In the winter of 1984, Michael Lewis, a graduate student at the London School of Economics, attended a dinner at St. James Palace that changed the world’s perception of Wall Street. After a grueling hour-long encounter with an incorrigibly confident executive’s wife, Lewis was on his way to becoming a bond trader at then-king of bond trading Salomon Brothers.
Within two years, the Louisiana native retired from the fast-paced, testosterone-driven world of 1980s investment banking, but his journey was far from over. In 1989, Lewis released a written account of his trading floor odyssey, Liar’s Poker.
Twenty years later, Liar’s Poker is still the lens through which we view corporate America in the “era of greed.” Movies like Wall Street and Boiler Room cemented this image as a pop-culture identity. But in 2004′s post-Enron era of corporate responsibility, the hottest games of liar’s poker have ceased to take place on trading floors or in boardrooms–they have headed south to Washington, DC. With the election heating up, Lewis’ advice to bond buyers in 1989 may ring clearer than ever at the ballot box in 2004.
In Liar’s Poker, Lewis explained the high-stakes world of bond trading with a metaphor: a game called liar’s poker. According to Lewis, one trader would challenge another (or several others), and each competitor would take out a dollar and clutch it to his chest. Traders would make bets that the serial numbers contained a certain series, say, “three sixes” or “four fives,” until someone was challenged and the numbers were revealed. It was a game of statistics and bluffs. Those who were successful could play the numbers, lie without flinching, and identify the lies of others.
Today, this game’s hottest players are Washington-based. Bluffing has always been an Executive trait. Lincoln suspended habeas corpus on an unwitting Congress and called the hand of a seceding South. Kennedy averted Armageddon by deadpanning across the Atlantic at the height of the Cold War, and Nixon hedged his bets with wiretaps and puppy pathos. Reagan bluffed the Evil Empire into financial ruin, and Bill Clinton, the undisputed king of political poker, had the gambler’s gall to question the grammar of “is.”
In the aftermath of September 11, Afghanistan, Iraq, and the election fiasco of 2000, however, the popularization of politics has upped the ante and both George W. Bush and John Kerry are playing the game like never before.
Think of it. In 2002, Bush laid out the case for weapons of mass destruction in Iraq with the kind of stone-faced sincerity that convinced an unwilling populace that war just might be necessary. Even in the aftermath, when no weapons were found, he refused to admit the administrative bluff. Bush fought allegations of his specter-like National Guard duty and has continually heralded his own numbers demonstrating economic recovery–even as John Kerry has cited the opposite. Bush ran as a conservative, but signed off on the biggest expansions of government since LBJ, and on everything from Medicare to steel tariffs he has abandoned his primary ideological constituency.
Kerry is, possibly, worse. Thus far, he has demonstrated no real position on anything except his Vietnam service, but he has looked the country square in the eye and assured the American voter that, despite all evidence to the contrary, this is not the case. On the Iraq war, Kerry has flip-flopped like a fish out of water, but maintains a stoic assurance that he has a plan, and that his record is consistent. The senator has been caught in outright lies about his Christmas in Cambodia and his dispensation of war medals, and without so much as a flinch, launched a self-righteous ad campaign against the Swift Boat Veterans who have publicly questioned his service. He has lambasted the Bush campaign for neglecting to criticize these Swift Boat ads, even while he has condoned the misinformation of Michael Moore and left the attack ads of his own 527 organizations unaddressed.
Lewis once said of investment bankers:
The investment banker was a breed apart, a member of a master race of dealmakers. He possessed vast, almost unimaginable talent and ambition. If he had a dog, it snarled. He had two little red sports cars yet wanted four. To get them, he was, for a man in a suit, surprisingly willing to cause trouble.
And there is no more fitting description of our current executive nominees. Both are talented and ambitious. Both are affluent and confident. Both, despite their campaign style smiles, are vicious with the opposition. And both candidates, for men in suits, are surprisingly willing to roll in the mud.
This, in truth, is no surprise. If the current electoral race is nothing but a high-profile game of liar’s poker, it is important because the stakes are so high. The Chief Executive of our federal government manages a corporation with a two-trillion-dollar annual budget and more than eleven-million employees–a post subjected every four years to the threat of hostile takeover. This year both George W. Bush and John Kerry will spend in excess of $200 million on their presidential campaigns, and the winner of the election will set the course of history for decades to come. The next president will decide how we battle terror in the twenty-first century. He will guide the biotechnology policy that, like the nuclear policy of the last century, will culminate in either humanity’s greatest leap forward or its gravest mistake. He will appoint as many as four Supreme Court Justices. He will choose between globalization and isolation politically and economically. With the entire world watching, he will lay down the most important political hand in a generation.
The thing for us to remember, however, is that we all have a hand to play because it is our security, liberty, and prosperity up for grabs. In one of his most revealing passages, Michael Lewis explained the psychology of the men who would ultimately bring down trading at Salomon Brothers. He noted that they began to see bond trading as a zero-sum game. While the point of investment banking is to create wealth by allocating capital to its most efficient use, the bond traders at Solomon viewed life in two dimensions. They made money when other people–clients, competitors, or unwitting savings, and loan directors–lost; and the result was a parasitic strategy that systematically destroyed its host.
To both the Bush and Kerry campaigns (if not the men), this game, too, is zero sum. There are 535 seats in Congress to be won or lost, but no new seats to create. There are fifty states and a fixed number of electoral votes. The statistics say that some states are close (swing states) and some are not (New York), and recent history tells us that with the Electoral College, one does not need a majority to ascend to the nation’s highest office. In the rush to woo voters, modern politicians see only a nation of red and blue–support and opposition won with handouts, pandering, and rhetorical flair. Salomon Brothers died because they lost track of the purpose of their activity. It is hard to think that our politicians haven’t abandoned us to a similar fate.
In 1989, Michael Lewis had one piece of advice for a Wall Street nation: Caveat emptor–buyer beware. This was the motto used to justify the unjust actions of traders. The people they worked with had a choice, and it was their responsibility to assure the intelligence of their actions. While the men in suits were the experts, it was up to the buyer to exercise caution.
Today, we too have a choice. But as polarization mounts and we find ourselves firmly divided by the policies of men who, in reality, are largely the same, perhaps we would be wise to recognize a bluff when we see it. Perhaps we would be wise to vote and participate in the political process without alienating our families and friends–sacrificing our dignity on the trading block of hollow political ideas. This fall, we have to purchase one of the candidates, it’s true–but we don’t have to purchase the ideologies or the divisive, mud-slinging rhetoric that has dominated their campaigns. This fall, we have to buy stock in one of two executives, but we don’t have to sell our sanity to make the play.
John Coleman is a freelance writer and assistant director of a fellowship program in Washington, D.C. His Web site is johncoleman.typepad.com.
Source: AFF Doublethink Online | Joseph Hammond
Source: AFF Doublethink Online | Emma Elliott Freire