated against because of their race, gender, or ethnicity—are absolutely necessary. But this social justice work is also paradoxical. The social justice initiatives do not change the Cerberus Syndrome system but strengthens it. The financial destruction of the company would hurt the people at the bottom of the food chain, not those at the very top. So workers and owners have the same goal: keep the exploitive financial system working. The social justice organizers “simply” want it to be a less exploitative system.

It’s now time for us to rack focus. From this wider standpoint, we, the American people, see that it does not matter if Cerberus management is racist, sexist, or a crook. What matters is that we identify the Cerberus Syndrome at Cerberus so that we can restrain its greed, break its chokehold on others, and correct the social circumstances that create this beast. 

When we rack focus, we do not set out to find the True Self of a Cerberus ego caught up in a Cerberus Syndrome. Cerberus egos cannot be transformed into the True Self because they are utterly and thoroughly the hound from hell dead set on protecting its charge without compassion or empathy. A person who is making big bucks by destroying the lives of others has lost access to the capacity for compassion. Our goal is to unite the persons Cerberus devours, namely, the middle and working class workers and the truly disadvantaged who are divided by race, class, ethnic, gender, political loyalties, and lifestyle differences—and tend not to socialize with or like persons different from themselves. In short, we, the American people.

This kind of inclusive American diversity work entails organizing strategies that create small spiritual groups that work together for common goals. These groups do not compete with ongoing social justice and eco-justice work but are a complement to it. They are internal small group programs within organizations to create compassion and empathy and caring within these groups as spiritual practices of the True Self. When disparate organizations link these groups together for common goals, a network of transformational rather than simply transactional groups are created. 

Our goal is to unite the persons Cerberus devours, namely, the middle and working class workers and the truly disadvantaged who are divided by race, class, ethnic, gender, political loyalties, and lifestyle differences

An interview I conducted with Marshall Ganz several years ago highlights the need for such groups to sustain progressive social justice agendas by their leaders. Marshall Ganz— the son of a rabbi, a 16-year veteran organizer and staff member for the United Farm Workers, and now a senior lecturer in public policy at Harvard’s Kennedy School of Government—organized America’s locally based communities for Barack Obama in 2008. More precisely, he created the campaign, trained the troops and then launched a grassroots strategy so successful that even self-defined “rednecks” declared voter loyalty to “the ni**er.”  

Ganz then watched Obama shut down these local community bases as soon as he turned on the lights at the White House. Obama seemed “afraid of people getting out of control,” Ganz told Sasha Abramsky during a 2011 interview for The Nation. Obama and his inner circle, Ganz continued, “wanted to control the terms of the debate rather than be pushed from below by a chaotic, empowered, activist community.” Loyalty to Obama and his inner circle replaced loyalty to the hopes and dreams of the people, Ganz concluded.

Ganz had watched a progressive and inspirational leader lose touch with his base once before. He even wrote a book about it. Or more precisely, an extended epilogue to his book – Why David Sometimes Wins: Leadership, Organization, and Strategy in the California Farm Worker Movement – to explain one way grassroots leaders lose their grassroots followers. The formula Ganz laid out was pretty straightforward. Loyalty to the leader replaced loyalty to the grassroots dreams and aspirations of the troops.

In the epilogue to his book, Ganz gives readers a blow-by-blow account of how Caesar Chavez undermined his own farm workers movement by focusing an ever-increasing amount of time, energy, and money on keeping his own organization alive and in control of their early successes with farm owners. Fundraising through gifts and grants replaced fundraising from his own farm workers’ base with a telling result. Forty years ago, the UFW had 60,000 members. Now it has 5000.

The real title of his book, I suggested to Ganz, should be Why David Sometimes Loses After He Wins. Obama and his administration seemed to have done the same thing: lose after winning. 

Ganz now works with churches and other religious organizations to organize America – again. 

The Network of Spiritual Progressives [NSP]—the interfaith advocacy arm of Tikkun magazine, founded in 2005 by Tikkun Editor Rabbi Michael Lerner, Benedictine Sister Joan Chittister, and Harvard professor Cornel West—is also working to give birth to a new spiritual era for the True Self. The NSP, after all, is also “for people who do not believe in God or do not associate with any religion but do realize the need for a New Bottom Line in our world today.” There are countless other organizing efforts and organizers doing this work.  

But something is missing in this progressive work. All of these groups need a similar system that binds persons together within their organizations so they can work with insight, reflection and acts of compassion with other persons and groups. 

Love Beyond Belief Groups can function as this common spiritual denominator. These groups provide members within their own organizations and movements with ways to develop spiritual practices needed to affirm and experience the True Self. The goal of this initiative  is to create micro-spiritual communities of six to ten persons, namely, Love Beyond Belief Groups in which persons can feel renewed, supported and transformed. (See Appendix C: The Anatomy of LBB Groups.) When we link these LBB Groups together, millions upon millions strong, we can heal our communities, our nation, and the world.

Appendix C, The Anatomy of LBB Groups >