It used to be that indifferent wealth building and outsized risk was sexy. For thirty years, the world of high rolling high finance was the object of admiration and envy. The chants of "Wall Street sucks", some ten thousand strong in front of City Hall last week, signify that the days of glamour and greed are over. As inarticulate and ineffectual as that phrase might be, it reveals the increasing rage building against Wall Street titans. In the wake of the deepest financial crisis since the Great Depression, economic hardship has become too real for too many.
Wall Street's "burn baby burn" ethos isn't looking so hot these days. The thrill is gone baby. The thrill is gone away.
Last week, Wall Street's ruling class, the risk managers of the mortgage securities division at Goldman Sachs, were skewered to a well-done temperature by a suddenly alive and outraged Senate Committee.
Question: Where was this "you done wrong" stance when the Street paid themselves millions on the backs of the downtrodden and newly homeless? Where was the outrage and effective action when the industry cannibalized itself and then walked away with the Golden Goose? The rage of our elected officials on display across TV Land America seems too little too late to help those in foreclosure or destitute from loss of income due directly to the excessive greed of a select few.
The current anger at Wall Street seems to be channeled almost exclusively at one firm and that nefarious place called "Wall Street." Goldman Sachs has come to represent, for many critics, the Great Satan in modern America. Rolling Stone's Matt Taibbi called Goldman the "great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money." His attack on the Big Bank established lines of battle between those who believe the investment banking giant can do no wrong (Warren Buffet and junk bond king Michael Milken) and those who believe they are modern day Dillingers (Taibbi and most of America.)
In case you missed it, the Securities and Exchange Commission suddenly awakened from its decades long "see-no-evil" stupor. The S.E.C. brought civil charges against Goldman Sachs for allegedly deceiving its clients by selling bad debt called "synthetic CDOs" and then profiting from their clients' investment faux pas. These "exotic" financial instruments were once ironically termed "weapons of financial mass destruction" by Goldman's most vocal supporter, Warren Buffet. (Buffet invested $5.0 billion in GS in the fall of 2008.)
Taibbi points out in a recent UK Guardian article that the philosophy behind Goldman's defense is the medieval business model of caveat emptor. He writes, "The investment bank's cult of self-interest is on trial against the whole idea of civilization - the collective decision by all of us not to screw each other over even if we can."
Goldman's greatest critic is indeed correct that the investment giant's "cult of self-interest is on trial," but this is not exclusive to Goldman Sachs. They are simply the most visible and seemingly "best" practitioners of unrestrained profit seeking at the expense of the greater society. Goldman Sachs is not on trial literally (at least not yet). The entire business model of profit-at-any-cost (Atlas Shrinks) is "on trial" in the eyes of the public.
For years, the pendulum swung in the opposite direction. As a culture, we have defended a business model of profits-before-people that has come to bite us in the bloomin' butt. The model has been reduced to an inane battle of "conservatives versus liberals." Just curious: Since when is it "conservative" to take the food out of a baby's mouth and the roof over a hard working family's heads? Since when is it "liberal" to establish a morally restrained code of behavior that embodies the Golden Rule? All these absurd labels prove is that as a society we force people into tiny boxes for our tiny minds to comprehend and then completely miss the point.
The Point: Are we survival-of-the-fittest capitalists in a deadly game of Darwinian magnitude? Or are we morally responsible and socially conscious capitalists who have personal boundaries that in the pursuit of profit we will not cross? In other words: In the quest for money, is there anything at all that we won't or can't do?
Libertarians or Randian greed-mongers would say no. In the purity of the "free market," there is nothing we should not be able to do. Theirs is a Wild West philosophy of lawlessness, predatory mortgage lending, and under-the-radar "derivatives" sales.
The chances of Goldman Sachs breaking a securities law and being convicted of fraud are pretty slim. They are too clever and too connected to behave criminally. Goldman does not have to break laws to profit; they simply change laws to their advantage-circa Robert Rubin, Hank Paulson, and the New York Federal Reserve Bank. The purity of our democracy is the real issue, not Goldman's alleged "fraud."
While in Wyoming traveling from Yellowstone National Park some years ago, the owner of a lodge asked me if I wanted to go grizzly bear hunting. I replied, "I thought it was illegal to shoot grizzly bears." The cowboy smiled, "We make our own laws here." Looking around at the rugged and wild expanse of nature surrounding me, it was easy to understand his conviction. He could have killed me too and no one would have ever known.
What struck me most about his question was that he and I were of such contrasting worlds. I, a city girl, was comfortable with society's rules. He, a wilderness child, had no respect for anyone else's law. The fact that he thought I would share his love for the indiscriminate killing of innocent animals astonished me. We held completely different moral views.