In the dark ages that descended on the world economy during the sunrise of 2008, new weapons were thrust into the forge in preparation to fend off a second Great Depression. While many Americans left their jobs for the last time, others were handing the keys to the only home they had known over to a stranger with a red ink stamp.
The pages of foreclosure notices began to outnumber the employment listings in local newspapers throughout the country. Fear quickly found a compatriot in anger as blame was assigned and effigies were assembled for the lynching. “The Bankers” was the name bestowed by the public onto the thing that took their homes, their jobs, in fact the very lives that they had sacrificed and toiled to build. As it always must, the enemy now had a face to confront, a set of eyes that could absorb the stare of the helpless desperates and a pair of lips that might offer an answer as to why.
But America has misplaced its anger in the individual and thus may allow the fundamental flaws inherent within the economy’s structure to continue unabated. The fault line of the recent economic earthquake travels through the cracks and crevices of a failed financial system; not under the lines on the face of a father who went to work inside the economic engine of our own design.
Beginning long before the 1980’s obsession with Wall Street, America’s love affair with money had turned from a relationship of mutual respect and understanding into a horrid union of controlled servitude. In May of 1792, twenty-four men signed the Buttonwood Agreement in the shade of a tree on Wall Street creating the New York Stock Exchange. The original intent was honorable: grow the new American economy by investing in innovation and determination. By the 1930’s, the foundation of the House of Morgan had cemented the culture of the return investment. Before the twinkling lights of Vegas were a twinkling in the eyes of Tommy Hull, J.P. Morgan was creating wealth out of thin air.
By loaning money to small businesses and profiting from their success, members of the elite circle of exchange members could watch their money fornicate and multiply. For a handsome price, these members could also sell their access to the exchange so that other investor’s wallets could gorge at the banquet of speculation. Our economy grew strong as money flowed into the poorest corners. Americans cheered as the country rose to economic superiority. The means would only matter much later, when the end became undesirable.
Following the original agreement into the 21st century, only a broker who is a member of an exchange can trade within it and since the New York Stock Exchange is where American money goes to procreate, this arrangement creates a financial service in high demand by private investors who enter into legal contracts with these broker firms. The term investor refers to the holder of a single certificate of stock just as easily as it does to an international conglomerate with millions of diverse shares; a fact that has been clouded in much the same way as the power of attorney that is signed at the beginning of the investor/broker relationship.
Lawsuits are common in the world of the broker-dealer; most are filed immediately upon the announcement of value loss in a particular investment. Under ambiguous terms that usually hint at bad advice, financial fraud lawyers file these costly legal actions daily. While most of them are not based on violations of securities laws, there are some cases of broker wrongdoing. Even in the event that a broker wins in court, the costs can easily outweigh the gain of any broker fees. Investors lose money and seek to blame the one whom they trusted to make the educated guesses in the placement of their money. Erring on the side of the law that puts a hundred million dollars into the pocket of his boss instead of the cheap side of his suit behind the defendant’s table is not far from understandable. Avoiding legal action may prove an obvious deterrent to failure but when productivity standards within an investment firm are stressed to the point where pink slips are used as stationary, then the extra mile seems only a short walk to the water cooler.
Better performance brings bigger investors. Bigger investors wave around more money and the word bonus is expressed in numerology rather than English. In this type of corporate culture, production is rewarded. Production in an investment broker firm is measured in how much money each investor has made. In every workplace, producers are rewarded, and non-producers do not last long. Detractors draw a correlation between western card speculations with eastern business analyzation, but they would be surprised to learn how few laws were broken in the moments contributing to our current crisis.
We live in a culture that cannot abide a faceless culprit. When a computer crashes in Los Angeles, California; thousands immediately read a web log entry slanderous of a certain spectacled software engineer. Unpacking the crushed bread loaf from the grocery bag, a vulgar expletive escapes the mouth of a mother in vague hope that it will reach the ear of the bagger boy. The American legal system has internalized this idea by guaranteeing the right to face an accuser. While our legal system will weigh the facts and evidence relating to a power outage or the effect of inertia in a moving vehicle, individuals are calmed once a face has explained the accidental or unexplainable. This phenomenon has been intensely studied by Ohio University Professor Mark Alicke. In his findings, Professor Alicke concluded that
“The assumptions that people engage in blame-validation processing that tends to favor human agency explanations while de-emphasizing mitigating circumstance evidence links the study of blame with current theories of social cognition and judgment.”
In the context of Wall Street, the “mitigating circumstance[s]” is the legal and productivity standards in the finance industry that are over-shadowed in the collective thought process by the ‘Evil Bankers’ “human agency.” The danger in assigning blame in such a manner is prevalent in the above statement as well in that “de-emphasizing” what actually caused a problem by focusing on the who will allow for the escape of possible and more effective solutions. Unfortunately, the current political and social opinions of this scapegoat group of men are leading this country precisely in that direction.
These “Bankers” are simple men with simple ideas and simple ambitions. They pack a lunch or plan to eat out with friends during a much-deserved break in the workday. Like the guy in the yellow hard hat that he may greet on his way into the office, the young broker also wrings his hands in anticipation for a romantic reunion with five o’clock. It was not the greed of a few that caused the worst recession in history, it was the complacency and gluttony embedded into the system by the public hungry for their slice of American Pie. We freed this economic beast from the reigns and cheered in unison at its success. Only at its failure did the spectators begin to question the humaneness of the trainers. Do not continue to contribute in the national tirade that seeks to make the term banker a pejorative. These are not greedy and evil men bent on world domination; only men like any other trying to dominate his world.