Thursday, March 26, 2009

Barbarians on the tumbrels: A.I.G.’s U.S.A. I.O.U.

It was the latest laughable misstep in the fortunes of the American International Group, aka AIG, Inc., the global insurance behemoth whose improvident bets on the future of the housing market — bets made with nothing more substantial than the idea of cash reserves — lit the fuse for the demolition of the national economy, and whose insistence of paying employees bonuses from the public till have made them the symbol of a Wall Street off the rails:

Early this week, undertaking to curb the public relations nightmare associated with the company, AIG announced plans to change the name of the company. The sign at its Water Street headquarters has since come down. Effective more or less immediately, AIG is to be formally known as AIU Holdings — an unfortunate change, for obvious reasons. Bet your mortgage: Some other wiseass in the blogosphere has already conflated the new name with the letters “I.O.U.” There lies a lesson in how the wrong kind of damage control leads to worse damage than you started with.

Some of the worst injuries inflicted by AIG to this country register on another, different bottom line. Enlightened minds (and a lot that aren’t) can debate the wisdom of the managers of AIG in surreptitiously pursuing plans to pay employees with taxpayer money, or the involvement of Treasury Secretary Tim Geithner in those bonuses being approved to begin with; or the wisdom of trying to pry something north of $200 million from the hands of traders until recently more prepared to part ways with their livelihoods and reputations than with their money.

What can’t be disputed is the depth of class warfare, the palpable sense of Us Versus Them that the AIG/AIU/IOU imbroglio has awakened in the national heart.

We’ve always been a stratified nation. The racial divide is the obvious one, of course, but we’re also split along lines of gender, religion, sexual preference, political affiliation and income. Those divisions are played out every day in the public square. But it takes a crisis the magnitude of the one we’re facing now to awaken the partisanship of our economy, a division that usually stays on the downlow.

Of all the things we don’t tell other people, what we earn is probably No. 1. That changes when everybody’s business is in the street. Our respective firewalls, our tolerances for risk and pain, our conflicting senses of fair play are all out there now, naked and unavoidable, as the national economy faces its biggest meltdown since the Great Depression.

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Journalists are no doubt busy burnishing their bottom lines right now, lining up the book deals they’ll use to explain How It All Happened, the antecedent events that made the AIG mess possible.

One of the best such writers has already weighed in. In the new issue of Rolling Stone, staff writer and journalistic flamethrower Matt Taibbi offers a thorough, pungent and passionate exegesis of the current crisis, how we got here and how the AIG really the leading indicator of something larger, more conspiratorial and ominous: “ … a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.”

There are a lot of vantage points from which to look at how we got here. We can of course thank Hollywood for one in particular. In 1987, 20th Century Fox released “Wall Street,” Oliver Stone’s muscular, sometimes impressionistic view of one pilgrim’s progress through Reagan-era Wall Street.

Stone, never exactly one for subtlety, smartly distilled the go-go spirit of the times in a shareholder-meeting monologue made by Gordon Gekko, a Darth Vader trader of many ethical lapses:

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“The point, ladies and gentlemen, is that greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit. Greed in all its forms — greed for life, for money, for love and knowledge — has marked the upward surge of mankind, and greed, you mark my words, [will save that] malfunctioning corporation called the USA.”

The masters of the Wall Street universe had finally found a defining phrase short enough to put on the family crest in Latin. Champions of Reagan-era deregulation of the financial markets had their reason for being. Michael Douglas, who played Gekko in the movie, won an Oscar for best actor.

And consider it a certainty: In multiple somewheres around the America of twenty years ago, impressionable teenagers and young adults with a talent for numbers and a passion for money watched that monologue and quietly swore it an allegiance, used that noble perversity of an idea as a spiritual calling — took that ball and ran with it, ethics trailing in their wake, all the way to the derivatives desk at AIG.

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If Gordon Gekko gave Wall Street a credo, it’s fallen to the various business news channels of cable TV to give it an identity, one that’s lately revealed how cozy the relationships are between the Wall Street press and the ones they’re supposed to cover.

Almost by default, Wall Street media have adopted the raucous plumage of the floor traders they often interview. Programs like CNBC’s “Fast Money,” “Mad Money” and “Squawk Box” reflect the macho, clubby, red-meat-eating, towel-snapping ethos that powers and animates Wall Street — a boy’s club mentality that, oddly enough, isn’t countered in the least by the addition of female analysts featured on TV business news.

It’s led to a variety of excesses: “Mad Money,” Jim Cramer’s Ouija-board casino cavalcade of investment picks and pans, for example, or the meltdowns of such hypercaffeinated chowderheads as CNBC reporter Rick Santelli, who let his emotions get away from him on Feb. 19 in a mad rant on the trading floor of the Chicago Mercantile Exchange, an embarrassing and naked display of just how deeply have vs. have not thinking permeates the money culture.

And those excesses have led to others. You’ve no doubt seen the reaction to the reaction of the AIG traders to giving up their bonuses. It was probably inevitable: outraged citizens boarding charter buses, rolling the tumbrels next to the estates in Fairfield, Conn., where said traders hang their fur-lined hats. It's like a scene from a Frankenstein movie: metaphorical pitchforks and torches aloft, dogs in full cry while the monster huddles behind the moated castle walls.

Indeed, Connecticut has become something of the ground zero for outrage. Witness the content of some of the e-mails sent to the state Attorney General’s Office — e-mails that, while morally wrong as wrong can be in what they propose, still express a clear idea of the depth of consumerist rage:
We will hunt you down. Every penny. We will hunt your children and we will hunt your conscience … Give back the money or kill yourselves.

You motherfucking, cocksucking dicklickers need to be taken out one by one and shot in the head. There’s a special place in hell for you pond scum …

Your blood will run through the streets in the coming months.

Clearly, Mr. Gekko, greed’s not good for everybody.

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What's taking shape is a crisis as much cultural as economic. What the bailouts of AIG, and the rescue packages for other failing institutions do, as much as anything else, is to reveal for Americans of every stripe and W-2 how rigged the game of financial assistance really is in this nation. They show how the culture of money in America has largely become a rapacious exercise favoring the insiders and dismissing everyday people.

Finally, by pretending that ordinary Americans are the outsiders, Wall Street reveals its utter disconnect with Main Street, where John and Jane Q. Public live in an estate with a kid’s tricycle in the driveway instead of a brand-new BMW; where John & Jane juggle the bills hoping the unemployment check will stretch another week — when they get the next one; where Americans face the decline of their own balance sheets without a bailout in sight.

AIG, or AIU Holdings or IOU Holdups or whatever it calls itself next month, is only the symbol of a deeper disjunction within the American economy. The willingness to ride to the rescue of companies considered too big to fail conceals, just barely, a disdain for a pool of investors too big to ignore: the 100 million everyday Americans who own stock — or who did as of last year … before the deluge.

Wall Street still looks at those everyday Americans as outsiders, and they will right up until the moment they hear the glass wall between Us and Them start to crash, and they gain that unexpected revelation: that the wall separating our fates, futures and destinies never really existed in the first place.
Image credits: Stock ticker: Google. NYC Job-Loss Meter: Crain's New York Business.

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