My friend Richie manages the Philippe Starck Building across from the New York Stock Exchange. They have a $23-million condo that’s wanting for a buyer (poor billionaires). I asked him if anybody was jumping from the windows yet. Apparently not.
The Sunday morning news coverage of the public furor over the AIG bonuses was instructive, if predictable, including David Gregory and company on Meet the Press on NBC, which was followed by Chris Matthews, who polled his panel on whether the bonus fallout would hamper Obama in his push for further bank-bailouts. The results were rather measured considering Congress’ need to sate the public outcry.
Let’s not underestimate the true meaning of the public anger. Certainly, the $165 million in AIG bonus payouts (although the Connecticut A.G. today ups that estimate to $218 million) can be seen as the proverbial straw, it is no less significant that other turning-point straws that fill the history books: the assassination of Archduke Ferdinand of Austria, Pearl Harbor, and “remember the Maine” or the “shot heard ‘round the world.”
That said, here’s what I think is happening and what will ultimately solve Wall Street’s excesses: the power of the people.
While that sounds quaint at first blush, people power is the latest disruptive technology, and it will rule Wall Street in the coming years the same way it has reshaped the music industry, the film and television industries, the advertising industry and the news industry. It is a force that is even larger than Wall Street.
Here’s what’s changed: I call it the trust factor. Since the industrial revolution (and certainly earlier), industry, the media and government controlled information. They may have taken the temperature of the public along the way and had to proffer lip service to obtain votes; but, collectively, they dictated the message. They had us having to trust them concerning how to conduct our affairs. I could put together a string of corporate slogans here, but I think you get the point.
Over the past decade, the trust factor has been turned on its head as the Internet has leveled the playing field, first flattening the music industry, then steadily rolling over several others.
Now, the curtain has been pulled back on Wall Street, and the complex and secretive way it has conducted business. When everyone was benefiting from the current model, big banks and insurance giants could get away with their Ponzi-style instruments.
But no more. The public trust has been broken, never to return. Now, the public will have trust flow from the public to the corporate world, in full. Its beginnings were sown in the corporate facebook pages we see today. I believe a new, disruptive model will be forged naturally from these events.
I suppose that’s a hopeful way to look at this mess we’re in. But isn’t that the same model that now elects our Presidents.
Oh, one more note on hope — some songs to help us through: Tom Paxton’s “I Am Changing My Name to Fannie Mae” and my own “We’re America.”