Wednesday, June 26, 2002

Note To The Greedhounds -- Whoever They Are

The sigh of investors
heard with each new market low is palpable, and after
two years of being beaten like stepmules, the only
reason most investors have not turned everything into
cash is their belief, or hope, as the case may be, that
the market is near bottom. (It is, ironically, the same
sigh heard when the NASDAQ dropped from 5,000 to 4,000,
then to 3,000, then impossibly, to 2000. Yesterday, the
technology-laden index closed at $1,428.)

How far
we have fallen since the late 1990's when, to some
degree, most everyone believed that technology was going
to solve the problems of the world, act as the great
equalizer, raise all boats, improve our environment, and
achieve other innumerable wonders. Many invested in the
visions of AOL and Cisco and thousands of other high
tech companies that were each going to "connect the
world" and finally make us one.

That vision
sounded grand at the time, but now, just two years
later, the nearly universal devotion to high tech is
derisively dismissed as "the bubble," one that burst in
our face and eliminated trillions of dollars in wealth.
The pain is palpable, and you can hear it -- that
collective whine of regret muttered by those who still
have the courage to open and read their 401(k)

Interestingly, most perceive the
problem as one of timing. "If only I had gotten out at
the top," is the oft-heard lament, but it is one that
misses the point, for the problem was not our failure to
get in at the bottom or out at the top, but our reasons
for getting in to begin with. The failure, in
retrospect, was our raw, unadulterated greed that grew
from the experience of waking up everyday with more, of
running to the mailbox each month to find out just how
brilliant we were as investors.

Greed became the
drug that led many to the impossible conclusion that the
market could, and in fact would, continue setting new
highs forever, that we would become one via our wireless
Palm Pilots, that the Internet would provide a virtual
database of truth that would make us all more open,
diverse, and understanding, or at least would make us
all rich.

Rich. Therein lies the goal and the key
to our problems.

Contrary to high-sounding
mantras of connectivity, the bubble wasn't about
technology or its capabilities in making a better world.
It was about money. It was about more money and the
nearly universal belief that we would all be better off
with more money, a lot more money. This is the
fundamental notion of nearly every individual who
learned what is important by the time he was 5 years old
in every Western nation, and we in the U.S. are creator,
cheerleader and primary promoter of this Myth of

The Myth of More?
The Myth Of More (as
we term it in Credible Connections training. It looks
like this > = (:. The Myth of More is so endemic to
our culture that it is assumed true, even though all
evidence shows that once basic needs are met, money has
no long term impact on our happiness. Facts aside, we
are believers in more, and I have often fantasized that
the phrase "Greed Is Good" will one day replace "In God
We Trust" on our coinage, and since a federal court of
appeals yesterday ruled it illegal to ask students to
recite the pledge of allegiance in the classroom, it may
happen. "Greed is good" arguably could withstand
Constitutional scrutiny where "under God" could not, and
for sure it would more accurately reflect the nation's
belief, if not its character.

Or, perhaps that is
too general, or worse, too cynical.

Perhaps the
Average American isn't greedy, but just disappointed in
how things turned out. Maybe Joe American remains firmly
focused on family, friends, and lending a hand to those
in need. Perhaps Joe American isn't so interested in
becoming wealthy has he is concerned about growing
income inequality and the fact that those in the 90th
percentile, i.e., those earning $1,440 a week or more,
have seen their wages rise steadily since the early
1980's while the wages of those in the middle ($646 a
week) and at the low end ($307) have stagnated or lost
ground to inflation. That appeared to be changing for a
while, and from 1996 through 1999, the wages of all
three groups rose smartly and at the same rate. Then
suddenly, in the final months of 1999, the weekly wages
of those at the upper end pulled away again, leaving the
poor in the dirt. The wage spread between the high end
and the middle was $707 a week in the fall of 1999, it
had widened to $790 in this year's first quarter,
adjusted for inflation. The $83-a-week difference may be
a car loan payment or the extra cost of healthier food
or a heating bill that will keep a family warm. However
cut or interpreted, the upper end was given another leg
up in living standards, which is what makes income
inequality so divisive. It makes greed look all the
worse, but at the same time, all the more effective for
those who are greedy enough -- some folks we have been
reading about the papers who run or ran major

Perhaps Joe American isn't like the
high-profile few like Ken Lay at Enron, Worldcom's CFO,
Tyco's Ex-CEO Kozlowski, Martha Stewart, and the like
who have been portrayed on more than a little evidence
as greedhounds who will do anything for a buck, no
matter who it hurts or displaces. Maybe this kind of
rich, those who are deemed "wildly successful" by the
press until their indictments, do not represent Joe
American. And, if that is true, perhaps the greedhounds
have done an unintended service to America by exposing
themselves for who they are and what they lack --
honesty, character, and compassion. A good example are
the execs at Worldcom who yesterday announced they
intend to avoid bankruptcy by balancing the books on the
backs of their employees, putting 17,000 who knew
nothing of accounting fraud on the street in one fell
swoop. 17,000 families will have more to worry about
tonight than the tech bubble and investment results of
their 401(k)'s, all because some "wildly successful"
exec at the top couldn't tell the truth.

even while I hope Joe American is not a Ken Lay
wanna-be, I wonder. As I pass through malls watching the
grotesque effect of the marketing machine, sit in a
traffic jam of people stressing over being late, watch
workers who want to "get ahead" spending more time at
work than at home, all in the name of more, I am
reminded of those who lament how they got burned by "the
bubble," and "how great it would have been to get out at
the top and leave the other poor bastards to hold the
worthless paper."

It leads me to wonder whether
Joe American condemns the greedhounds, or whether he
wants to be more like them, or at least an unindicted
co-conspirator in the struggle for more.


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