Question for Discussion: What does Wall Street and the 1980's obsession with the Yuppie lifestyle tell us about American
society and culture in the last decades of the twentieth century?
Reading: Palmer, "The Yuppie Texts"; Kevin Phillips, "Graph of Growing Economic
Inequality" ; "A Rising Economy that Lifts only Yachts : Great Graphs of Increasing
Income Inquality" ; "How Unequal are We Anyway?" ; It's the Inequality, Stupid (See graphs); Our First Trillionaire: Only a Matter of Time ; Trickle-up Economics: The World Will Have 11 Trillionaires; Roger Ebert, "Review of Wall Street" ;
Kempley, "Review of Wall Street"
Video: Forbes 20015, list of Billionaires
of Wall Street (1987)
President Reagan's Economic
Wall Street and the Temptation of Riches
- YouTube: Family Ties - Pilot
- Don Henley's The End of the Innocence (1989) -- lyrics
- See You Tube: The End of the Innocence
- Buying and Selling Stock: Buy Low & Sell High
- How does the Bluestar Leveraged Buyout (LBO) work?
Leveraged buyout - Wikipedia
- Gecko borrows the money to buy out Bluestar with short-term financing from the banks. Because he has to pay most of it back in 6 months, he has to sell all of Bluestar's assets.
The sale of these assets will pay the loans back. Gecko walks away with $70 million in Bluestar's overfunded $75 million pension fund. And, of course, Bluestar Airline is liquidated and all its employees lose their jobs and their pension funds. They all get screwed and Gecko and Fox walk away with tens of millions of dollars. The term used here is "breaking up the company" or "wrecking the company".
- The Ivan Boesky Case
- Den of Thieves: James B. Stewart -- Insider trading in the 1980s:
A number-one bestseller from coast to coast, Den of Thieves tells, in masterfully reported detail, the full story of the insider-trading scandal that nearly destroyed Wall Street, the men who pulled it off, and the chase that finally brought them to justice. Pulitzer Prize winner James B. Stewart shows for the first time how four of the biggest names on Wall Street -- Michael Milken, Ivan Boesky, Martin Siegel, and Dennis Levine -- created the greatest insider-trading ring in financial history and almost walked away with billions, until a team of downtrodden detectives triumphed over some of America's most expensive lawyers to bring this powerful quartet to justice.
- YouTuble: SEC Goes After Billionaire Hedge Fund Tycoon
- The Cohen Connections (See list of Criminals)
- After Scandal, SAC Capital Begins to Fade to Black
- Billionaire arrested over $22m insider trading scam:
Mr Bharara, whose office has jurisdiction over some of the world's biggest financial firms, said investigators relied on wiretaps to build a case against Mr Rajaratnam and former directors of a Bear Stearns hedge fund.
Mr Rajaratnam faces 13 fraud and conspiracy charges, many of which carry 20-year maximum sentences. Under federal sentencing guidelines he faces 10 years in prison..
- YouTube: SAC Capital to Pay $616 Million in Insider Trading Cases
- Bernie Madoff's $50 Billion Ponzi Scheme - Forbes
- The Madoff affair: Con of the century | The Economist
- Wall Street and the Yuppie Nightmare of Losing it All
- The Short, Happy Life of the Yuppie
- American Psycho (2000) -- the Wall Street Trader as Serial Killer
all right, I want you to know that,
I think greed is healthy. You can be greedy
and still feel good about yourself."
Boesky, speaker at the School of Business
Administration, University of California, Berkeley; later
sentenced to three years in federal prison.
"Wall Street is about Yuppie's temptation. Are you really so much better off for making all that money and winning at all costs. Is money, wealth, and power worth the loss of our self-respect, dignity, character, and our humanity? Can we really,
as Boesky argues, still feel good about ourselves, knowing
what we had to do to reach the top of this social darwinian
Chris Lewis, Ph.D.
"What's intriguing about "Wall Street" - what may cause the most discussion in the weeks to come - is that the movie's real target isn't Wall Street criminals who break the law. Stone's target is the value system that places profits and wealth and the Deal above any other consideration. His film is an attack on an atmosphere of financial competitiveness so ferocious that ethics are simply irrelevant, and the laws are sort of like the referee in pro wrestling - part of the show. "
...Roger Ebert, Review of Wall Street
Gordon Gekko : "The richest one percent of this country owns half our country's wealth, five trillion dollars. One third of that comes from hard work, two thirds comes from inheritance, interest on interest accumulating to widows and idiot sons and what I do, stock and real estate speculation. It's bullshit. You got ninety 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, peace, famine, upheaval, the price per paper clip. We pick that rabbit out of the hat while everybody sits out there wondering how the hell we did it. Now you're not naive enough to think we're living in a democracy, are you buddy? It's the free market. And you're a part of it. You've got that killer instinct. Stick around pal, I've still got a lot to teach you.
Gordon Gekko : "The point is ladies and gentlemen that greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit. Greed, in all of it's forms - greed for life, for money, knowledge - has marked the upward surge of mankind and greed - you mark my words - will not only save Teldar Paper but that other malfunctioning corporation called the USA. Thank you."
- Palmer on the 1980s Yuppie
- Palmer on Gekko's Greed Speech
- The Taunt of Yuppie as Failure
- The Yuppie's dilemma: Economic Insecurity and the Survival of the Fittest
- John Stewart Rips GE over Taxes and NBC
- Understanding Wall Street's Temptation to Commit Fraud
- Corporate Crimes and Stock Manipulation in the early 2000s
- The Biggest Wall Street Insider Trading Scandals
- Michael Lewis, The Big Short: Inside the Doomsday Machine
- Flash Boys: A Wall Street Revolt by Lewis, Michael (2014)
- Behind the Cover Story: Michael Lewis on Complexity and the Rigging of Wall Street
- High Frequency Trading and Predatory Markets (2013)
The Social Darwinian Struggle for Wealth
- See Forbes 20015, list of Billionaires (2015)
- Video: Forbes 20015, list of Billionaires
- Our First Trillionaire: Only a Matter of Time |
- Video - World Likely to Have 11 Trillionaires Within Two Generations
- Trickle-up Economics: The World Will Have 11 Trillionaires
The richest 85 people in the world have as much wealth as the poorest 3.5 billion – or half the world's entire population – put together
- What were the Causes of the 2008 Financial Collapse?
- Spitzer, The Regulatory Charade (2009)
- WATCH: Buffett's Former Heir Apparent Defends His Controversial Trade
- Korten, The Edmunds Fallacy (in-class)
- Plutonomy, Part 1: 2006 Citigroup Report:
- Plutonomy, Part 2 -- The Rich getting Richer: 2006 Citigroup Report:
- Plutocracy Now: It's the Inequality Stupid (Great Graphs on Increasing Inequality)
- 20 Facts about U.S. Inequality that Everyone Should Know
- Food First: Adjusting America (See the Third Worldization of America)
- Kevin Phillips,"Graph of Growing Economic Inequality" (in-class)
- "A Rising Economy that Lifts only Yachts : Great Graphs
of Increasing Income Inquality
the Pie is Sliced: America's Growing Concentration of Wealth (1995)
- The Democracy of Weatlh
- The Decline of the American Dream
- "How Unequal are We Anyway?"
- U.S. Inquality Gap Widest since 1929 (in-class)
- Two Decades of Extraordinary Gains for Affluent Americans (in-class)
- The Third Worldization of the U.S.
Corporate Fraud and Wall Street Scandals
- Debating Globalization after the 2008 Financial Collapse
- Most Companies Paid No Taxes during the Boom
- The 2002 Corporate Scandal Sheet
- The Tech Bubble Burst: 2002
- U.S. National Debt Clock
- U.S. NATIONAL DEBT CLOCK FAQ
- U.S. National Debt: 1940-2005 graph (in-class)
- Bush's 10 Trillion Borrowing Binge
- U.S. Could be Going Bankrupt
- Bello, The Third Worldization of America
- Total Financial Losses in the 2008 Financial Collapse, page 2 (in-class)
- Watchdog Sees Huge Bill for Banks Bailout (Oct. 2009) (in-class)
- Prins, Real Costs of the Bailout (in-class)
- Graph of Bailout Costs versus the New Deal (in-class)
- Uncle Sam, the Enabler: How the Investment Banks screwed
the Government and Taxpayers (in-class)
- 5 Ways the Government used our Money to Save Big Banks and Screw Us
- Government bailouts of the Financial Markets 1982-2008 (in-class)
- Simon Johnson, The Quiet Coup (in-class)
- Bailout Recipients spent Millions on Lobbying (in-class)
"The banks lobbied Washinton so they write the rules that got us into this crisis. They then lobbied Washington to get the money to bail them out. And now they are lobbying Washington to write the rules so they get us into the next crisis. It's perfect circularity. I look at it as more a question than an answer: Who owns this process?"
Elizabeth Warren, TARP Congressional Watchdog
Bello, The 'Third Worldization' of America
The double squeeze by corporate America and Republican Washington, in fact, forced Americans to give back quite a bit. The 1980s ended with the top 20 per cent of the population having the largest share of total income, while the bottom 60 per cent had the lowest share of total income ever recorded. Indeed, within the top 20 per cent, the gains of the Reagan-Bush period were concentrated in the top one percent, whose income grew by 63 per cent between 1980 and 1989, capturing over 53 per cent of the total income growth among all families . Meanwhile, the bottom 60 percent of families actually experienced a decline in income. (Bello, 95)
The trends revealed a middle class that was losing ground. Median family incomes for 1990 and 1991 dropped to their levels of the late 1970s when adjusted for taxes and inflation.36 ( Bello, 95)
Indeed, structural adjustment Republican-style was beginning to give the U.S. a Third World appearance: rising poverty, widespread homelessness, greater inequality, and social polarization. (Bello, 97)
For the most part, US corporations are meeting the competitive challenge of the 1990s by continuing the strategy of the 1980s: throwing off workers at home and hiring cheap labor abroad. (Bello, 103)
The 1980s, then, saw a process of corporate-driven global adjustment, which encompassed the US economy. Ideologically trumpeting the free market but in practice advancing the interest of corporate monopolies, the Reagan and Bush administrations presided over the dismantling of the New Deal state, the depression of living standards, and the destruction of workers' protections.( Bello, 104)
Structural adjustment, liberalization, privtalization, deregulation--these were the key thrusts of corporate America's effort to create a global playing field whose rules would favor its version of capitalism and hobble the opposition. (Bello, 104)
Hertzberg, The Short, Happy Life of the Yuppie
"To all appearances, yuppiedom seems to be still thriving. But the yuptowns of our coastal cities, where one is seldom more than a few blocks from a designer ice-cream outlet or a branch of Banana Republic, have been overbuilt by speculators gripped by the delusion that trend lines never change direction. The gleaming, empty towers of yuppiedom betoken not prosperity but imminent collapse. "
"Political intimations: yuppiedom is essentially a phenomenon of the Ronald Reagan era, inextricably tied to the values, follies, and peculiar conditions thereof. The word yuppie shot from obscurity to ubiquity during the 1984 presidential campaign and became associated with the two politicians who squeezed Walter Mondale 's head like the tongs in an Excedrin commercial, Gary Hart and Reagan himself."
"Everybody agreed from the start that a yuppie had to be a baby boomer, one of the seventy million Americans born between 1946 and 1964. Beyond that, the category was, and is, played like an accordion. If yuppies are people who make $40,000 or more, live in cities, and work in professional or managerial jobs (the high end of Newsweek's several definitions), then there are only about a million and a half of them. If they are just baby boomers who went to college, live in metropolitan areas, and work in offices (the low end), there are more than twenty million."
"Yuppie promptly went into a moral free fall that continued long after Reagan was re-elected. In a Roper Poll taken in 1985, which found that 60 percent of adult Americans knew roughly what yuppies were (an impressive total, considering, for example, that only 34 percent know who is Secretary of State), six times as many people thought yuppies were "overly concerned with themselves" as thought they were "involved in working for the betterment of poor people." When a half-dozen young go-go Wall Street investment bankers—prototypical yuppie heroes—were indicted for insider trading in the wake of the Ivan Boesky scandal, yuppiedom's descent into moral squalor was complete in all eyes but its own. That was accomplished by the crash, which brought yuppies face to face with something worse (in their eyes) than dishonor: failure."
"Hippies thought property was theft; yuppies think it's an investment. Hippies were interested in karma; yuppies prefer cars. Hippies liked mantras; yuppies like manna. Still, yuppiedom carried over from hippiedom an appreciation for things deemed "natural," an emphasis on personal freedom, and the self absorption of that part of the counterculture known as the humanpotential movement."
"In the preppy variant of snobbery, material objects —the clothes, the cars—were implicitly viewed as the outward signs of an innate superiority. In the yuppie dispensation, status was conferred by the objects themselves. One no longer had to he part of a class to acquire artifacts of that class. This was a logical result of the commercialization of bohemia and the reduction of "good taste" to a series of tidy, standardized formulas pioneered by New York magazine and eagerly picked up by the whole of the upscale press. Status became a commodity; sensibility became something that could be ordered out of a catalog. In the final nightmare. the Beatles "Revolution" was sold to be used as a jingle in an athletic shoe advertisement, and the Byrds ' version of Pete Seeger ' s ` Turn, Turn, Turn, " was auctioned off for similar humiliation at the hands of a newsmagazine."
"The premise of most of what has been said, written, filmed, and broadcast about yuppies goes like this: The Yuppie is emblematic of his time and generation. He is a synecdoche—the part that stands for the whole. In a time of prosperity, boundless opportunity, soaring hope, et cetera, he is the vanguard, the leading edge. He is like everybody else, only more so. We're all doing well; he's just doing a little bit better. He is simply a sharper, more dramatic instance of a trend that is general throughout the society. Therefore he is a fitting symbol of his age."
"During the decade between 1973 and 1984—the decade that ended by spitting out the word yuppie—the median American family saw its income drop from $28,200 to $26,433 (measured in 1984 dollars, as are all these examples). At the same time, the proportion of Americans classified as poor grew by nearly a third.
. That's nBut who cares? The poor and the average are species yuppies scorn. What about our heroes? Well, the very rich got very much richer, but even people in yuppie income brackets had their problems. In 1973, families in what economists call the highest "quintile"—that is, the top fifth—were earning a mean average income of $68,278. In 1984 they were making less—$66,607, to be exactothing to hold a telethon over, of course, especially when the income of the poorest quintile was dropping at the same time from $9,136 to $7,297. But it 's not the bonanza suggested by all the fuss about yuppies, either. It's stagnation."
Yuppie as a Taunt of Failure
"But if upwardly mobile means you live better than your parents did and you're sure your children in turn will live better than you—the American Dream is another name for this —then no. The vast majority of those tagged yuppies by the media have been heading down, down, down for more than a decade, and the worst is yet to come. The very word yuppie is a taunt, a lie, a fraud: insult added to injury.
"Shout out: Who killed the Yuppie? The answer is, It was you and I. We turned him into an effigy, and then we hanged him. He became the collective projection of a moral anxiety. We loaded onto him everything we hated about the times we had been living through—everything we hated about what we suspected we ourselves might have become. We made the Yuppie the effigy of selfishness and self-absorption, of the breakdown of social solidarity, of rampant careerism and obsessive ambition, of the unwholesome love of money, of the delusion that social problems have individual solutions, of callousness and contempt toward "losers," of the empty ideology of winnerism and the uncritical worship of "success." Then we strung the little bastard up."
Palmer on the 1980s Yuppie
.... [T]he text of urban yuppie materialism also exhibited a neo-conservative style fostered by Reaganomics. The yuppie drives to make large amounts of money quickly, to succeed in a ruthless competitive world, to acquire the most expensive material goods, to spend rather than save, to party extremely hard as a reward for working extremely hard, to sacrifice (especially human relationships) for one's job, mirrored the Reagan administration's deficit spending policies and hi-tech defense system acquisitions. Eighties yuppies saw their ruthless competitive work ethic and their consumptive materialism as hedges and buffers against an increasingly unstable terrorist- and nuclear- and deficit-threatened world. Yuppie ness became a form of protective coloration against the economic and status threats from ethnic minorities and the poor, from a questionable national economy, from an increasingly competitive world. Yuppies saw themselves as a uniformed cavalry circling the wagons around what was left of the American dream, that dream's material icons, the job with a chance for betterment, the house....,the car, the status goods, perhaps even a controlled and economically justified family. The films of the eighties were acutely aware not only of the stereotypes and accoutrements of the yuppie lifestyle but also of the insecurity of the dying American dream."
Palmer on Gekko's Greed Speech
Wall Street (1987) is the ultimate film text of the workplace battlefield. It inventories the ammunition that loads up the yuppie dream, tracks the quick and easy money that fires that dream off. In Wall Street, Gordon Gekko (Michael Douglas), microphone in hand and working the room like a rock star, addresses a corporate stockholders' meeting and delivers the Gettysburg Address of the yuppie philosophy:
Gekko's speech, his preposterous paean to greed, rings with a kind of evangelistic fervor. It is delivered in a setting similar to the UBS stockholders' meeting in Network presided over by the snakelike Frank Hackett (Robert Duvall) and the charismatic corporate evangelist Diana Christiansen (Faye Dunaway). In his address, Gekko offers an absolution to all the yuppies in the audience who are suffering guilt over their materialism. Though addressing the shareholders of Teldar Paper, a corporation he is raiding, Gekko begins his Sermon on the Mount by defining how the American dream has turned into a nightmare due to bad management. For Gordon Gekko, America is no longer an idea, it is merely another large corporation being mismanaged by bureaucrats and suffering from cash flow problems. Gekko uses the nation as a macrocosmic metaphor for Teldar and offers his panacea for the problems of both troubled corporations, greed. Greed, one of the Seven Deadly Sins, takes on moral stature (it is "good" and "right"), pragmatic efficiency (it "works"), rhetorical power (it "clarifies" and "cuts through and captures the essence"), and progressive force ("it marks the upward surge of mankind"). Greed, literally, becomes a savior for both Teldar Paper and for the USA, and Gekko's speech becomes a fervent absolution of the yuppie angst that clouds the hardhearted decision making of corporate raiding. "
Well, ladies and gentlemen, we're not here to indulge in fantasy, but in political and economic reality. America. America has become a second rate power. Its trade deficit and its fiscal deficit are at nightmare proportions. . . . Today, management has no stake in the company. . . . You own the company and you are being royally screwed over. . . . Well in my hook you either do it right or you get eliminated. In the last seven deals that I have been involved with, there were 2.5 million stockholders who have made a pre-tax profit of 12 billion dollars. [applause] Thank you. I am not a destroyer of companies; I am a liberator of them. The point is, ladies and gentlemen, that greed, for lack of a better word, greed is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit. Greed, in all its forms, greed for life, for money, for love, for knowledge, has marked the upward surge of mankind and, greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA. Thank you very much.
1. Is Gordon Gekko's larger goal
the money he makes on his deals or making the deal and beating someone
else out of their money?
much is enough?
Gekko: It's not a question of enough, pal. It's a zero sum
game, somebody wins, somebody loses. Money itself isn't lost or
made, it's simply transferred from one perception to another.
2. Is Gordon Gekko like Donald Trump,
who wrote in his autobiography, The Art of the Deal, "
that money no longer interests him very much....[I am] more
motivated by the challenge of a deal and by the desire to win."
3. What does Gordon Gekko mean
in his speech to the Teldar board when he say: "The point is,
ladies and gentlemen, that greed, for lack of a better word, is
good. Greed is right. Greed works."
4. Why is Bud Fox so attracted
to Gordon Gekko? Why does he want to be a player?
Gekko: I'm gonna make you rich, Bud Fox. I'm talking about liquid. Rich
enough to have your own jet. Rich enough not to waste time. Fifty,
a hundred million dollars, buddy. A player. Or nothing.
5. Why do "players"
need to wear good suits, own fancy high-rise apartments, own the
best artwork, and generally flaunt their wealth? These are
the same characteristics associated with Yuppies. What does
this tell us about the Yuppie stereotype?
6. Does Gordon Gekko earn his money
honestly? If he uses "insider information" to buy
stocks that are sure things, is he really playing by the rules?
Is Wall Street (1987) suggesting that stock speculators
like Gekko are sharks feeding off the gullible average investor
and mismanaged corporations?
7. Why does Bud Fox keep telling
his father to get a better suit? Why is dress so important
8. How does Wall Street illustrate
what William Palmer calls "the yuppie drive to make large amounts
of money quickly, to succeed in a ruthless competitive world, to
acquire the most expensive material goods, to spend rather than
save, to party extremely hard as a reward for working extremely
hard, to sacrifice human relationships for one's job"?
9. Why are yuppies like Bud Fox and
Darien Taylor willing to give up or risk their personal relationships,
their emotional integrity, and their characters for money and power
and social status?
10. Why does Bud Fox turn against
Gordon Gekko in the end? Does he side with his father's principles
of character, integrity, and honor over Gekko's obsession with money
and power at any cost?
11. What does Bud Fox mean when
he tells Gordon Gekko that no matter how hard he tried he couldn't
become Gordon Gekko because he was still just Bud Fox?
12. When Bud Fox turns against
Gekko, Darien tells him that Gekko will destroy him and take everything
he has. Is this the ultimate yuppie nightmare that money,
success, power, and status will be pulled out from under them despite
what they do?
13. Did Gekko really expect Bud
Fox to stand by while his father's company, Bluestar Airlines, was
bought and sold off into pieces so that Gekko could make a killing?
14. Is the American economy described
by Gordon Gekko really a social darwinian "survival of the
fittest" world in which the strongest prey on and destroy the
weak and innocent?
Gekko: The richest one percent
of this country owns half our country's wealth, five trillion dollars.
One third of that comes from hard work, two thirds comes from inheritance,
interest on interest accumulating to widows and idiot sons and what
I do, stock and real estate speculation. It's bullshit. You got
ninety percent of the American public out there with little or no
net worth. I create nothing. I own.
15. One of the larger yuppie
fears portrayed in Wall Street is the fear that if you're
not a player, if you're not on top of the money game, then you will
be one of the losers, one of a great mass of Americans who are being
screwed by the players and the money men. Is this why Gordon
Gekko tells Bud he can either be a player or be nothing?
16. Bud's father, Carl Fox, says: "Stop
going for the easy buck and start producing something with your
life. Create, instead of living off the buying and selling of others."
Is Bud Fox afraid that the only way to make it is to become a player
because the only way to really make it in this world is to "live
off the buying and selling of others"? If you're not
preying on others and exploiting others weaknesses, then you are
just one of the prey for the stronger, more ruthless players.
17. Why is money and power so
much more attractive to Gordon Gekko than love, family, and emotional
and psychological integrity? Does Gekko see love and emotional
relationships as weaknesses?
18. Does American society really value
those who work hard, produce,
and create even though most of these
people are not wealthy, powerful,
and socially prominent?
Why are Americans so fascinated with wealthy
men like Warren Buffet and Donald Trump?