A cold beer can sat sweating on the arm of my chair while I crunched away on some life-threatening junk food, Cheetos, Doritos, Lipocitos, whatever, I don’t recall. Like millions of normal American guys, I was stuffing my gut, getting half shitfaced, plopped in front of the TV watching pro football–your stereotypical macho slob. Who won, who was playing, what morons blabbed at halftime, I don’t recall either. But I DO remember a jolt when, all of a sudden, a huge black bull crashed onto screen, running through China shop. Damn near knocked the beer can off the chair. It was Merrill Lynch’s bull, being bullish on America, and the big sucker kept on crashing into football games and other events for the better part of the next three decades.
That bull bothered me then, and he’s bothering millions of others now, while his big balls steam in a bloody pile on the floor of the Wall Street trading pits and he’s been ground into hamburger for Bank of America and the naked emperors of capitalism are trying to cover their own dangling privates with shreds of his hide.
The bull didn’t just crash into our TVs back in the ’80s. He crashed through a wall that separated many of us ordinary dudes from Wall Street. He crashed out of the TV into living rooms and rec rooms. He crashed right smack into our skulls. He got shlubs like me thinking maybe we too could be bull-balled capitalist studs who’d play the market and make big bucks without working a lick. All we had to do was hand our hard-earned loot to his posse of ranch bosses, and let them ride him into the high stakes rodeo of greed. Yeeee-haaaa!
There was a truly religious quality to this modern worship of the golden calf disguised as a black bull. The business media sounded as blissed out as a snake-handling fundamentalist zealot speaking in tongues. “While extolling the risk-taking investor symbolized by the bull,” noted the New York Times back in 1989, “the commercials close with the slogan the company introduced last year, ‘A tradition of trust.’ ” Describing one commercial, the author rhapsodized: “In ‘Skies,’ . . . a bull marches silently across a plain, while in the sky above him a century’s worth of images glide by, from biplanes and doughboys to Iwo Jima and Yalta to Solidarity and the space shuttle.” Noting another commercial link between the bull and sky god images, the Times went on about how “the camera pulls back from a simple slice of life–a mother sending her child off to school–to present the scene in an ever-wider context, showing in turns aerial views of their block, neighborhood, town, state, nation and planet. In the end the globe turns out to be a reflection in a bull’s eye.” Yes, the bull’s eye is the eye of God. The cow god of ancient pagans hath become one with the invisible god who seeth all. This incredible religious merger would surely have astounded the ancient Israelites.
So it wasn’t long before some guys were as concerend about the stock market and their investment profile as about the Steelers’ Steel Curtain or Al Davis’s evil genius or the Detroit Lions’ string of hapless quarterbacks. After the latest tale of how somebody made a killing on a stock, and we all got more bullish, pawing the dirt, dreaming that we too could win big in the market casino.
This was something new for many individuals. A lot of us working class kids born in the ’40s or ’50s had been raised with a healthy contempt for guys in suits who made money gaming the stock market. They didn’t do honest work, like our dads did. Our dads wouldn’t worry if GE or Monsanto dropped by 3 points. They didn’t even read the business section or squint at the tiny print in the stock market listings. That sort of scholarship belonged to a whole different realm. Our dads studied car repair manuals and fix-it books, and their business concerns were much more immediate. Like would they get a raise from the factory? Or would they get laid off? Would the boss’ worthless son come in and make their job unbearable by mucking up the stores, lumber yards, and construction companies where they worked? Would the guys in suits diddling with the commodities market cause corn prices to drop, or would you farmer dad lose his shirt because a surplus drove prices down?
But after the bull crashed in, we started to cosy up to the suits. It was as if Alan Greenspan, in full business attire, dropped by during the football game, brushed your Cheeto dust off the couch and sat down and started discussing your stock portfolio. Some of us got so caught up with the idea that we were capitalist players ourselves that we let the guys in suits slip through new laws and deregulations that made it much easier for them to buy, sell, trade, loan, hedge, leverage, and, alas gouge, cheat, and steal. Some of us seriously entertained the idea of turning Social Security over to these wizards.
It was dangerous enough that we got caught up in the fantasy that what was good for stockbrokers was good for America. But something even worse was happening. We discovered an even quicker, less risky way to make money than the stock market. We found out we could make a fortune on real estate–on our own homes. Buy, let the price go up, flip the house, and count your profits. Or if you didn’t sell, use the increased equity as leverage to borrow money. It was this discovery of homes as profit centers that was the other cause of the meltdown.
To understand what happened, let’s to go back a bit in history. My wife and I were shopping for a small, low-priced house in a working-class, mixed-race urban neighborhood in 1972. At the time, the real estate agents referred to such a modest dwelling as a “starter home.” In other words, you got a place for cheap, and if you managed to pay the mortgage, save some money, and get higher-paying jobs you might eventually afford to get a bigger, better place in a so-called nicer neighborhood. If there was any talk of “equity,” it had to do with civil rights, NOT asset accumulation or leverage. The main focus back then was on having a halfway decent home and, instead of renting for the rest of your days, buying a place, tearing up the mortgage before you retired, and enjoying a bit of security in old age without blowing your life savings. Notice how rarely the term “life savings” is used today? For obvious reasons, since so many folks are in debt, and the idea of big spending backed by rising equity replaced the old-fashioned idea of thrift and saving.
So instead of the humble old idea of a home as a nest and savings as a nest egg—the bull kicked that chicken-roost metaphor to hell and gone–we had equity and the leveraging potential of our property, and licked our chops when a real estate dealer talked about a house as an “asset.” This was the new lingo of the “ownership society” that would deliver the American Dream. As we know, the fact that millions of people bought into this something-for-nothing economics, and that the banks happily went along with it eventually brought disaster. People were taking out huge mortgages in the belief that housing values would keep climbing, and banks were dishing out loans based on the same fantasy. Back when we bought a house, you had to show income tax forms and pay stubs to prove that you could afford a mortgage, and you wouldn’t qualify if payments were more than 1/4 of your income. This was later upped to 1/3 to make it easier to buy into the Dream, and eventually some banks weren’t even checking income statements. They simply took somebody’s word for it that you were earning enough to pay the mortgage. Who needed collateral when skyrocketing value would automatically create it?
As long as dishonest appraisers could inflate values, real estate dealers could pump up the prices, banks would hand out loans without due diligence, and financial companies would buy the loans, this scheme worked. But obviously, there had to be a limit on how much anybody could actually pay. After all, wages weren’t increasing, expenses weren’t dropping, and personal debts kept climbing.
Sooner or later, this all had to come crashing down. Real hourly wages—a measure of what you get for your money–were DROPPING. In fact, for HALF of our U.S. workforce, real wages are LOWER than back in 1973. Even people at the top of the heap, the 5% who benefited from the increasing disparity in income and gained 30% in real wages, began to lose ground by 2004. If the money simply isn’t there to pay the mortgage, something has to give.
Economists and politicians point to various causes for this wage decline, like offshoring of decent-paying jobs, foreign debt, increasing energy costs, etc. Whatever the causes, we can maybe learn a few lessons that will return us to a more common-sense view of work and money. First, we can’t all play capitalist speculator, and we are living in an illusion if we try. We need to let go of the bullish fantasies. Second, we’re better off to live within our limits, be thrifty, and put more faith in honest work than in casino capitalism. Finally, if we really understand the value of honest work, we need to fight like hell for organized labor, decent pay for everybody, and against offshoring of good jobs. How else to turn things around?
We also need realize that despite the illusion that the U.S. doesn’t have class differences, these divisions do exist, and are actually sharper than at any time in the past half century. Instead of identifying with the upper class investors, and dreaming that somehow we’ll float up to their second-home heaven on an investment cloud, we need to get back to the basic demand for decent pay for our toil, whether we’re digging ditches or creating spread sheets. We need to see the system for what it is and demand that it pay us what we’re worth.
As for the bull himself, well, his fate provides a cautionary tale about putting too much faith in graven images designed to get us worshiping at Wall Street’s virtual altars. Next time you think of the bull, forget about “Dollar,” the bronze bull statue at Merrill Lynch’s headquarters. Consider the alternate Dollar, a counterfeit bull that was hauled around to Merrill Lynch fandangos and that made his first major public appearance just last December at Greg Norman’s golf shootout tournment in Florida, which Merrill Lynch sponsored. That bull, said the Naples Daily News, “has become quite the star. It has been patted. Rubbed. Photographed. Adored.”
Yes, adored. I told you this was a religion.
“The bull gives the investment giant additional visibility here,” the paper noted.
‘The bull is recognized worldwide,’ said Merrill Lynch representative Katie Hyde. ” ‘It is the symbol of our company’s history and tradition.”
One guy said he kept a bull replica on his mantel, while another declared, “It’s a great symbol of hope for any investor. You always want to believe we’re riding a bull market.”
But even this puff piece on about the bull turned out to have a prophetic tinge.
“The bull can fool you,” said the Naples Daily Times. “It’s not as big or heavy as it appears from a distance. It’s not made of bronze, either. The bull is 7 feet, 7 inches tall and 12 feet long. It weighs 300 pounds. It travels in a U-Haul.”
It’s a foam replica of the bronze original. Keep all this in mind next time you are tempted to kneel down before the Shrine of Easy Money.
Sept 28, 2008
