By Sean Posey
On October 19, 1987, a worldwide stock market crash-dubbed Black Monday in the States-interrupted the go-go 1980s. Only weeks after that panic-filled day, Oliver Stone's meditation on the decade of greed, Wall Street, hit the theaters. The story of Bud Fox, a wannabe master of the universe, and his Machiavellian mentor Gordon Gekko, served as a morality tale that America did not want to hear at the time. (The film proved to be far more popular in later years than it was in 1987.) And many who did see the film deeply misunderstood its central lessons.
A generation of future brokers and investment bankers cited the movie as a central influence in their decision to go to work on Wall Street; however, Gordon Gekko, the flashy, glib, and dangerous corporate raider, became a lasting symbol for the economic and moral transition America has undergone over the past few decades. [1] The character's ruthless worldview is now the norm, and not just for Wall Street where the "21st century children of Gordon Gekko," as Australian Prime Minister Kevin Rudd referred to them in 2007, rule, but for society as a whole.[2] Gekko and Gekkoisms have penetrated the political, economic, and cultural fabric of America. The age of Gekko is a terrifying world where the winners "make the rules" and the losers "get slaughtered."[3]
The late 1980s represented an intoxicating time in American life. Larger than life millionaires and billionaires penetrated the popular imagination like never before. Jim and Tammy Faye Bakker, Ivan Boesky (the crooked Wall Street insider), Michael Milken (who partially inspired the Gekko character), Donald Trump (who is bringing the spirit of the 1980s back to the presidential stage), and even John Gotti, who brought a flashy 1980s sensibility to the New York Mafia, all represented the fabulous wealth that accumulated to a lucky few. But the machinations of Wall Street's elite in particular, captured the spirit of the era.
Wall Street emerged as a cautionary tale during a time when caution went right out the window. New economic experiments in the realm of government and finance (supply side economics, the deregulation of thrifts, etc.) led to great crises: rapidly increasing inequality and the savings and loan scandal. Stone's film targeted the exotic world of high finance, complete with well-dressed corporate raiders and fortunes accumulated through the destruction of companies.
In the film, Bud Fox (played by Charlie Sheen) comes from blue-collar roots and is looking to leapfrog from the world of a junior broker to the esteemed realm of investment banking. His prospective mentor is Gordon Gekko (portrayed by Michael Douglas), a flashy executive who symbolizes the worst aspects of both Wall Street and American capitalism. Although Gekko is framed as the villain, many audiences responded positively to the charming greenmailer. Both Stone and Douglas later remarked that they met numerous individuals who readily admitted that Gekko inspired them to pursue a career on Wall Street. [4]
Gekko did not just symbolize an era, however; he proved to be a prescient philosopher, introducing America to what would soon be its future. Late in the film, Bud Fox, in a crisis of conscience, begins to turn away from his amoral idol. Gekko, sensing his hesitation, explains to Fox how the world of the 1980s really works:
"It's all about bucks, kid. The rest is conversation… It's not a question of enough. It's a zero-sum game, somebody wins, somebody loses. Money itself isn't lost or gained-it's simply transferred from one perception to another."
"The richest 1 percent of this country owns half our country's wealth, five trillion dollars… You got 90 percent of the American public out there with little or no net worth. I create nothing. I own. We make the rules, pal: the news, war, famine, upheaval, the price of a paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it."
"Now your not naïve enough to think we are living in a democracy, are you, Buddy? It's the free market." [5]
Gekko's speech was far ahead of its time. The share in national income going to the top decile in the U.S., after dropping sharply following the Great Depression, returned to a rate of 50 percent by the turn of the century.[6] In 2005-2006, a leaked series of reports by analysts at Citigroup described an emerging "plutonomy," that is an economy driven by the spending of a small plutocratic class. [7] In many ways, America has returned to the Gilded Age, and it is once again a zero-sum game where those in the oligarchic plutocracy make the rules.
Government played a central role in the transition to a Gekko-esque economy. While Gekko pined for "the days of the free market" in Wall Street, President Reagan proclaimed, "Government is the problem."[8] This approach led to widespread efforts to deregulate the economy at almost every level, which coincided with reducing top tax rates on the wealthy.
Remarkably enough, the Clinton administration in the 1990s echoed Reagan and Gekko's sentiments: "The era of big government is over," Clinton declared. [9] The deregulation of the financial system proceeded apace with the Financial Services Modernization Act of 1999, which repealed part of the New Deal-era Glass-Steagall Act, and the Commodity Futures Modernization Act of 2000, which largely freed OTC derivatives from significant regulation. Economic bubbles began to emerge, and the sordid culture of Wall Street continued to thrive.
The days of the corporate raiders waned after the decade of greed, but with the Stock Market reaching new highs in the 1990s, a new generation of Wall Streeters looked to Gekko as a figure to emulate. Boiler Room, released in 2000, tells the story of a misguided young broker (Giovanni Ribisi) who goes to work for a shady chop shop firm during the height of the market. These young wannabes lack any of the charm of Gekko, but they emulate him all the same. When Ribisi's character goes to the home of the firm's head recruiter (Ben Affleck), he encounters a group watching Wall Street, which several characters recite from heart as it plays. And like down-market versions of Gekko, the employees of J.T. Marlin rip-off their clients with aplomb on their way to obscene riches. "There's no honor in taking that after school job at Mickey Dee's, honor's in the dollar, kid," Ribisi's character intones. "So I went the white boy way of slinging crack-rock: I became a stockbroker."[10]
Wall Street began to be used in ethics classes in business school, but judging by the behavior of the financial industry in the first decade of the 21st century, the moral lessons of the film apparently fell on deaf ears. Journalist Philip Delves Broughton describes how he remembers students at Harvard responding to Gekko's speeches: "At my old business school, Harvard, Gekko's speech electrified a snoozy morning class on leadership. By the time Gekko was done berating the board of Teldar Paper, the entire class was grinning and alert. For most MBA students that speech is less a parody than a guiding philosophy."[11]
"Gekko was merciless, but if he were on the Street today, the hedge fund guys would eat him alive," Fortune joked in a cover story on the old character in 2005.[12] The ruthlessness of the new Wall Street was confirmed by the events of 2007-2008. The children of Gordon Gekko brought the financial industry and indeed the country itself to its knees. Just as newly elected President Obama began bringing Wall Street scions like Lawrence Summers and Timothy Geithner into his new administration during the darkest days of the Great Recession, Oliver Stone readied Gordon Gekko for another appearance on the big screen.
Wall Street: Money Never Sleeps introduces audiences to an aged Gekko, recently released from prison after a laughable eight years. (Michael Milken only served two years in prison, and no major figures served prison time as a result of the financial meltdown of 2007-2008.) A free man, Gekko goes on a speaking tour in support of his memoirs. Addressing an auditorium of college students, he exclaims that, "Someone reminded me I once said 'Greed is good'. Now it seems it's legal." [13]
Indeed, the extreme views of Gordon Gekko circ. 1987 had been firmly baked into the culture by 2010. The titans of the financial industry knowingly drove their own companies into the ground in the name of short-term (personal) gain. And far from being punished, they were allowed to collect enormous bonuses while millions lost their homes and their livelihoods in a recession that continues to be a haunting reality for much of the country. Once again, a seemingly contrite Gekko plays the prescient sage in the sequel: "The system is insolvent. No one knows what to do next except repeat the insanity until the next bubble blows. That'll be the one, the big one."
Six years after Wall Street: Money Never Sleeps, little has changed. According to economist Emmanuel Saez, the top 1 percent of earners received 95 percent of the income gains between 2009-2012.[14] Conspicuous consumption is back on the rise, and Donald Trump, one of the most well known figures from the era of the original Wall Street, is the Republican candidate for president. In a fitting twist, Trump actually appears in a barbershop scene alongside Gekko in deleted scenes from Wall Street: Money Never Sleeps.
In 2013, Martin Scorsese released The Wolf of Wall Street, another well-timed tale of "greed is good" for post-Great Recession America. The center of the story is Jordan Belfort, one of the most notorious figures in the financial industry during the 1980s and 1990s. Leonardo DiCaprio's portrayal of Belfort represents a 21st century Gordon Gekko reborn as a "financial bro." Belfort, who made a large fortune on the backs of poorly informed blue-collar investors, comes across in an almost glamorous light-one of the chief criticisms of the film. During an advanced screening at the Regal Battery Park Theater in New York City, audiences cheered Belfort's on-screen exploits, including efforts to procure cocaine and prevent the feds from ensnaring criminal members of his own firm.[15]
The blame does not rest solely with Scorsese or the cast of the film, however. Lionizing the lifestyles of the rich and ruthless has become an American pastime. Even though movements like Occupy Wall Street have emerged to challenge the narrative of 'Greed is Good,' the Gekkos of the world continue to remain appealing characters to an American public inculcated into a mantra of success at any cost. Reality television shows are but one of the myriads of ways that a zero-sum society of Hobbesian dimensions is impressed upon us. Considering this, it is no surprise that America appears to be lurching toward accepting a modern day Leviathan, Donald Trump, as president. For a world where the ethics of Gordon Gekko dominate is a world where fear is bred by insecurity, and insecurity followed perhaps by authoritarianism.
Notes
[2] Kevin Rudd, Edited extract of the speech, "The Children of Gordon Gekko," October 6, 2008, The Australian. http://www.theaustralian.com.au/archive/news/the-children-of-gordon-gekko/story-e6frg7b6-1111117670209 (accessed May 24, 2016).
[3] Wall Street , directed by Oliver Stone, 20th Century Fox, 1987.
[4] Philip Delves Broughton, "Gordon's Back," London Evening Standard, September 14, 2009.
[5] Ibid.,
[6] Thomas Piketty, Capital in the Twenty-First Century (Cambridge: Bellknap Press, 2014), 334.
[7] Ajay Apur, Niall Macleod, Narendra Singh, 'The Plutonomy Symposium - Rising Tides Lifting Yachts," Citigroup, Equity Strategy, The Global Investigator, September 29, 2006.
[8] "Inaugural Address," Ronald Reagan, Washington, D.C., January 20, 1981.
[9] "State of the Union Address," Bill Clinton, Washington D.C., January 23, 1996.
[10] Boiler Room , directed by Ben Younger, New Line Cinema, 2000.
[11] Broughton, "Gordon's Back."
[12] Andy Serwer, Fortune, "Is Greed Still Good?" June 2005.
[13] Wall Street: Money Never Sleeps , directed by Oliver Stone, 20th Century Fox, 2010.
[14] Emanuel Saez, "Striking it Richer: The Evolution of Top Incomes in the United States, " UC Berkeley, September 3, 2013.
[15] Steve Perlberg, Business Insider, "We Saw 'Wolf of Wall Street' with a Bunch of Wall Street Dudes and it was Disturbing," December 19, 2013.
