The Shadow Wall Street Casts on NYC

Since the last great American banker, New Yorker John Pierpont Morgan, saved the American financial industry in 1907, avoided a financial market panic, and trigged the creation of the omni-important Federal Reserve System, we have not seen another great banking hero emerge since. Instead, a century later, almost every major financial institution was involved in the subprime mortgage crisis scandal that came to light in 2008.

Since the early 1980s, New Yorkers have been fascinated by the endless media reports of the millions of dollars young bankers working on Wall Street make. Since the difference between the average salary and salaries on the Street is so incredible, the whole country—with the possible exception of Silicon Valley—looks at investment bankers with envy and admiration. With Manhattan in the middle of it, New Yorkers were reminded about this dark reality almost daily by TV and newspapers.

New Yorkers are proud people. It is often rightfully called the greatest city in the world for its diversity and its influence in media, culture, entertainment, and business. It was the birthplace of Michael Jordan, Woody Allen, and countless other famous figures. 

New Yorkers have always thirsted for success. But since they are so close to Wall Street, the culture of greed gradually seeped into the minds and bodies in every corner of the five boroughs. The result is that during this time period many new Yorkers learned the wrong lesson: to get rich, you to take high risks, at any cost; if you are poor, that is because you are stupid.

This get-rich-at-any-cost mentality without consideration for the greater good in society gained momentum through the years, even after the warning signals from the huge U.S. Treasury bond scandal at Salomon Brothers in 1991 and the Long-Term Capital Management hedge fund collapse in 1998. But we know that we all have to pay for our sins and the bill came due in 2008.

The greed culture of Wall Street caused calamity for this country and at the same time claimed many victims who were born, influenced, and grew up in this poisonous environment in New York, among them the following: Richard “Dick” Severin Fuld Jr. of Lehman Brothers, Angelo R. Mozilo of Countrywide Financial, and Maurice “Hank” Greenberg of AIG.

If they had been born in New Mexico or North Dakota, for example, they might have become much less risk-takers and believed that money should be made the hard way instead of choosing the path of financial engineering. 

Hopefully this time New Yorkers have learned the hard lesson and will follow Germany’s example of making high-quality products so as to elevate the living standards of the majority of the population, instead of enriching only a few.

Warren Song is a New York-based financial consultant