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Thursday, February 26, 2015

Oxymoron–A Wall Street Banker With A Conscience

“What’s the definition of an oxymoron?”, the bartender asked Gandy Mittler.

“I don’t know”, Gandy replied. “What?”.

“A Wall Street banker with a conscience.”

Gandy had heard the joke before. It was as common as jokes about lawyers who were always shysters and ambulance-chasers.  The more in-the-know lampooned them as lobbyists, sucking the teat of big government.

Yet the one about investment bankers really stuck in his craw not just because he was one, but because the slur just spread the distortion. Wall Street investors did have a conscience, or at least as much as any corporate executive for whom sales, profit, and market share were the benchmarks for success.

Image result for image wall street bull statue

Take for example the buyout of a tool-and-dye company he had brokered.  The firm had started out small, grew its way into the middle-time as far as New England businesses were concerned, but then got greedy. They expanded too fast, courting the Indonesian and Chinese market with little understanding of the Far East and its often peculiar way of doing business, and soon were on the verge of bankruptcy.

At the same time, the company had installed new equipment and small-scale assembly lines; and their building which had been renovated as part of the City of New Brighton’s attempt to expand its tax base by attracting industry to replace the old, was in excellent shape. Gandy engineered a takeover which benefitted everyone.  Yes, there were layoffs; but in time the leaner enterprise would hire even more workers than had been let go.  They would indeed honor their promise to the City of New Brighton, their shareholders, and eventually the workers.

Image result for image small tool and dye factory new england

Gandy made a handsome commission on the sale and was paid well by Hamilton, Fox & McLean; but he earned every penny.  Although the term ‘conscience’ had been co-opted and had come to mean social welfare, compassionate concern for the disadvantaged and marginalized, and ‘investment in people’, he resented the implication that he and his New York colleagues were doing any less to help those in need. 

Perhaps more to the point, his investments showed tangible results while public programs had not. Private assembly lines were moving. Products were being produced, marketed, and sold.  Supermarket shelves were filled with goods made by American workers or at least handled by them at some point along the commercial chain.  Americans were buying houses, cars, and refrigerators.  His colleagues financed mortgages, automotive loans, and educational borrowing.  There had been bumps in the road, and no one was proud of the excesses and overzealousness of his industry in the past few years; but all in all investment banking provided the foundation for the American economy.

Image result for images small factory assembly line

So-called ‘progressive’ programs had failed miserably because the means were more important than the ends. There was more value in preserving public education than achieving student performance. If the goal were only to promote higher academic achievement, then teachers unions would be long dead and buried; voucher programs turned into fully private schooling, and higher education’s costs adjusted to reflect value.

Gandy was a religious man and took the Bible to heart.  He was particularly attentive to the many references to the rich which had been distorted by modern-day social reformers. Christ never said that money per se was evil or that no rich man would ascend to heaven.  On the contrary he said that the pursuit of material wealth could distract attention from spiritual growth and evolution.

Chekhov’s story My Life is the tale of a rich youth who rejected his family’s wealth, privilege, and status; and chose to live closely with the peasants. He wanted to form cooperative agreements with them and help them rise from the lowest classes of Russian society. His idealism was quickly eroded when the saw that his peasants were cheating, robbing, deceiving, and progressively destroying him.  Their greed, venality, and indifference to moral principle were far worse than in his father’s upper class.

Image result for images chekhov story my life

The pursuit of material gain is universally corrupting said Chekhov.  No one is exempt from the lure of wealth. A rich man can live morally if he adheres to moral principles. There is nothing inherently immoral in capitalism; nor is there in the desire of a disadvantaged peasantry for a better life.  Chekhov’s peasants were immoral, undisciplined, and greedy, just like Bernie Madoff, Enron, and Goldman Sachs.

The problem was not in parsing the nature of greed; but in keeping a right moral compass. Morality can be twisted every which way to justify wrong actions. Hiding evidence to convict a known rapist. Edging around tax law to enable a takeover that will benefit both stockholders and employees.

“Calling it a shell company”, said a colleague of Gandy’s “does a gross disservice to the complexity of those financial schemes which creatively avoid the punitive taxes enabled by a a do-nothing, posturing Congress whose members want to look like Roosevelt.”

Image result for images FDR with pipe

In other words there was nothing wrong in cheating a government which itself cheated and stole taxpayers’ money.

Gandy had worked in Poland shortly after the fall of the Soviet Union.  He had met with the head of the newly reconstituted Chamber of Commerce who told him that the biggest problem in reviving the economy was morality.  Under the Communists, he said, it was moral to lie, cheat, and deceive the authorities because they were immoral. Getting young people to understand that the rule of law which governs correct behavior in the market place – and prohibits lying, cheating, misrepresentation, and stealing – is a good thing.

“No one said that it would be easy”, said Gandy’s lover during one of their afternoon trysts at the Plaza. “I know of no one but you who keeps a moral compass in the office.”

Image result for image lobby plaza hotel nyc

The fact that he was cheating on his wife, deceiving her, and taking advantage of her trust in him bothered him no end.  He was aware that no matter how many moral GPS’s he installed at Hamilton, Fox & McLean, he was sailing in rough waters in his personal life. Affairs were not no-harm-no-foul offenses.  He once told a friend about his love affair with a beautiful Danish woman.  His friend, rather than sharing in his excitement, said, “Someone will get hurt.”  It turned out that Gandy was the one who was hurt because Berthe had fallen in love with someone else and left him on the curb. It could easily have been his wife who, if she had found out about the affair, would have felt hurt, betrayed, and angry.  It could easily have been Berthe the one left on the curb like so many paramours of married men.

Evil is simply the absence of good, said Augustine borrowing a page from Aristotle.  We are all sinners said Paul, explicating the words of Christ.  Perhaps there is no such thing as true North on a moral compass; or that no man is capable of keeping it.  Or better yet, morality might be like business inventory – if you draw down on it as he was by sleeping with Andrea; then you have to replace it, as he was doing by adhering to principles of moral rectitude in his office.

Image result for images st augustine

So this is how Gandy Mittler led his life.  He adjusted moral inventory. He was aware of the value of the stock, was careful not to deplete supplies and to replenish what he had used; and he knew that there was a risk to the transaction.  His account ledgers would mean nothing if his wife left him or if his children found out about his deception and held it against him, threatening his relationship with them forever. No matter how much good he did by making money for companies within the limits of the law and by respectfully considering the costs and benefits for all involved (adding to inventory), one false step with Andrea, Berthe, Mukta, or Cristina (drawing down on it) could mean bankruptcy

Gandy thought that morality was fungible. He accepted risk in its allocation; and he never said he was perfect.

Gandy, however, thought about morality; and that is more than what most people do.

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