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01/28/2009 03:10 pm ET | Updated May 25, 2011

Is Greed still our Creed in America?

Essay: "Is Greed still our Creed in America?"
By: William A. Donius
January 27, 2009

When Gordon Gecko proclaimed his penultimate line, "Greed is Good, Greed Works" in the 1987 film, "Wall Street" it seemed to somehow make greed more acceptable to the ambitious. After all, at the core of capitalism is the notion that hard work and aptitude will inure to the benefit of those who are working hard as well as smart. It is not a big leap to believe that those that are truly working that hard want more for themselves and thus, greed creeps into the equation.
Perhaps that movie inspired a whole generation of folks to lust after the same signs of wealth that Gordon Gecko surrounded himself with in his world. I know that from visiting New York that it is a tough city to operate in, even on an expense account. By extension, I suppose I can relate to those Wall Streeters who worked hard to create the highest standard of living possible for their families. When I examine my own patterns over a twelve-year period as a CEO, I realize I equated hard work with monetary success in my life and justified a certain amount of lifestyle enhancements along the way.
Gordon Gecko met his ultimate and unfortunate fate by the end of the movie. But, the fundamental message that "Greed is Good" perhaps lived on in our American psyche. Since avarice is one of the seven deadly sins, how exactly did it become an American value? When and how did the separation of those who worked hard for an honest day's pay and those who wanted an exponentially greater return take place?
Did our talented athletes who demanded and received $100 million contracts inspire this movement? Or, could it be the large corporate CEO's whose compensation skyrocketed to more than 170 times the average worker's pay; up from 40 times the average worker's pay in the 1970's? Or, is it possible that greed inspires more greed?
I spent 12 years as a community bank CEO. My compensation was certainly under the 40 times ratio. I suppose that if a board of directors was willing to pay substantially more and there was peer group evidence to support a higher number; that it may have been hard to turn down more compensation. In retrospect, I suspect it is a good thing that I was not tested!
Most Americans live their lives with a rather healthy amount of balance between work and personal time. And further, have not gone to the extreme of worshiping money at the expense of everything else. In defense of the rich, most have to work super long workweeks to bring home their big paychecks. I'm not sure they are working 170 times harder or longer, however.
There is a great divide that has been created in this country between the super rich and everyone else. I'm not sure the super rich or also the super greedy? The richest 1% of Americans earned $1.3 trillion in 2004, an amount greater than the total national income of Canada. Further the top 1% of Americans has 33% of the country's wealth. The tax policy center estimates that 80% of the tax savings from the Bush tax cuts went to the top 10% of taxpayers and almost 20% went to the top one tenth of 1%! Wall Street Journal reporter Robert Frank in his very insightful book, "Richistan", reported these figures.
As a free market capitalist myself, I endorse and condone hard work, individual risk taking and capital investment. However, implicit in the success of capitalism is the assumption that its citizens will act with responsibility in a manner that is both moral and ethical. Perhaps this is where the lines started to blur over the past several decades? It seems that some believed that whatever they could get away with doing, was worth doing. Moreover, we learned how ill prepared the various regulators were at identifying fraud, illegal schemes and poorly constructed products.
Is it possible to be greedy and also operate in a manner that is both ethical and moral? Over most of our country's history, we have found the balance between social responsibility and outright personal ambition and greed.
There seems to be a tipping point that crept into our economy somewhere along the way over the past twenty years. Consider that the U.S. had only 13 billionaires in 1986 and today has over one thousand. Perhaps it started with the supply side inspired Reagan tax cuts that were intended to cut the taxes that the rich were paying so that there would be a "trickle down" effect that would inspire more investment in manufacturing and in the economy.
Research has shown that a paltry three cents of every dollar trickled down for re-investment purposes. What happened to the other ninety-seven cents? The rich kept it and got richer! I suspect that this activity could have set off some sort of competition amongst the rich to keep up with one another if not to exceed one another. This is probably easy to see in the sale of increasingly bigger private jets, houses and yachts. Each time the world biggest yacht is launched, there is an immediate order from a client to build an even bigger one. Today, there are a number of yachts over 500 feet long! I certainly do not have an ax to grind against the rich in this country. My intent is to explore the difference between wealth and greed.
Our society reveres and admires the rich, for the most part. Accordingly, there are many who aspired to gain admittance to this class. It obviously has many perks. Is it possible that we are an entire country of people eager to dream a big American dream of not only home ownership, but also multiple home ownership? And have not only a great car, but also a collection of the greatest cars? We all watched the TV shows that famously documented the lives of the rich and famous. How much did these shows alter our behavior by creeping into our national psyche?
A study by the PNC Advisors Wealth Management Firm showed that the rich needed roughly twice what they currently have to feel comfortable. Those surveyed that had $1 million in assets stated they needed $2 million, those with $10 million stated that they needed $18 million, etc. Perhaps this helps paint the picture of the basis for greed? Most of us feel that we never have enough.
There are certainly many Americans who have kept their lives in balance and chose not to put in the mega hours in order to seek the additional financial rewards and successes that may follow. They were not tempted by the Gordon Gecko mantra to want more, take more, at the expense of others. Perhaps some kept their lives in balance simply because it was hard to get ahead in their respective companies or they were working in blue-collar jobs and the opportunities were limited.
What about that top ten percent that are making the great majority of income in this country? Including the Gilded Age, this country has never experienced a time in our history where so few were making so much. Maybe this is good for our economy? Or perhaps it is hurting our economy as the major spending decisions are reduced to the decisions of the few? Our economy is certainly reeling from the excesses of the past. One example of clear greed are the investment banks that structured, packaged and sold billions of dollars of sub prime loans to Wall Street and the world. It was a great business while it lasted, as Goldman Sachs alone was able to payout $16 billion in bonuses to its employees in 2004. (See my related blog, "Mortgage Mayhem misses Main Street Lenders-How Come?"
Today the truly rich are defined as those with a net worth of over fifty million dollars. There are great examples of generosity in this group, for instance Warren Buffet and Bill Gates have committed the bulk of their estates to charitable purposes. They serve as great examples.
So, how exactly did we cross over from a society that tolerated or even perhaps accepted greed to one that actually worships greed? This certainly contributed to the financial mess that we find ourselves in today. We are a country that is built upon those who left other countries to form better lives in this country. Hopefully, we have not become a country that is preoccupied with personal greed and consequently less concerned about each other and those who are less fortunate.
We are a country that likes to win; this is evident in our sports teams, in business, even in our kid's little league games. One way of keeping score s the mementos and trophies that accompany such victories. I suppose that money is another scorecard for keeping score and perhaps the most obvious. The Forbes 400 list annually tracks the richest 400 Americans and is followed with a great deal of interest. By extension, perhaps greed is simply the quintessential form of winning financially.
In the greed game, the only way one can win is to keep hoarding money as it almost impossible to win, but one can continue to climb the ladder to move into new rungs. A fervent and unbinding passion, to the exclusion of everything else is likely a sign that one has crossed over. And in so doing, perhaps we cross over unwittingly from believing that "greed is good" to acting is if "greed is god?"
This is precisely the time in our country's history, where we need to come together as a nation to assist one another by finding ways to give back. Hopefully, those who have done well and profited in the system, will find ways to volunteer and make a difference as the country faces adversity and challenge.

Note: link to trailer of "Wall Street" through You Tube: http://www.youtube.com/watch?v=oyspCSG4LAk
Note: William A. Donius was elected CEO of Pulaski Bank in 1997. He took the bank public in 1998 with Pulaski Financial Corp. NASDAQ listed PULB as the holding company. Under his leadership the bank grew from $168 million to $1.3 billion. Pulaski Bank is the largest purchase market, mortgage originator in St. Louis and one of the top three in Kansas City. Pulaski Bank was voted the Best Place to Work in St. Louis in 2007, received a Torch Award from the Better Business Bureau in 2008 and is ranked as one of the best performing smaller banks/thrifts by industry publication SNL. Donius retired from the CEO position in April of 2008 and remains Chairman of the bank. This essay represents his personal view and may represent the view of the bank.
Donius was appointed to a two-year term on the U.S. Federal Reserve Board TIAC Council in 2008. Donius served a four-year term on the Board of Directors of America's Community Bankers ending in 2007. In addition, he served as Chairman of for profit subsidiary, America's Community Bankers-Partners for two years.