IN The Wolf of Wall Street, Martin Scorsese gives us an epic about the moral foundations of Wall Street. Unfortunately, it is neither the epic we deserve, nor the epic we need.
2013 should have been a particularly good year for a motion picture that took its audience through the complexities and contradictions of Wall Street. A string of high profile prosecutions for insider trading have hit the news headlines with regularity; the US government has extracted punitive settlements from bulge-bracket investment banks. There is ample material for a movie in these events, but it’s challenging to navigate the complex financial concepts that led to the Great Recession of 2008.
Scorsese did not rise to this challenge. Instead of crafting a piercing analysis of the events leading up to the near collapse of the global financial system in the fall of 2008, Scorsese has served up a pantomime set in the lurid years of the 1980s and 1990s. The film has as its focus the drug-fueled escapades of a “bucket shop” that preys on the desires of investors to get rich quick. Fans of the short-lived ABC late night comedy show Fridays will recognize the Quaalude-driven gags that recur though out the film. In fact, in portraying the rise and fall of its antihero, Jordan Belfort (Leonardo DiCaprio), The Wolf of Wall Street leaves viewers with the same “this has been going on a bit too long” feeling that plagues over-stuffed comedy sketch shows.
Instead, by focusing on the greed that sits squarely at the moral core of many people who invest in the stock markets in the hopes of gains that are simultaneously large and easy, Belfort is able to give his clients what they most want. These investors want to hit the jackpot with a winning trade almost as much as Belfort and his gang of bridge-and-tunnel brokers want to vacuum up the lucrative stream of commissions generated by each round of trades. Through a process of relentless “smiling-and-dialing,” Team Belfort reaches into people’s living rooms with the promise of “money for nothing.” Many people take their offers at face value, enabling Belfort to amass a huge fortune along the way.
Rather than systematically analyzing the relationships and incentive structures that drive investors like Belfort through each boom and bust, The Wolf of Wall Street puts great effort into its sex scenes, using images of men and women in flagrant intercourse as cinematic Viagra whenever needed to give a drooping narrative a bit more energy and drive. These are delivered in a clinical and distant manner, and hang on the screen in a strangely unerotic and disengaging way.
Scorsese’s reliance on sex and drugs is a labored attempt to externalize the moral deficiencies of these would-be Masters of the Universe, providing the audience with recurring reminders of the bankers’ personal shortcomings. Instead, they simply demonstrate to the viewer that Scorcese has failed to truly explore the crosscurrents of greed and hyper-competitiveness that operate across the financial system generally, and on Wall Street in particular.
As has been noted by other commentators, even if Belfort is indeed a “wolf,” Wall Street is neither his domain nor his hunting ground. Scorsese has us wade into the shallow end of the financial pool to explore this tale of a “bucket shop” milking individual clients out of significant portions of their savings. Rather than the wood-paneled offices of investment bankers and the massive trading floors that are a key feature of modern markets, Scorsese’s Wall Street bears greater resemblance to the grimy work of telemarketers than the jousting of corporate and financial titans to remake the economic landscape of the country.
Strangely, The Wolf of Wall Street doesn’t even earn a consolation prize for being the best film in recent memory to explore this down-market corner of the financial world. That prize goes to Boiler Room, the 2000 film starring Giovanni Ribisi, Vin Diesel, and Ben Affleck that covered much of this same terrain, but with a greater commitment to the emotional and moral complexity of the material than The Wolf of Wall Street assembles during its exhausting 179 minutes.
Perhaps it’s easier to envision the traders of credit default swaps as raging drug addicts who were only able to master the black arts of derivatives with the aid of class A narcotics. Perhaps it’s simpler to believe that it was the casual use of prostitutes during business hours that led the credit rating agencies to rate the collateralized debt obligations (CDOs), which were being manufactured on an industrial scale across the United States, as AAA bonds.
Wallowing in Belfort’s excessive behavior gives us a false confidence in the wrongness of his financial endeavors because all other aspects of his moral compass are so clearly misaligned as well. Belfort is a particularly good villain, sent directly from central casting. Charming yet fundamentally flawed, we vicariously envy his excessive behaviors while understanding clearly what his fate will ultimately be. It is, therefore, easy to judge him, and we enjoy judging him during both his rise and his subsequent, inevitable fall. We so very much want the current situation on Wall Street to break down into easily discernible “good guys” and “bad guys.” How simple that would make things!
Day-to-day life on Wall Street for most practitioners of finance, high and low, has its own rhythms and drivers. These are caricatured in The Wolf of Wall Street, but are still based largely in fact. This world is high-pressure, fast moving, and motivated again and again and again by the pursuit of profit. Success is rewarded over effort, just as the short-term is prioritized over the long-term.
The financial rewards exceed the wages earned by many others in society, but it is worth noting that compensation on Wall Street pales in comparisons to the wealth generated by those who build and grow successful business. It was Warren Buffet who noted that Wall Street was the only place where people arrived in limousines to get advice from people who arrived on trains. Anyone who has sold on commission — whether flat-screen TVs, solar energy panels, or timeshares — is intimately familiar with the underlying economics of much of Wall Street.
It is worth noting, though, that Wall Street today is a much smaller place than it was six years ago. Since the global financial crisis began in September 2008, it is believed that as many as 20,000 jobs had been lost there. But the financial sector still remains in place, operating at the intersection of our economic and political systems. It has not been usurped or refuted. Reports of slashed bonuses and realigned compensation systems regularly hit the news, but many observers on Main Street still hold on to lingering fears that, underlying all the new Dodd Frank reforms, is the same reckless “casino capitalism” that supposedly drove world markets to the brink of collapse.
With fewer positions available on the lower rungs of the Wall Street ladder, competition has significantly increased among college graduates and young professionals to gain a foothold in the industry. Long hours are par for the course as these men and women attempt to develop credible careers in a demanding, and often unforgiving, environment. There seems, however, to be no lack of new recruits each autumn arising in New York and other financial centers around the world with a strong desire to prove their worth and earn their reward.
How could Scorsese have portrayed this side of Wall Street life? Some experts are projecting that there will be over $300 trillion dollars for hedge funds, private equity funds, and other Wall Street impresarios to manage by 2020. Pension plans (and particularly public plans that fund the retirement benefits of teachers, police, firemen, and other government workers) will continue to drive many of the trends that shape the financial markets. To set the eye-watering remunerations of successful bankers, fund managers, and financial entrepreneurs against the heavy workloads and mercurial nature of market movements would be a difficult feat. A simple pantomime of orgiastic excess was by far the easier option.
For a film that asks the difficult questions about why we need Wall Street, and indeed why Wall Street needs us, unfortunately we will have to wait.