“Greed, for a lack of a better word, is good.”
Those famous words spoken by Gordon Gekko, a successful corporate raider and stock trader in the 1987 movie Wall Street, make up one of the most famous quotes in film history and are remembered by business students and businesspeople to this day. However, most do not fully grasp the meaning of this film. The movie is about Bud Fox, a junior stockbroker who idolizes Gordon Gekko and wants to be as successful as him one day. Bud gains Gekko’ trust by providing him with insider information on Bluestar Airlines, a company for which his father works. Gekko then takes him under his wing, showing him the inner workings of Wall Street and how to cheat it. In the end, both Bud and Gordon are caught by the authorities and arrested for financial crimes. Many viewers of this film remember the scenes in which Gekko and Bud are making money and are the kings of the world, but are quick to forget what they did to get there.
The movie promotes the lavish lifestyle of Gordon Gekko by showing him using the latest technology (at the time) and being able to buy anything he pleases. It depicts Bud Fox also becoming a wealthy man and having a luxurious lifestyle. It shows the fancy clothes, the expensive cars, the five-star houses, unlimited wealth, trophy wives, etc. But, as the movie continues, we get to know the true nature of Gordon Gekko’s character. Gekko completes a successful takeover of Bluestar Airlines, but instead of trying to improve the company, he explores the option that would benefit him the most: to dissolve the company and sell off all their assets, leaving thousands of people unemployed. This allowed Gekko to access the cash in the company’s pension plan. This is a powerful statement on Gekko’s character, as he has no compassion for the employees he has laid off – he is only thinking about the money he will earn.
Here is the point when most viewers fail to realize the evil and twisted nature of Gordon Gekko. Instead, the notion that being cruel to people is a part of business and must be done in order to make you richer is accepted. Bud is eventually caught by the Securities and Exchange Commission (SEC) and agrees to wear a wire in order to entrap Gekko by asking him about his insider trading history. The final scene shows Bud walking up to a courtroom and ultimately being imprisoned. It is implied that Gekko also goes to jail. Everybody remembers the lifestyle and prestige that becoming cold-blooded and ruthless afforded Gekko, but most people forget the part of the movie where the consequences included severe punishments like jail time, massive fines, and thousands of people losing their jobs over greedy and selfish actions.
The 2011 film Margin Call shows a Wall Street investment bank right before the start of the 2007-2008 Financial Crisis. In this film, a risk analyst, Peter Sullivan, comes to the realization that mortgage-backed securities (which caused the crisis) have become extraordinarily volatile, to the point where they are deemed toxic assets. These toxic assets have the potential to bankrupt the company, which leaves management scrambling to deal with this incredibly urgent issue. Instead of warning the market and informing the government about mortgage-backed securities, the firm decides to hold a fire sale that involves dumping these assets onto their clients, thereby removing them from their own books. The executive board congratulates Sullivan for finding these assets in their holdings and decides to promote him to a senior position. Depicted in the movie is the brilliance of a hard-working risk analyst who caught on to specific assets that would cause harm to the company, and the result of his hard work leading to a promotion. What we also see are massive layoffs within the firm, including that of Peter’s friend Seth. Peter was one of the few people able to keep his job with his company. This part of the film seems to demonstrate that caring about the well-being of others over financial gain leads to being fired. What this movie fails to really drive home is the consequence of greedy actions. It presents the plan to dump toxic assets on unknowing clients only as brilliant because it allows for the bank to get rid of these assets and generate some revenue in the process.
The dark nature of these actions and their impact on the clients are again not explored in the movie. We all know that some banks failed and closed down (such as the Lehman Brothers), and others were bailed out by the government (such as JP Morgan) and are functioning better than ever today. And, while bailouts were given to those companies using taxpayer dollars, the clients who were sold toxic assets did not receive bailouts of their own. Instead, their tax dollars were used to refinance the investment banks that sold these assets to them. The movie also did not address the fact that most of the senior executives did not get punished or go to jail because of the actions they took, but instead received a slap on the wrist. The consequences of greed in this movie are not thoroughly portrayed to the audience.
Finally, the 2013 film The Wolf of Wall Street depicts an ambitious Wall Street stockbroker who created his own brokerage firm, Stratton Oakmont, and grew it into a respectable firm on Wall Street. Jordan Belfort, the founder of Stratton Oakmont, was a stockbroker at L.F. Rothschild until Black Monday in 1987, when the stock market crashed, and the firm closed its doors. During his tenure at Rothschild he became accustomed to the stockbroker culture of excessive drug use and sex. He began his career at a very small brokerage firm where he was introduced to penny stocks. The difference between penny stocks and regular stocks is that penny stocks are not traded on the public stock exchange and the broker makes 50% commission on the shares he sells, whereas publicly traded stocks only give the broker a 1% commission. Jordan had the brilliant idea of opening his own firm where he would primarily push “garbage stocks to garbage men.” This is an important part of this film, as Jordan was pushing these “garbage” stock to vulnerable, lower-class people that hoped to make some extra money in order to support their families or pay off mortgages. Later on, Jordan develops a “pump-and-dump”-like scheme, which involved pitching people from the upper-class well-known, publicly-traded stocks in order to gain their trust, and then starting to sell them the penny stocks without revealing what exactly they were. He knew this is illegal but claimed, “I’ll spend their money better anyway.”
The Wolf of Wall Street showed Jordan Belfort’s multi-million-dollar house, his custom-made yacht (with a helicopter pad), his white Ferrari, and his ability to spend money recklessly without any real consequence. Jordan’s greed leads him down a dark path of illegal actions that are eventually noticed and investigated by the SEC and the FBI. Jordan advises his employees to be greedy in order to be the best and to solve their problems by being rich. He says, “There’s no nobility in poverty. I’ve been a poor man, and I’ve been a rich man. And I choose rich every fucking time.” His greed almost led him to die on his yacht: at one point in the movie, he had to rush to Switzerland from Monaco when the bank was forced to forfeit millions of illegal dollars because the person in charge of Jordan’s account passed away. His greed ultimately led to the arrest of most of his employees, jail time, and financial losses for his clients. His clients were in possession of worthless stocks that were never going to make them money, but they were swindled into paying thousands of dollars for them. Jordan’s wife asks for a divorce and his family life crumbles.
When speaking with many fellow business students, many glorify the life of Jordan Belfort and the prestige he had because he became a millionaire. Many also forget or ignore the impacts of his actions on the people he affected.
What all three films have in common is the exploration of the minds and inner workings of top Wall Street executives. They show that most of these executives lacked any form of moral compass and made decisions based on money rather than ethics. As a business student watching these films, an image was created in my mind that in order to be successful in the game, I must become cold-hearted and greedy. I hear many of my peers saying they want to be like Belfort or Gekko, minus the part where they get caught and go to jail, but what many of my peers fail to understand is that there is never a happy ending once you are becoming greedy and fuel that greed by any means necessary.
The intended messages of these films are to be driven and have ambition, but not to let greed into your head, or it could lead to rash decisions with the aim of earning more money. Living your life without a moral compass results in the collapse of all your life’s work – from Jordan Belfort’s brokerage firm, Stratton Oakmont, in The Wolf of Wall Street to the entire American economy, as seen in Margin Call.
So, what’s the message of this article?
Well, greed, for a lack of a better word, is bad.
Sulman Qureshi is a second-year Business student