Wall Street takes blame when it should be Madison Avenue
August 19, 2011
It feels to me that being a part of the world economy right now is like being tied to a water wheel da Vinci-“Vitruvian Man”-style by a gang of thugs, spinning slowly around, part of the time upside down with your head in the river, and the rest of the time with a pounding headache as blood rushes back out of your skull while you try to catch your breath. The bad thing, of course, is that the thugs are going to keep it up until we drown or we tell them where the last of our life savings are hidden.
The big problem seems to be with debt, whether it’s our own or the government’s, which is also our own, so the real problem boils down to our own debt, whether we racked it up ourselves or incompetent politicians did it for us.
But, that’s not really fair to politicians. They are only the latest whipping boys in this debt debacle that has been hanging over our heads for three years now, or at least three years since anyone noticed it. Up to now we have spread the blame broadly.
We’ve accused mortgage brokers, mortgage bankers, investment bankers, central bankers, regular bankers who golf every day at 2, examiners, hedge-fund managers, pyramid schemers, Federal Reserve Board members, rating agencies, insurance companies, foreign investors, real estate agents, accountants, unions, BP, PIGs, the EU, the Chinese, the Mexicans, the media, yuppies, lobbyists, OPEC, speculators, regulators and, of course, politicians.
All of these types can be lumped together into three broad categories: The idiots who signed up to borrow more than they could pay back; the idiots who actually lent the other idiots the money; and the complete idiots who enthusiastically encouraged both borrowers and lenders because soaring home values made everyone feel rich.
Pretty much everyone in the country has had a finger pointed at them except baby-sitters and tattoo artists, and if things don’t turn around soon I am sure that the finger will come around to them, too. But, it seems to me that in all of the accusations perhaps the biggest culprits have been let off O.J. free: marketers!
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Yep. It is the marketers who enticed the hedge-fund managers to want Ferraris and thus needed to load up their portfolios with mortgage-backed securities to sell to wealthy clients seeking abnormally high returns because they wanted to travel in Gulfstream jets; and thus mortgage bankers gladly put the “investments” together because they wanted to take their families on all-inclusive, three-week Disney ocean liner togetherness cruises in the Caribbean and thus had to take advantage of service industry professionals by offering too-large home loans because they, the professionals, just had to have big houses with expensive carpets and trendy art hanging on the walls, and who sold their old perfectly good homes to blue-collar folks after they upgraded them with granite countertops and hardwood floors, all of which were the “must-haves” because the folks on Madison Avenue told us we wouldn’t be well thought of by our peers or envied by regular people if we didn’t acquire this stuff, not to mention the negative effects of not having these things would wreak on our love lives and forehead wrinkles, which, by the way, could be taken care of by wearing tight-fitting Under Armour clothing, bizarrely treaded Nike training shoes, all the while toting a tall cup of Starbucks with the logo in plain view for which a plastic bottle of expensive water could also be substituted.
Yes, I know you remember all of this.
While it’s easy to lay blame on the parties that had their snouts directly in the wide and deep feed trough that led to America accumulating a vast spare tire of debt cinched by the latest Gucci belt knockoff, it is important to remember that all of those parties at that new and improved galvanized trough were motivated from the outside to accumulate the trinkets, bauble and gimcrackery that advertisers promised would make our lives complete. So then, why don’t those people who shoot wadded-up paper into trash cans with mini-backboards attached while waiting for the next brilliant ad campaign to come to them shoulder any of the blame for the world’s financial crisis?
It’s simple: We would have to make some startlingly grave admissions before finding the guts to throw the accusation their way.
First, there is no solution to fixing this problem permanently. Modern advertising is ubiquitous and inescapable. We are powerless to resist its promises of better lives, seemingly even when we are perfectly happy and content. Sure, we can quit borrowing when nobody will lend to us, but as soon as things turn around we’ll be right back in the red quagmire of image-building.
Secondly, the primary culprits for the world economic crisis did not make mistakes. They did exactly what they set out to do: sell us stuff we don’t need. They are good at their jobs – effective and efficient. In short, you would want them on your team. It’s hard to be angry with people who do their jobs well and dress so sharply.
Finally, the marketers are smarter than us. Ouch! That’s the deal killer for me. I’ll never admit that. Besides, I really did need all that stuff.
Roger Marolt wonders who still brags about the size of their HELOC or what their home was appraised at recently. Contact him at email@example.com.