01 April 2009

Wall Street Bankers - Dr. Jekyll or Mr. Hyde?

Dr. Jekyll is the bailout banker you've been seeing on TV lately. They are pale, with eyes that seem to blink too much, but that’s because they aren't used to the glare of so many flashbulbs and spotlights. The voices are soothing, convivial even, which is no mean feat, given the circumstances. These Dr. Jekyll's all seem to be clear eyed, sober men who have worked hard at their chosen professions, like most of the rest of the country does, looking for breakthrough new financial products and services the way a research physician searches for a cure for cancer. By the time the designated Dr. Jekyll of the week finishes his somber statement to the news media about how much these "toxic assets" have hurt his company's business, you are almost ready to pull out an envelope and a stamp to mail the poor fellow a check.

But when these munificent Dr. Jekyll's are ensconced in the burl wood and leather confines of the company's corporate jet, or while they are pacing back and forth in their lairs atop the glass walled towers that houses their companies headquarters, it is the Mr. Hydes who often appear, their eyes bulging, their lips snarling, their breath hot and raspy as they fume about how terribly they are being treated by a finger pointing press and a raging public. These sinister alter egos reserve the brunt of their indignation, though, for the "toxic assets" on their balance sheets, those nonperforming mortgage loans that they have paid good money to have relabeled as something poisonous and alien to their corporate culture.

If you have read The Strange Case of Dr. Jekyll and Mr. Hyde, you understand that the phrase "Jekyll and Hyde" has been misused almost as much as "toxic assets". The original story by Robert Louis Stevenson, first conceived in a dream, is an allegory that explores the concept of duality - in this case, man's inner conflict between good and evil through the genial Dr. Henry Jekyll and his frightening alter ego, Mr. Edward Hyde. To say that the CEO's of our banks who need to be bailed out are the personification of evil would be misleading. Nor are they qualified to be the standard bearers for all that is good in our financial systems.

An outward show of respectability and an inward money lust, urges that exist in us all to some degree, were magnified unequally in these financial Jekyll and Hyde's. The derivative potion that the Dr. Jekyll side of the bankers created worked so well at generating cash that its success seemed to inflame the Mr. Hyde in them. Just like in the story, as time wore on it took more and more of the derivative potion to achieve the same profitability. So the sincere Dr. Jekyll side had to go to work, utilizing all of his considerable charm and established goodwill to get government officials to remove the boundaries of common sense from SEC and banking regulations, in order that his Mr. Hyde side might partake more freely of the derivative potion.

Now Dr. Jekyll is back before us, terrified to death of this dark side of them that has delved into the very depths of financial depravity, horrified at what calamitous results have been begat by their very own hand. It is the Mr. Hyde side of their nature, a dark side whose illusions of power have fed on themselves so long that he no longer needs any more doses of the derivatives potion to sustain him, a dark side who lunges out at his benefactors even as they try to help, who spins around after receiving fresh funds from the government to help cover his losses and hands some of this cash infusion right back out to those very same mad scientists who helped create the potion in the first place.

Near the beginning of The Strange Case of Dr. Jekyll and Mr. Hyde, when Dr. Jekyll's lawyer questions him the relationship between he and Mr. Hyde, Dr. Jekyll exclaims

    "I will tell you one thing: the moment I choose, I can be rid of Mr. Hyde. I give you my hand upon that."

it is a promise the doctor cannot keep. This is the part of the Stevenson story that we are most familiar with, where Dr. Jekyll loses control of his experiment when Mr. Hyde begins to take over his body and mind without the aid of Jekyll's potion.

Why is the American public so upset at our own homegrown Jekyll and Hydes? Because we wonder if the Dr. Jekyll's of the banking industry can keep their promises better than the original.

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