If you don’t know by now, my mind floats these days almost entirely in the sea of political economy, and I’ve just seen what I feel is the best movie on high finance I’ve ever seen. As I’ve already tweeted, it makes Oliver Stone’s “Wall Street” look like a Stan Lee comic. It’s called Margin Call and it raises some basic questions. The scene is this: The year appears to be 2008. A more than century-old Wall Street investment bank dealing heavily in mortgage backed securities has just discovered that the trading model and its formula is fatally flawed, and the risk it currently holds, if the market for MBS’s even slows, is enough to sink the bank. And that is only a fraction of the five trillion dollars in the MBS paper it has already sold to clients. The bank could be Bear Stearns in this, but as it develops later, it could be Goldman Sachs in its moves to save itself regardless of the market, the economy, the world. Will Emerson has been with the bank for 10 years and now supervises the sales force dumping these on the market. Seth Bregman is a heartless 23 year old junior risk analyst obsessed with what he and everyone else earns. Regardless of what I’ve transcribed here, basically, he’s a punk.
The shit is about to hit the fan when this conversation takes place. Their employer is about to shock the markets by dumping their entire stock debt onto an unsuspecting market The CEO of this bank is determined, above all else, to be the only one left standing.
Seth Bregman: Shit. This is reall going to affect people.
Will Emerson: Yeah, this is going to affect people like me.
Seth Bregman: No, no. Real people.
Will Emerson: Jesus, Seth. Listen. If you really want to do this with your life you have to believe that you are necessary. And you are. People want to live like this in their cars and their big fucking houses they can’t even pay for, then you’re necessary.
The only reason they all get to live like kings is because we have got our fingers on the scales in their favor. I take my hand off, and then the whole world gets really fucking fair really fucking quickly and nobody actually wants that. They say that they do but they dont. They want what we have to give them, but they also want to, you know, play innocent and pretend they have no idea where it came from and that is more hypocrisy than I am willing to swallow, so fuck them.
Fuck normal people.
You know the funny thing is, if all of this goes tits-up, they’re going to crucify us for being too reckless. But if we are wrong, and everything gets back on track, well then the same people are going to laugh until they piss their pants because we’re going to look like the biggest pussies God ever let through the door.
Seth Bregman: You think we are going to be wrong?
Will Emerson: No, they’re all fucked.
What Will Emerson has to say about the cattle is something I find hard to refute. For various reasons, whether people choose to remain ignorant or would rather indulge in groupthink, the fact is, most people do not want to do the work it takes to be a good consumer, a good investor, or even a good citizen.
In some ways, I cannot blame them. They’re working hard enough at home and at work trying to get by and raise a family. They are willing, to a certain extent, to turn a blind eye at control fraud and corruption as long as they can get along with their lives and work in relative peace. They already, especially if they are working mothers, have enough on their plate, and it is not their job to ensure good governance at the heart of our economy. It is so much easier to play follow the leader. Certainly, unlike Jamie Dimon, Bob Diamond, Lloyd Blankfein, et al, they aren’t being paid to do so. Just as certainly, as I can attest having tried to catch up these last six or seven years, it is neither cheap nor easy to attempt.
I just happen to feel that yes, it is my job and the temptation is strong to take Will Emerson’s point and say that these people deserve whatever they have coming to them, and this is the mantra of the free market jihadis, like the one I heard, an anchor on CNBC:
“America is about effort. Winner and losers”
and I resist the temptation. America is also about participatory government along with the freedoms necessary to undertake self-government (including religious freedom, which is really freedom of conscience). It would be disingenuous of me to point out that people deserving what they get pass that along to their children, since I have none, but nontheless it remains a valid point, however, these selfsame people generally like to think they will be dealt with honestly. They feel that they deal with others likewise, and I’d like to take them at their word.
If we cannot take these people at their word, then America is as many already think it: a country born out of genocide and slavery in which the most precious liberty of all replaces the vote with the dollar (as perhaps we already have) is to double-deal each other, at least those who don’t belong to our tribe, into oblivion.
America or Amerika? It’s on you.