What do you call 12 bankers at the bottom of the ocean?
See below. But it's no joke that U.S. bankers are being depicted as rapacious swine. Even after the global crisis they're doing everything in their power to stymie reforms.
At the Annual Summit for Terrorists last month, held this year in London, all the biggest names in the British branch of the international terrorist network were on hand. As is the custom among murderous guerrillas, they shared ideas on how to bring down the global economy, how to steal everything not nailed down from the people of the Western democracies, and how to destroy the developed world once and for all.
Not for them grease-stained cracked hands grimly gripping submachine guns, or bandages made of rags urgently applied in some dank cave. No, these terrorists snacked fussily on shrimp cocktail and caviar, sipping champagne while discussing their evil plans. They were not garbed in greasy turbans and faded robes but in tuxedos, and instead of ratty beards, their chins gleamed like babies' bottoms.
In fact, they weren't terrorists at all. They were bankers, guests at the annual Guild of International Bankers ball. But they felt they might as well be terrorists.
"It seems to me that to most people in this country, an invitation at this time to the Annual Banquet of the Guild of International Bankers might just rank alongside an invitation to the Annual International Conference of Al-Qaida," remarked Lord Peter Levene, former chairman of Lloyd's. In a widely quoted address, he decried the "hysteria" about bonuses, but added poignantly that bankers should be asking themselves "where did it all go wrong?"
Levene isn't alone in feeling beleaguered. Mounting hatred of bankers and anything "financial" is a global phenomenon. From heroes of capitalism and knights of the free market, financiers have come to symbolize the sickness of the system and are blamed for its collapse. They're the target of protest movements everywhere. Politicians rage at the chutzpah and irresponsibility of bankers rescued in 2008, who promptly began to wail at efforts to tighten regulation and to help themselves to bonuses while about it.
In Greece, hatred for bankers has turned violent. Three bank workers died after an arson attack at their branch.
It isn't easy to be a banker these days. Europe is collapsing, the United States is stagnating, the global economy is in danger, the markets have gone mad, profits are down, bonuses are shrinking, and demonstrators are calling for bankers' heads. Best-selling books and movies like "Too Big to Fail" depict bankers as irresponsible rapacious swine who would sell democracy and its mother without blinking.
Who, me as evil as Hitler?
You can't say bankers didn't earn the opprobrium. The irresponsible, avaricious behavior in the sector as a whole reduced the global economy to its knees. Millions have lost their jobs in the worst downturn since the 1930s and millions more lost their homes. And to add insult to injury, the bankers generally got off scot-free, not even giving an accounting of their sins.
The banks they led to the abyss received trillions of dollars from the taxpayer, who saw his income shrink while he had to shoulder soaring government spending to rescue financial institutions considered too big to fail. Meanwhile, while the taxpayers groaned, the bankers revved the bonus machine back up.
But even barons of finance unfamiliar with showers of love don't remember the last time the hatred was so pervasive. Even Republican presidential hopefuls like Newt Gingrich have distanced themselves. Suddenly, like money changers in the Middle Ages, they're lepers.
In November, at the height of the Occupy Wall Street protest, Food Network celebrity chef Mario Batali snarled to Time Magazine that bankers were as evil as Stalin or Hitler in their takeover of the planet. Those financiers, having made Batali who he is by eating at his restaurants, promptly boycotted him and he apologized. But the barb sank deep.
Once admired, finance workers were glorified in film like "Wall Street" - once Ivy Leaguers could think of no better destination for their stratospheric IQs than banks, hedge funds and the like. Today the party continues and the bonuses are flowing, but the dancers are vilified as robber barons at best and common thieves at less best. Bill Maher summed up the sea change by urging us to hang the bankers.
It didn't help that research found disturbing similarities between bankers and psychopaths: If 1% of the American population are psychopaths, this number is 10% among finance workers, social psychologist Robert Hair postulated in the Financial Times. Psychopaths may be charming but they're aggressive and self-centered; they're manipulative and thrill-seeking. In other words, they're born brokers and traders.
The loathing is visceral and worldwide. In Britain, the CEO of the Royal Bank of Scotland, Stephen Hester, had to forgo his annual bonus. Two days before the Queen stripped his predecessor, Fred Goodwin, of his knighthood because of his role in the British banking crisis. Until then only criminals had lost royally bestowed honors. Labour Party leader Ed Miliband is calling for tax on bankers' bonuses, and former Lord Mayor of London Ken Livingstone remarked that bonuses in the banking world are like "penis extensions."
In France, socialist presidential hopeful Francois Hollande named finance as his "greatest enemy."
What's the best way to rob a bank?
Israelis haven't gone heavy on the banker-blasting. None have been crowned the emblem of evil. Even when Israeli bankers stood out for malfeasance, for instance after the bank-shares scandal of 1983, Israelis just shrugged. The pet peeve in Israel these days is the tycoons.
Prof. Amir Barnea of the Herzliya Interdisciplinary Center thinks that's because unlike the United States and Europe, Israel weathered the financial crisis unscathed and banks here didn't need help. Nor did they destroy the economy, he points out.
James Kwak, law professor at the University of Connecticut, Harvard research fellow and founder of The Baseline Scenario blog (with Simon Johnson ), explains that the adulation of financiers helped create the legislation that benefited them so profusely in the 1990s. Interestingly, since their popularity evaporated, bankers have stopped donating to Democrats: They focus on the Republicans, which as a party has not repudiated them, Kwak says.
To understand the anger, we need to understand the roots, says William Black, economist, former regulator, University of Missouri-Kansas City professor, and fierce critic of the financial system.
Bankers were the ultimate rock stars before the crisis, he says. America became obsessed: Where once the television at the barber's had been on sports, now it's on CNBC. Everybody wanted to get rich quick. The anger lies in the era bankers convinced the people that they could do no wrong, he says.
Black knows bankers. His former jobs include litigation director of the Federal Home Loan Bank Board and deputy director of the Federal Savings and Loan Insurance Corporation. He exposed mountains of rot in the system that led to the savings-and-loan crisis. He also helped put thousands of bankers in jail.
He's also the one who quipped, "The best way to rob a bank is to own it," which has become a slogan for the protest movement.
From expelling the money-changers to vampire squids
Hatred for bankers wasn't born in this slowly unfolding crisis. It began in the days of yore and was to a degree anti-Semitic and religious in origin. Christianity despised money as the root of all evil; note the expulsion of the money changers from the Temple. In the Middle Ages minorities, notably Jews, were forced to engage in finance since they weren't allowed into "respectable" professions. Kings and other rulers wanting more tax or to ignore their debts found anti-Semitic sentiment a great convenience. In "The Divine Comedy," Dante relegated usurers to the seventh circle of hell, together with vicious criminals.
Moving on to Islam, the Prophet Mohammed prohibited lending for interest, let alone at exorbitant rates.
With the stunning success of the phony "Protocols of the Elders of Zion," the Rothschilds came to symbolize the loathed "international bankers" who secretly controlled the world and destroyed its economy in 1929. Hitler and the Nazi propaganda machine also did well at exploiting the Jewish identity of big bankers and whipped up hatred of banks. (Hitler used Swiss bankers. )
In the Great Depression, bankers were so hated that robbers like John Dillinger and Bonny and Clyde became folk heroes. Runs on banks led 11,000 to collapse.
The big bankers of that era - John Rockefeller, the Lehman brothers and J.P. Morgan - survived, but that was also when the term "bankster" - banker/gangster - was coined.
Today's wave of odium mushroomed on foul soil: the global crisis. In 2009 Rolling Stone magazine's Matt Taibbi accused the "vampire squid" (otherwise known as Goldman Sachs ) of causing and bursting all the financial bubbles in the last 100 years. Bernard Madoff, Ponzi-schemer extraordinaire, also came to symbolize everything sour in the system.
This crisis has been the finest hour of conspiracy theorists. Online zeitgeist films call on the people to shake off the regime of the "international bankers." The fact that the bankers have not been punished, have not apologized, have resumed giving themselves creamy bonuses and have thrown their gigantic resources behind crushing reforms fanned the fires of hatred even more.
The question is whether the present rage will have results. It didn't in 2008 or 2009.
The Dodd-Frank reform of the U.S. financial system promised much and delivered bupkes as the banks emasculated every idea, including the Volcker amendment that would have prohibited them from trading on their own behalf. In 2010, off the record, U.S. Treasury Secretary Tim Geithner - himself a Goldman grad - called the Wall Street bankers "ministers of war," but that's about it.
Nobel laureate Paul Krugman has urged time and again that the culprits who caused the crisis be put behind bars, writing in November that the guiding principle of U.S. financial policy seems to be "go easy on the bankers."
Who dunnit? The giant leech. Who should fix it?
"I don't like bankers but I think we've gone too far," Kwak says, qualifying that his dislike isn't personal. The ones to blame are politicians because it's their job to take care of the public interest. The companies were just doing what companies do; it's the system, where money played such a huge role, that was to blame, Kwak says.
Also, bankers don't get into the game to do evil, he adds. The banking system hires go-getters who want to make money. Put a bunch of people like that together and a system to maximize profit and that's what they'll do, not thinking of the social implications, Kwak explains.
The financial system has become too big and predatory and isn't fulfilling its basic functions. Wall Street is a symbol of everything wrong in the United States - people making a lot of money from things that do no good. But blaming Wall Street for all America's ills is overdoing it, he sums up.
What's to blame? Overdone tax cuts, which exacerbated inequality. The sorry state of education. Yes, the financiers and Wall Street caused the crisis - and the bankers may have wanted the tax cuts - but it was George Bush who enacted them into law, says Kwak.
Black doesn't buy that bankers are hated. "We aren't seeing people with pitchforks chasing bankers," he points out. "They aren't being hanged." Also, only a small minority of bankers are corrupt, he says. During the S&L meltdown in the 1980s, only 1 in 10 were rotten, and at the ordinary banks, the figure is 1 in 100.
Banks were supposed to be small and efficient and to help the real economy. They were supposed to be humble brokers. The problem is these brokers grew and grew and turned into a parasite, a leech sucking the life's blood of the real economy, says Black.
Also, people are furious that banks were the first to recover from the crisis (in part thanks to bailouts ) and are back making profits while the Western economies quake and millions are losing their jobs, says Kwak.
Some try to alleviate their bitterness using humor, if borrowed from the genre of lawyer jokes. Q: What do you call 12 bankers at the bottom of the ocean? A: A good start.
Nasty regulators invade Poland
Molly Katchpole, 22, from Washington, didn't care about the history of financierphobia. She had just graduated from college and held down two jobs to make ends meet. When she heard that the Bank of America, which needed a $45 billion bailout in 2008 and 2009, planned to impose a $5 fee on debit cards of its smallest clients (with no mortgage or less than $20,000 in their accounts ), she lost it.
She uploaded a petition to the website change.org and found she'd struck a nerve; in no time she had 300,000 signatures. Then she went to her local branch with the petition in hand, closed her account and cut up her credit card in front of the cameras. Thousands followed suit and finally the biggest bank in America capitulated and canceled the fee.
Katchpole represents a profound change, way beyond signs and slogans. The worldwide protest has changed the debate, including in the run-up to the U.S. presidential election. Terrified of reforms by candidates trying to curry favor with the voters, banks have been blitzing any plan to reform the sector. They don't even like the plan to reform the credit rating agencies whose bum ratings helped create the credit bubble that preceded the global collapse.
The bankers will probably prevail over the regulators. They have tremendous resources and are heavy donors to election campaigns. But they have zero chance of winning over the people, and that's at best.
The bankers are hurt and outraged. Jamie Dimon, CEO of JPMorgan Chase, thinks it's unfair. Anti-bank sentiment is "just a form of discrimination that should be stopped," he said at Davos this year, and he's mild compared to his peers. In August 2010, Stephen Schwarzman, co-founder and chairman of Blackstone, shared his opinion of U.S. President Barack Obama's plan to raise tax on private investments: "It's a war. It's like when Hitler invaded Poland in 1939." Obama has folded on that issue.
A former Lehman executive mourned that former pay levels would probably never return and that the "fun is gone." He can't understand the Occupy Wall Street movement because "nobody's making money anymore .... Even when they cut our pay from a million dollars to $500,000 they think we're making too much."
This month a Rhode Island radio station reported about a banker who, instead of leaving a tip for the waitress after a $133 meal, left her a note: "Get a real job."