Now comes news that while Nortel was in its death spiral, its chief executives were taking home more than $400 Million in personal compensation. Meanwhile, the people who actually created the wealth they squandered are losing their jobs by the thousands and seeing the pensions they spent decades creating shrinking them into poverty in their retirement years.
I've never owned stock in any company except my own and I never will. There are a lot of reasons for that, but chief among them is I had a couple of roommates in my struggling actor days who worked at the Toronto Stock Exchange. Most of their evenings were spent drinking and scheming, figuring out ways to pump up the value or merely the perception of the stocks they cold-called dentists about every day, attempting to sell.
I'd come from a world where people raised cattle and wheat, dug potash out of the ground and drilled for oil. What they created was tangible and I never understood this new world of shuffling around paper and making money even when a company's stock tumbled or all the other casino like games they played that evolved into today's hedge funds, junk bonds and derivatives.
Most of the companies they were selling didn't even seem to exist a few weeks later, like a bad Hollywood movie that's hyped to death in the hope it will make enough money back to cover its costs before the truth gets out.
Even the transitory value of an evening in the theatre or the heft of an unsold script always felt like it had more worth than what they were selling.
They told me this "knowledge economy" was coming where other people would make things and we'd just sit back and manage their money for them. That never made any sense to me, but they were making a lot more money than I was, so I just figured I was too dumb to run things.
Over the years, I've had times when I really wanted to get in on some of the market booms I kept hearing about. Sometime in the late 90's when the Tech bubble was forming, I remember the Globe and Mail hyping a local "Market Visionary" who would be gracing their pages with a rare interview. And when the day came, there he was on the front page of their business section imparting the single investing rule that had created his vast fortune -- "Buy Low and Sell High".
Wow, I thought, why wasn't I (or most of the Globe readership for that matter) smart enough to think of that! I had begun to realize that the Emperor wore no clothes and moved on.
The pillaging of a once great company like Nortel (details here) isn't really news these days. In the last months we've seen dozens of corporate icons and household brand names crumble while those who managed them shrugged off the failure and retreated to lavish homes with severance packages that kept their lush lifestyles intact.
A couple of summers back, I produced and directed a lifestyle pilot called "Mansions" which profiled the homes of some of that executive class. In the process, I got to explore wealthy enclaves I would never have believed existed within the city of Toronto. Places where people had their own private armies of armed guards, fourteen Ferraris in a climate controlled underground garage, Olympic sized pools and art work that occupied entire wings of homes.
Now I'm sure all of these people came by their fortunes honestly and how they chose to spend them isn't my business or anybody else's. Although one of them is now living as a guest of the State in Florida.
But I couldn't shake the feeling that most were hiding; that they'd constructed these opulent retreats as a way of enjoying the best the world has to offer without the risk of actually having to venture out into that world or encounter somebody they might not want to meet in the process.
That was confirmed for me one day as we wrapped up shooting on a home so over-layered with decorative detail you felt you were inside a wedding cake. I asked a new crew member what he thought. His answer, "Man, there is something wrong with these people."
What's wrong with them has become clearer to all of us in the last months as those who supervised our economy are being revealed in growing numbers as a class riddled with a sense of personal entitlement almost beyond comprehension. I'm sure even Sigmund Freud would be flummoxed by what inner terror could drive a man to need to shit into a gold commode before he could be happy.
Last week, US President Obama declared that no executive running a company receiving Federal bailout funds could receive compensation of more than $500,000. That made sense to most people and I hope it encourages somebody from Telefilm or the Canadian Television fund to get around to opening one of those final production audits they never read and rethink the money some of our film and TV execs regularly extract from the public purse.
But Obama's call resulted in quite an outcry from a lot of "free-enterprise" types, seemingly unaware that they'd long ago stopped actually creating wealth for anybody but themselves. I guess looking at losing $9 - 10 Million from your annual take-home can do that to a person.
Yet the call seemed to do immediate wonders for the economy as both JPMorgan and Goldman-Sachs, each recipients of a few Billions in bailout money short months ago, suddenly found themselves in a position to pay that money back and get themselves off the restricted salary list. An interesting anecdote for those of you who still don't think the economy is completely fabricated.
Maybe this current crisis will finally get people to wake up and take those who would presume to run our lives with a larger dose of salt. But who knows.
What I do know is Nortel is done, leaving behind two stories I heard this week.
The first came from a friend whose 93 year old mother passed away last week, leaving each member of her family a small sum to remember her by. She never had a lot of money, but one summer a few years ago bought 100 shares of Nortel for each of her kids.
At the time the stock was at $127 and she assumed that it would be something they could use to enrich their lives when they finally received it. Thanks to the men who ran Nortel, now relaxing by their pools and sunning on the decks of their yachts, when her children finally opened those envelopes, the stock they contained was worth $11.00...
Which brings me to a final story I doubt is true but like all good fiction makes its point in spite of that fact. In the version I heard, a father died leaving his two sons the summer cottage they all once enjoyed and $5000 each. The more responsible brother chose to invest in Nortel while his irresponsible sibling decided to buy a huge stash of Beer and celebrate the old man in a summer long blow out at the cottage.
At the end of the summer, the guy who bought Nortel had lost all of his inheritance and the other brother was out of beer. The responsible brother said they had both pissed away what their father had left them. But the other brother told him he was wrong.
Y'see, there was a 5 cent deposit due on every bottle he'd bought. So they trucked all the bottles back to the Beer Store and recouped enough to buy enough beer to fuel one more huge party at the lake.
The moral of that story is very clear to me. Never entrust your money to anybody in a suit, no matter how important and smart he tells you he is. Share it with your friends and you'll end up richer than anybody who trusted the stock market.
2 comments:
Great post! Though I share your suspicion of investing in stocks, I don't know if we as artists can afford to withdraw from the economy totally. I have been trying to make myself pay more attention to my money (with little success).
Keep up the good work.
I used to work at Nortel back in 1995/96. The company was at its peak back then, and while most of the hard-working cubicle warriors I often interacted with were some of the nicest people you'd ever want to know, the executives, on the other hand, were absolutely miserable sons of bitches. So, arrogant and condescending with this inflated sense of importance and entitlement.
Although I'm truly very sorry about what happened to my friends at the company, a delicious little thrill ran down my spine when I learned that those a-hole middle-management execs were layed off without a severance package.
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