About a year a ago I moved my modest retirement investment out of the stock market into a simple CD.
For a while I'd been hearing "Know What You Own" campaigns, pitching "socially responsible investing", warning people that they may own Halliburton - though a high performing stock, a corporation many Americans find detestable for their alleged war profiteering, ties to neocon hawks in high places, billing infractions and ultimately their recent un-American relocation plans. According to a spokesman, "It's just business".
Though I found I actually owned some Halliburton stock (HAL) as part of a diversified fund, my decision to get out of stocks altogether went far deeper. At some point I'd come to a rather drastic realization - most of the activity in the stock market is unethical today.
Originally begun during America's great industrial expansion as a way for companies to raise needed capital for growth, the formula was much more defensible then: invest in a growing company to collect dividends as profit is realized, and sell only when you needed the money - for example retirement or a large purchase.
The market was exploited and bastardized from the start, with historic scandals and collapses devastating investors time and again, drawing wealth away from the average investor and towards the "financial community" and their bosses - the robber barons and industrialists who sucked the working classes dry.
And what is the typical stock trade like today? Pick a stock (not a company) you think will go up so you can gain by sticking your co-investor with a loss. Most stock purchases today are not predicated on a company's business practices, nor an expectation of a dividend payment, but simply a hunch the stock value will rise. This is a disappointing statement on the state of American productivity. We discourage hard work, creativity and innovation in favor of clever financial chess moves tantamount to gambling or "rooting" for growth.
As the great depression and subsequent crashes have shown, greed begets misery - and sends the money right to the top. If there was a market crash tomorrow, those with the ability to execute and finalize trades the quickest could sell off before anyone else, essentially robbing those with the slowest pipeline to the "digital trading floor". Do you think you'd be able to dump your shares before the CEO of Merrill Lynch dumped his?
The recent collapse of the sub-prime mortgage industry is a perfect example of greed and unethical business practices coming home to roost. Home values have doubled since 2000, causing all kinds of reckless and speculative lending in the housing market. It's not a stretch to see how predatory lenders with abrasive radio ads could have overreached responsible practices, but it was the huge investment banks like Goldman Sachs and Credit Swisse who underwrote the loans, reselling them after complex packaging.
These firms would bundle thousands of loans, slicing and dicing the initial interest-only repayment portions into low-risk investment products, separating the high-rising variable rate long term repayment portions of the loans into other "real-estate backed" packages, using all kinds of salesmanship to lure investors into what amounted to pump-and-dump schemes. Though they had to know it was unsustainable, the only question was when it would finally take a downturn and whether they could get their assets out before everybody else.
Just like many other willfully unethical financial scams, the losers are the "last one off the merry-go-round" or the ones "stuck holding the bag". If underregulated, legal loan-sharking ruined lives, we can just chalk it up to the cold, harsh realities of contemporary American business practices.
My father used to have a sign on the wall that said "Morality is the science of attracting good fortune".
Whether you believe in karma, or that you'll be judged one day at St. Peter's Gates, or just feel you don't want to be a part of a immoral economic ecosystem anymore, it may be time to ask yourself what your "financial goals" are based on.
If you simply want to make as much money as possible and don't care how that money is generated, you may not need to do anything but hope your fund manager is adept at screwing "the other guy" or that you are just plain lucky in the Wall Street casino.
If this is so, I'm sorry that America today is losing the so much of the entrepreneurial spirit we once had in engineering, manufacturing, production and development. For example, we're so far behind in R&D of hybrid autos, in-the-red Ford and GM had to crawl to Toyota begging for handouts.
Why couldn't American ingenuity build a competitive car run with batteries? Laziness? Stupidity? So much of the "business world" today is composed of people pushing paper around in circles, I wonder how this is possibly supposed to keep the country vital and how long it can last before our lack of ingenuity and production of "tangibles" comes around to haunt us.
Ironically, the Japanese, Chinese and Saudis own so much of our debt and commodities today that they could willfully devalue our dollar at any moment, save for the fact that we are their biggest consumer market for energy, cars and other manufactured goods. With our national savings now in the negative, our economy is being artificially propped simply so we can run our debts up further.
I believe being an American is more then looking to make money at the expense of others and hope we can all take a look at the morality of our own professions, investments, purchases and lifestyles to make the country better. And this is hardly news - one need only look as far as the first book ever printed to see the abandoned ancient wisdom that says "Love of money is the root of all evil".
Too many of us place the importance of money over personal ethics and the future of our country. Dear reader, I ask you consider one last concept. As powerful as individual American adults may be by virtue of their ability to cast votes, I would suggest that the things you do and don't do with your money may be even more influential.
Boycotting bad actors like ExxonMobil or Wal-Mart is commendable and encouraged, but the "power of the purse" means much more when you add a few zeros to the amounts involved. Consider socially responsible investing but more importantly, think about how and why your money may be growing and where the profit is coming from.
Chances are, you are allowing financial companies to handle tens or hundreds of thousands of your dollars, supporting scores of corporations at their discretion with the sole aim of making as great a return as possible. If you think these fund managers are doing this in ways that never come into conflict with moral, environmental, labor, human rights and product safety concerns, you might want to check into the specifics a bit.
For example, if you oppose the way big pharma is working to get all Americans hooked on their meds, or disapprove of "middleman" healthcare providers marking up your medical costs, you might want to avoid that sector. If you think defense contractors have too few qualms about sending our troops into harm's way, you may rethink those stocks.
You might question big oil, big auto, big coal or big chem (the origins of socially responsible investing trace back to the public outcry against Dow Chemical for war profiteering in 1972 after Life Magazine published a photo of a nine year-old Vietnamese girl running towards a photographer screaming, her back burning from the napalm dropped on her village).
Perhaps you have it in for big tobacco, genetically modified food producers like Monsanto, or sweatshop factory interests. Maybe you think credit card titans, monolithic banks or student loan suppliers need to be sent a message. Maybe it's big media that upsets you, such as Clearchannel or News Corp. Maybe you dislike junk food pushers like McDonalds or Coca Cola.
Whatever you decide, please realize that use of your riches gives great power and control over to others which you could be wielding yourself for a far greater good.
