What would Gordon Gekko say about today's financial picture — and investors' motives?
What about people who are so well off that, on the surface, they don’t have to worry about where the next paycheck is coming from — people who seem to have it all together with their financial dealings?
Back in 1987, and again in 2010, the wealthy and unscrupulous corporate raider Gordon Gekko of Wall Street fame seemed to have the financial underpinnings of America and the world all figured out. Though the fictional character was arrogant, smarmy and occasionally toxic with those closest to him, there was something very accessible about his outlook on life that captured the collective imagination.
In 2008, Forbes listed Gordon Gekko the fourth richest fictional character in the nation, attributing $8.5 billion in net worth to him.
Setting the stage for the 2010 sequel: Gekko emerges from prison in 2001 totally alone, nobody to meet him, yet by 2007, he’s bounced back with the book Is Greed Good?: Why Wall Street Has Gone Too Far, trying to warn of the coming economic downturn.
Given that a lot has happened since 2010, anybody intrigued with Gekko’s cynical world view would wonder what he would make of the current situation. Which side would he be on politically, and why? Would he do his own thing? How do real-world financial experts feel his mindset from the movies would fly in today’s world?
“Gordon Gekko would react coolly,” says Todd Kelly, assistant vice president at TD Bank’s Warrington branch. “He would probably have the inside track and would be making all the money that everybody else is losing.
“Politically he would play both sides as well. That way he can get favors off of whoever is in power. However, his mindset would not fly in the financial world of today, as the tide has shifted to ethics and win-win deals as ways to get ahead in the financial world today.”
Philadelphia-based Jerry Gross, founder of Gross Financial Services, points out that his clients at all income levels come to him because they have some degree of greed and want to know they can have things they covet, like a good retirement or a second home. If it wasn’t for a mix of self-preservation and greed, they would try to invest money on their own, and probably make a lot of mistakes in the process.
“If my clients don’t have a certain level of greed, and certain goals, we’re not going to get along,” Gross affirms. “I help my clients deal with their greed, as it is part of my presentation. Sometimes I will run into clients on the street, and they will tell their companions, ‘There’s my financial guy who’s trying to make me rich.’ ”
The right message? Says Gross, “I will remind them, ‘I am not necessarily trying to make you rich. I am trying to make sure you won’t get poor.’ That said, my job is to get clients less focused on getting rich, and more concentrated on reaching goals, such as retirement or their children’s education.”
Like Gekko, Douglas Goldstein, a certified financial planner and trust and estate practitioner, has an international perspective on how greed can help drive people either deeper into financial debauchery or toward solid self-preservation. Poised to launch his new book, The Expatriate’s Guide to Money and Taxes, he is a U.S.-born adviser based in Israel who wants to keep the public aware of new changes in the U.S. tax law and an explanation of why immigrants coming to Israel are getting hit by the IRS.
“I think Gordon Gekko would say that he predicted” the fiscal cliff, dept ceiling and tax situation, conjectures Goldstein. “I also think that he not only believed greed is good, but acting on greed to get ahead is the way most people function.
“Everybody knew this problem was a long time in the making, and it did not just suddenly happen. We have been aware of the problems that tax controversies and government spending have caused for years, and the fiscal cliff has been a hot topic for months.
“The proof is in the pudding, and the government on both sides of the aisle was not willing to compromise because each side wanted to get as much out of the negotiations — which Gekko would argue as proof that ‘greed is good.’ ”
Goldstein thinks about his statement for a minute and then points out that the Gordon Gekko signature line from the movie was misquoted. Gekko, in fact, did not say, “Greed is good,” he claims, but “Greed, for lack of a better word, is good.”
While he is not sure if the fictional Gekko was hedging or explaining greed as a concept for the human condition, he says he believes Gekko’s take on greed was less about a moral equivalent and more about explaining how greed clarifies people’s motives. Therefore, it is much easier to do business with somebody when you understand what his interests and motivations are.
Goldstein says that this way of interpreting “greed” is pretty much a global phenomenon. One book published in 2010 that Goldstein says he feels will help average people understand Gekko’s mentality and the way today’s economy works is This Time is Different: Eight Centuries of Financial Folly, by economists Kenneth Rogoff and Carmen Reinhart.
The book, through the results of studies and colorful anecdotes of financial crises through history, underscores the reality that excessive debt accumulation has always been a bad thing, no matter where in the world or what time in history. The assessments also highlight the fact that someone’s greed at some point has been a catalyst for both trouble and change.
“You see this kind of thing happening in the Middle East and in Israel on a day-to-day business in commerce,” Goldstein observes. “Anybody who has shopped in a market in Israel will have had at least one experience where a vendor will make their pitch saying, ‘Let me help you out’ or ‘Let me sell you this thing because it will help you out.’
“In the movie, the Gekko character was in a position to overpower his opponents” using that sort of appeal, says Goldstein.
“In situations where there is a susceptible population, such as the American expatriate population I work with, the government can pass unbelievably onerous laws that attack this population which cannot defend itself. The U.S. expats look at the U.S. tax authority as a Gordon Gekko parallel, somebody who is trying to squeeze the lifeblood out of them, with no means of fighting back.”
Lessons? While Gordon Gekko revealed toward the end of the sequel Wall Street: Money Never Sleeps that this leopard never changes his proverbial spots, the lesson we can learn is to channel our wants and needs to more solid financial decisions while being fully mindful of the fact that other people out there — including our rivals and competitors — are thinking the exact same way.
Elyse Glickman writes on a variety of topics for magazines around the world. This article originally appeared in "Financial Health," a special section.