Abstract
In contrast to the IT industry’s dominant fable of the successful startup, the financial trading industry’s dominant fable almost invariably involves executive and/or corporate wrongdoing, sometimes criminality, with a detrimental impact on society. Financial trading’s corporate nightmare fable is often the result of pure fraud. A close analysis of texts about the Enron bankruptcy and the 2008 financial crisis (the book and movie The Big Short, the documentary Inside Job, and the movie Margin Call) reveals deep ambivalences and tensions regarding recent transformations of the American financial system, its foundational inequities, and the frequently compromised moral agency of the individuals participating in it.
The phrase quoted in the title is taken from A.O. Scott’s New York Times review of Alex Gibney’s documentary Enron: The Smartest Guys in the Room, April 22, 2005.
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Notes
- 1.
An edited version of Rudd’s speech was published in The Australian on October 6, 2008 (http://www.theaustralian.com.au/archive/news/the-children-of-gordon-gekko), accessed August 28, 2017.
- 2.
(http://www.telegraph.co.uk/comment/telegraph-view/3562248/Who-is-to-blame-for-the-great-financial-crisis.html), accessed August 28, 2017. The term “spiv” first gained currency after WWII to describe newly rich men who had made their fortunes as war profiteers and black marketers.
- 3.
In 2012 the FBI enlisted Michael Douglas, the actor who played Gekko, to film a public service video encouraging citizens to report suspected cases of securities fraud or insider trading. The video begins with a clip of Douglas as Gekko intoning the famous “Greed is good. Greed is right” speech. It then shifts to a much older, greyer Douglas somberly identifying himself and his role in the film as “a greedy corporate executive who cheated to profit while innocent investors lost their savings.” He goes on: “The movie was fiction, but the problem is real. Our economy is increasingly dependent on the success and the integrity of the financial markets. If a deal looks too good to be true, it probably is.” The video ends with instructions on how to report suspected fraudulent activities (https://www.fbi.gov/video-repository/newss-financial-fraud-public-service-announcement/view), accessed August 29, 2017.
- 4.
Sorkin notes “It was the first time – perhaps the only time – that the nine most powerful CEOs in American finance and their regulators would be in the same room at the same time” (Sorkin 2010, 526). Andrew Ross Sorkin, the author of Too Big to Fail cited here, should not be confused with Aaron Sorkin, author of the screenplay of The Social Network (and creator of the cult TV series The West Wing).
- 5.
When originally published in hardcover in 2012 Patterson’s book carried the subtitle noted in the text. Subsequent paperback and ebook printings, however, recast the subtitle to The Rise of the Machine Traders and the Rigging of the U.S. Stock Market, although the text’s content remained unchanged. This suggests that Patterson’s publishers, at least, felt the trope of the rigged market had a broader appeal, or perhaps conformed more closely to readers’ expectations of the Wall Street exposé genre, than that of an unstable one.
- 6.
See for example “$100 Million Idea: Use Greed for Good,” Chicago Tribune, December 15, 1986 (http://articles.chicagotribune.com/1986-12-15/features/8604030643_1), accessed September 29, 2017.
- 7.
Belfort acknowledged his “inspiration” in an interview with the London Telegraph in February of 2008: “My role models were Michael Douglas’s character, Gordon Gekko, in the movie Wall Street and Richard Gere from Pretty Woman ... the ultimate Wall Street rich guy.” On the “Making of” feature included in the 2000 release of the Wall Street DVD, Douglas recounts his disgust with the innumerable young male fans who continue to accost him on the street saying “Hey man, you’re the reason I got into Wall Street. Yeah, Gordon Gekko, right.” Douglas adds acidly, “And I say I was the villain in that movie.” Belfort, at least, acknowledged that Gekko was a fictional character.
- 8.
The hope may not be well-founded. In a recent course (2017), Borins read an undergraduate paper whose student author proudly noted that he had viewed The Wolf of Wall Street fourteen times and considered it the template for his future career—though omitting the criminal convictions and four-year jail term.
- 9.
Ho’s chapters “The Neoclassical Roots and Origin Narratives of Shareholder Value” and “Liquid Lives, Compensation Schemes, and the Making of (Unsustainable) Financial Markets” provide a detailed exploration of the ways in which both the ideology of shareholder value and the mechanism of “pay for performance” lie at the “core of Wall Street’s institutional values” (258). She also discusses at length the profound implications of the accompanying structural assumption of insecurity of employment, in the investment banking sector in particular.
In his editorial essay on the distorting effects of the superhero CEO phenomenon, Sorowiecki describes shareholder value as “that favorite mantra of every 1990s CEO.” And Elkind comments in the Enron film: “Everyone at Enron had a stake in the stocks going up. And it was driven very clearly by the profits every quarter … They posted the stock price in the elevator.”
- 10.
British reviewers of the film reached for other literary references, invoking the great swindlers of Charles Dickens and Anthony Trollope’s panoramic social novels Little Dorrit (1857) and The Way We Live Now (1875). Peter Bradshaw, writing in The Guardian on April 28, 2006, observed “Dickens and Trollope, who created the phony billionaires Mr. Merdle and Mr. Melmotte, would have appreciated Lay and Skilling,” while Anthony Quinn of The Independent felt “even Trollope and his High Victorian readers would have wondered at” the levels of hubris and greed Enron’s “riveting story” reveals (April 27, 2006).
- 11.
How issues of gender play out within these financial narratives is a fascinating subject that deserves sustained analysis. Gibney’s film documents extensively what Peter Elkind calls “the whole macho culture of the place,” seeing in its financial risk-taking another version of the extreme sport adventure trips organized by Skilling for favored executives and the company sanctioned expenditure on strip club entertainment. In his commentary Gibney asserts that “the women in the Enron story” function as moral arbiters, outside of the boys’ club and with “a larger sense of ethics and morality,” though it is clear that several of those women (Sherron Watkins, Amanda Brock-Martin) who receive significant screen time analyzing and denouncing the “bad guys,” are rather more complex, and more compromised, characters than this formulation allows. It is also worth noting Gibney’s voice-over remarks at Bethany McLean’s first on-screen appearance: “Such a pretty young woman in this high-octane film about finance, but she earns your respect at the end.” There is, clearly, a lot to unpack there.
- 12.
The full title of McLean’s article as it originally appeared is “Is Enron Overpriced? It’s in a bunch of complex businesses. Its financial statements are nearly impenetrable. So why is Enron trading at such a huge multiple?”
- 13.
Jordan Belfort, in his interview with the Telegraph confirms Gnaizda’s indictment, noting that his ambition to emulate “the ultimate [fictional] Wall Street rich guy” involved some very specific real-world concomitants: “the presidential hotel suite, the Ferrari, the house on the beach, the gorgeous blonde, the expensive wine, the art auctions, the yacht” (Leonard 2008).
- 14.
Ferguson also notes in his director’s commentary that as he was recording his remarks, “The Financial Crisis Inquiry Commission has requested to screen the film.” The Commission, unlike the filmmaker, had the power to subpoena witnesses.
- 15.
In the supplementary commentary on the DVD of the film, Marrs discusses extensively the selection and grooming of interviewees. The choice was determined, according to Marrs, by “What they could offer substantively and whether they would work behind [sic] a camera.” Regarding appearance—all the interviewees, with the exception of Gnaizda, wear decidedly expensive-looking “banker” garb—Marrs notes “We prompted them to dress that way. We talked to every interviewee about what they were going to wear. We coordinated ties and backgrounds.”
- 16.
Marrs and Ferguson, in their commentary, acknowledge that the film’s narration owes a significant debt to the actor Matt Damon who performs it. He was consulted not just on the text of the narration but was also sent a transcript of all the interviews in advance of recording. They note that the film’s concluding narration, in particular, “owes a considerable amount to the suggestions he made.”
- 17.
Ho’s Liquidated seeks to expose the institutional practices and structures through which this normalization is continually enacted and reproduced. The most relevant chapters are “Anthropology Goes to Wall Street,” and “Leveraging Dominance and Crises through the Global.”
Ferguson notes in his commentary that the renowned director Werner Herzog had asked him why he had not included more in the film about the general mania that accompanied the subprime housing bubble, that is, why his account left out any assessment of the interpellation of “ordinary” Americans by the values and mechanisms of the market: “And the answer was just time, you know, focus.” He had a different story to tell.
- 18.
Ferguson’s first documentary was the highly acclaimed No End in Sight (2007), an examination of the Bush administration’s conduct of the Iraq war. It was nominated for an Academy Award and made many critics’ lists of best movies of the year. In contrast, McKay’s previous work includes cowriting and directing the determinedly low-brow, and very successful, comedies Anchorman and Talledega Nights, starring the former Saturday Night Live performer Will Farrell.
- 19.
The outsider/nonconformist/misfit who sees what others do not was also a narrative trope for Lewis in his lengthy review of Schroeder’s biography of Buffett which appeared in The New Republic on June 3, 2009, under the title “The Master of Money.” In Lewis’s assessment, the personality and behavior of the young Buffett, as recounted in detail by Schroeder, add up to “the portrait of a universal loser,” and yet “Warren Buffett saw deals no one else saw,” a talent he combined with an early-acquired “ability to believe that the universe was wrong and he was right.” Lewis uses very similar language to describe Michael Burry, one of the “shorts”: “It was one of the fringe benefits of living for so many years essentially alienated from the world around him: He could easily believe that he was right and the world was wrong” (Lewis 2010, 120). The review can be found at https://newrepublic.com/article/62328/the-master-money, accessed September 13, 2017.
- 20.
Lewis uses the real names of the “shorts” in his book. Some of the surnames were changed for the movie version at the request of the individuals themselves. Their reasons are discussed in a New York Times interview with cast members of the movie published November 24, 2015, “Actors of ‘The Big Short’ Talk About the Debt Crisis, in Beverley Hills.” Within the text, the second surname indicates the film character.
- 21.
The words are Steve Baum’s and come in his climactic speech to an industry forum as the bubble finally bursts. He continues: “And as fun as it is to watch pompous, dumb Wall Streeters be wildly wrong – and you are wrong, sir – I just know that at the end of the day, average people are going to be the ones who are going to have to pay for this. Because they always, always do.”
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Borins, S., Herst, B. (2018). “A Good Dose of Outrage”: Financial Trading Fables. In: Negotiating Business Narratives. Palgrave Pivot, Cham. https://doi.org/10.1007/978-3-319-77923-2_4
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