What were our captains of industry and finance
doing during their years in the hallowed halls of education
when they were supposed to be learning history and its lessons?
Cramming for a quiz on discounted cash flow or copying their
fraternity brothers' accounting homework? Or maybe they were
skipping class to buy a term paper to get through a useless
liberal arts course like history. What does history teach about
quarterly earnings and capital expenditures? Who wants to read
all that nonsense about the French Revolution all over again?
They had had their fill of it in high school.
Obviously they didn't.
History does repeat itself, and it seems to do it
with greater frequency in the financial world than elsewhere.
Yet those who are in the executive suites of banks and lending
institutions seem to have been elsewhere when their professors
Financial crises seem to occur with increasing
regularity these days-a few years ago there was the dot-com
bubble; in centuries past there was the tulip mania in the
Netherlands-or maybe it's just the media talking about it too
much and making it happen. Actually, all of us are at
Gordon Gecko, the character in the film Wall
Street, told us that greed was good, and nobody disputed him
even though most Christian churches list greed as one of the
seven deadly sins. We can't be satisfied with a 3-percent
return on our savings, or a mix of investments in stocks and
bonds that bring modest returns. We want that
10-percent-or-better return on our investment that smooth
talkers like Bernie Madoff are delighted to offer and we are
only too willing to swallow-hook, line and sinking 401(k).
But it's not only Ponzi scheme operators and
overpaid bank executives that are at fault, although the scope
of their avariciousness can be beyond astonishing. A $1,400
parchment trash can for former Merrill Lynch chief executive
officer John Thain? Maybe we can put it near Tyco chief
executive officer Dennis Kozlowski's $6,000 shower curtain and
$15,000 umbrella stand.
We all seem to be indifferent to history and its
lessons when it looks like we can make a few more bucks than
the other guy. Surely, most of us have heard George Santayana's
famed insight that those who cannot remember the past are
condemned to repeat it. We just haven't taken it to
heart-wrapped our heads around it, as so many people are wont
to say these days.
Ignorance of history might be attributed to an
educational gap. Some inner-city schools have such gaps and
kids don't learn to read well enough. They won't be left
behind, though. That's the law. Hopefully, that shortfall can
be repaired by literacy training. Even adults can learn. I've
Perhaps a crash course in history and its
implications for modern life could be established and promoted.
After all, we have weekend MBA programs. But learning not to
repeat history's mistakes and failures isn't the only troubling
issue. There is also a mindset of arrogance and indifference
that many executives display toward their fellow citizens. In
late January, as the economy was tumbling even further down the
hill into the recessionary trough, one big pharmaceutical
company announced it would buy another big drugmaker for
billions of dollars. On the same day that New York-based Pfizer
Inc. said it would slash thousands of jobs, a dozen other major
companies, including Caterpillar Inc., Peoria, Ill., and Home
Depot Inc., Atlanta, were announcing substantial employee
The takeover news spawned a buying spree on Wall
Street, and the economic analysts on some of the business news
programs were marveling that the mergers and acquisitions
business was recovering, a sure sign that the financial bailout
of Wall Street was working. Big companies can get more money to
buy their competitors and become even bigger. That solves our
economic problems, right?
What will these industries tell the multitudes that
file out the doors of their plants and offices with a severance
check and little hope for finding another job elsewhere? Let
'em eat Prozac! Marie Antoinette said much the same thing to
the starving French peasants when they could no longer buy
flour to make bread. Not too much later they lopped off her
I could argue that we are seeing a repetition of
that in the financial industry. Where are those top executives
who were taking home million-dollar salaries and even bigger
bonuses and popping up on CNBC with unexpected regularity?
Thankfully, their heads are still attached to their bodies, but
they and many of their coworkers are now unemployed. The same
financial kings and noblemen who promoted and encouraged
acquisitions and financed management buyouts are jobless,
although they're probably not feeling financial pains like the
average unemployed Joe. Still, there are a lot of them out on
the street looking for a dwindling number of jobs, much like
many of the people that their merger-and-acquisition
departments helped put out of work.
I'm just as strong a believer in Adam Smith's
invisible hand as any other registered Republican capitalist
roader, but there is something fundamentally twisted about the
perception that what's good for Wall Street is good for the
rest of us. MICHAEL MARLEY