I just got back from seeing The Power of Yes at the National. If you wait a few days (I know; I'm asking a lot) you can read what I thought about it as a play at Londonist, but what I want to write about here is the subject matter. (Actually I want to lift entire chunks of the script, but that doesn't sound as intellectually pressing.)
If you don't know, The Power of Yes is David Hare's attempt to describe the financial crisis. He's put 'himself' on the stage, talking to people who were actually involved or (should) know what they're talking about, as a way to explain it to himself – and us – and he's used material from interviews he conducted with these people to build his script. I'm not entirely clueless when it comes to the causes of the economic meltdown because I used to work at one of the Big Four (sorry; sorry sorry sorry; I should point out I had nothing to do with the accounting side, I just looked after the website) which meant I had to read a lot of their publications in order to write some web bumpf. I'd been reading about these ridiculous financial creations before I started seeing articles in the papers about why they were a ticking bomb, and also why I put this together about a year ago.
Yes, a year ago. And the main thrust of my anger surrounding greed, stupidity and incompetence hasn't gone away. My anger, or the causes of my anger. And it was fascinating – and frustrating – to listen to the actors saying words that real people had said that were, if not hugely enlightening (for me), still shocking. When the play was over I headed straight for the NT's bookshop and bought a copy of the play (something I've only ever done before with The History Boys), and there's a section which is excruciatingly relevant to right now. 'David Hare' is talking to an FT journalist, who's revealing conversations she's had with bankers:
"They just don't think they've done anything wrong… [They think] 'I'm cleverer than they are. I must be cleverer than they are because I earn more money than they do' [gag which I don't want to spoil for you] I have to tell you I've been gobsmacked at the extent to which bankers don't get it. These people genuinely believe they're masters of the universe. And why are they masters of the universe? Because they're paid fifty times as much as anyone else. So they must be cleverer than anyone else.
"No banker believes he's lucky. However much money they earn, they all believe they deserve it… From 2000 onwards the market ceased to be a genuine market… They came to believe that they made the money, not the company. And they're wrong. They make money for the company. But that's what they refuse to accept."
When bankers are trying to reclaim the high ground on bonuses (gotta tell you guys; that's gone. Really), it's interesting to get a look behind the curtain and see what they think of themselves. I pointed you in the direction of Robbie Hudson's blog a few days ago, and if you didn't look then a) do you ever do anything I suggest? Then why are you reading this at all? and b) you can look now and read him saying pretty much the same thing; so if I know this and Robbie Hudson knows this and David Hare knows this and the FT journalist knows this and all the people who've seen the play at the National Theatre have at least considered this – I mean, jesus, can we all be wrong? So at what point do the bankers start to Get It? That their money is not, in fact, a reflection of their worth, it's merely a reflection of the artificial numbers they're working with? Numbers that they themselves inflated?
The play covers more bases than just the bankers; the problems with regulation ("In the US, they're much heavier about these things. No one can go into a room without a lawyer. So tell me why it's them who ends up with crooks like Bernie Madoff and Alan Stanford"), Gordon Brown ("The City was providing him with 27% of his taxes. Of course he wasn't going to regulate it"), society ("The fetish of Anglo-Saxon capitalism is home ownership. You have to own your own home… And once you've bought it, you have an asset… hey, you can borrow more money"*), the Americans ("The Fed decided to draw a line in the sand, and unfortunately it was the wrong line")… but oh, the bankers. I'd have to break all manner of copyright law and copy out huge chunks to demonstrate what I saw on stage; but if the bankers have no understanding of what they have done – of the problems that were caused when nobody read the damn balance sheets because nobody wanted to take the long term view when the short term was so profitable, the problems by all these so-called smart people being unable to envisage consequences while ignoring any inconvenient facts; and do they even realise there is a "what" that they're supposed to have done? Because as a collective unit, they're not paying the price – they're going to do it again. They want to start it all again even now, watch their unified bleating.
Markets are only as sturdy as the people inside them, making the decisions. And "if you're paid £20m a year, you're not incentivised to read your own accounts". And if you're paid that £20m a year because your company is making vast sums of money from the inflated, unreal products you're selling, where's your incentive to cut back? No, you're going to encourage the market to go wild. Markets go wrong, because people almost never do the thing that's right for the greater good when the opposite action is to create something good for themselves – and the people that would, do not go into banking. This isn't some conspiracy, it's not that the banks are packed to the rafters with evil men, it's just human nature. And human nature really stinks sometimes.
I'm sorry, this is as far as I've got. I wish it were more upbeat, I wish I could conclude that we're not all being held hostage by other, richer, people's baser natures, and that the only reason it's come as such a shock to our generation is because the financial system accidentally went largely right for most of our adult lives. And we have no idea what we're in for.
In conclusion – go see The Power of Yes! It'll make you really thoughtful for about three hours, then make you want to kill yourself.
* It's only recently I've started, finally, to realise that for many people, owning their own home is about some weird investment speculation, rather than having somewhere to live. I bought because I was sick of being at the whim of landlords and so that if bailiffs came to my house, at least it'd be my own fault.