Poker is my religion. There are rules, upon violation of which, you get punished mercilessly. Some call it statistics, some – including myself – poker Gods.
When I sit down at the table I appreciate the plethora of characters from all walks of life. I appreciate the fact that there are winners and losers, luck and grind, spectacular twists of fate, rivalries but also universal fairness: In the long run, if you play correctly, you win. Very American Dream, isn’t it? There are quiet types you have to watch out for, business travelers, retirees, smelly hobos, students and “just passing by” types. There are also administrators of the entire establishment including dealers, floor managers, security that derive their sustenance from players; and an element of game – a deck of cards that is changed every few hours. You get my drift – just like a democracy. Except that we’ve been playing with the same stacked deck for the last few decades. Some people at the table will never get dealt two kings or two aces and it is not chance related. Others, who consistently win at the table make me wonder – have they really become so much smarter, savvier and better at math to beat the odds in such a remarkable manner? Am I to believe that some players are now so much sharper and more productive than they were 30 years ago, thus deserving not 20 times but 300 times the payouts of an average Joe Schmo?
That’s some impressive margin of error! So a hobo-looking character and a few students at the table complain about it and demand a new deck. And predictably, “good players” immediately jump in and attack them for being losers and comment on their personal hygiene. I wonder why – are they in on it? The sad truth is – correct play is no longer a guarantee against a long-term loss at this poker table of ours. And, if you don’t want to award any credibility to dirty hippies for voicing it, then who’s to know that better if not hundreds of thousands of people laid off from financial industry in the wake of the financial crisis. They played correct, solid game – they went to college, worked hard, got a mortgage, paid taxes and still got run over. Just look at the headlines from the last few days:
“Finance Job Losses Near 200,000 as BNP, Citigroup Cut Staff
Commerzbank sinks to first quarterly loss since ’09 and begins lending pull-back
UBS plans to cut 2,000 investment banking jobs
More heads roll in 2011 than in 2009
BNP Paribas to lay off 1,396 as crisis deepens” (Source: Options Group, Fins.com)
The first, and understandable, reaction of those laid off is to blame government regulation that encumbers the normal flow of business. If the government wasn’t pressuring banks to comply with strict rules those people would not have been laid off, the logic goes. While this can be somewhat true in the short term, are those people prepared to endure boom and bust business model in the future? And, more importantly, do they want to continue to play the game where the odds are against them, no matter how good their skills are? Guys, it’s been a juicy game at the table, no doubt, but not for you. Because to have a comfortable, middle-class life in Manhattan (not lavish, just comfortable!) you have to be a Managing Director at a Wall Street firm, but there’s simply not enough facility to accommodate everyone to become one. So what is the rest, the middle of the Bell curve with just college degree, strong work ethic and no delusions of grandeur supposed to do? Why is comfortable, middle-class life increasingly becoming a luxury available only to super achievers?
This juicy table is on the brink of breaking as more and more players are saying – we don’t want to play this game.
Those who think that OWS are anti-capitalists, iphone-using, Starbucks-drinking hypocrites and society leeches demanding handouts could not be further from the truth. “Get a Job” signs, while prompting self-satisfied chuckle in the Fox News crowd for being “clever”, fall flat. Those protesters would love to get a job but they can’t. Why is it that thousands upon thousands who lost jobs on Wall Street following the crisis deserve sympathy and the unemployed protesters don’t?
All they want is a new deck of cards. To clarify what I consider a new deck of cards is (just to start, in no particular order): reinstatement of Glass Steagall Act; effective government regulation (not necessarily more and not necessarily stricter – effective); enactment of Volcker Rule; a bailout fund sponsored by a tax on corporations to save themselves should shit hit the fan again; stricter regulation of credit-default swaps – you can buy protection only on the asset you own; executive compensation regulation. The latter is controversial and I would support a legislation that regulates the payouts of CEOs of deposit-taking institutions. If it’s a hedge fund that trades its’ own money – knock yourself out. But there’s no amount of stress and hard work that I can think of that would justify $68mln payout (Lloyd Blankfein compensation for 2007) for a bank CEO. Tough decisions to make, thousands of people to manage, sleepless nights, erectile dysfunction – fine – but unless you played with your own money and took your own risks and your downside is that you lose it all, move to the projects and dodge collectors – it’s not worth $68 bucks. Commanders in Iraq are under more stress and have to make decisions with lives, not money – for what a typical CEO considers change.
Americans love a good underdog story and often see Rocky or Billy Beane in themselves. That’s commendable, but under the current rules Rockys will be perpetually dragging that log and Billy Beanes will be perpetually tweaking those metrics with only a promise of a win in sight. I too love the element of competition and game in life, but to stay and play at that table would not make me a hero – it would make me a fool.