Greedy investors damned by critics hiding own secrets

OPINION: Greed always gets a bad press, never more so than when the greedy are shown to have got away with it.

So the South Canterbury Finance (SCF) collapse has been a gift to the censorious. This week's moral pariah – the stupid and/or avaricious investor who should have known better, and certainly shouldn't have been bailed out by that hardworking paragon of virtue, the taxpayer – has taken an absolute pasting.

Singled out for special hatred have been the chancers who poured money into SCF when it was known to be on the ropes, in the knowledge of a healthy return under the government's weirdly generous Retail Deposit Guarantee Scheme. Bugger them, they knew the risks, surely the free market is all about wearing your losses ... in short, greedy pigs make their sty and should lie in it. No, we have no time for the greedy. We hate the scheming shysters running the finance companies, bloody flash Harrys, swanning around tropical islands or European capitals having looted their own ruined empires. They ought to be put in stocks.

But we're none too pleased with the poor old "mum and dad investors" either. Victims with little or no chance of recouping their losses they may well be, but that doesn't mean we can't blame them for being credulous idiots, chasing high returns then bleating when it doesn't work out. Stiff cheese, we say, not our problem.

The greedy are everywhere, ready to be hated: the useless, on-the-take financial advisers and consultants, pimping investment opportunities they knew – or should have known – were bubbles waiting to pop; the real estate speculators and capital gains' junkies draining the economy of more productive investment; the price-gouging hoteliers trying to make a killing on the Rugby World Cup; the householders putting everything from flat screen TVs to cosmetic surgery on their credit cards – an overwhelming desire for more being the definition of greed.

As for the bankers who created a false economy out of worthless derivatives and phoney financial products, then were bailed out and paid themselves bonuses – greed barely does it justice.

Or the politicians and economists who presided over the whole insane credit orgy and never gave a thought to the morning after – off with their heads! Not that we're surprised by anything politicians do, with their snouts buried in troughs full of perks and expenses, lecturing the rest of us about tightening our belts while the only belts they were tightening were across their fat midriffs in business class on their way to a "fact-finding" trip around the Mediterranean or Caribbean. Greed so ingrained they don't even know they're being greedy.

If you're looking for the living embodiment of grasping swinishness, how about the high-earning Working For Families' scammers who arrange their affairs so as to meet the income thresholds for state assistance? Such gluttony would surely be applauded by the like-minded oinkers who hide their real assets and wealth inside trusts and companies in order to avoid paying their child support dues from previous failed relationships. Morally bankrupt, but fiscally prudent.

What hope is there for a society where the same kind of people preaching welfare "reform" and tax cuts for business are simultaneously fiddling the books to take advantage of the state's unwarranted largesse? Where "high net worth individuals" still want to minimise their tax liabilities, even when paying up will make no difference at all to their quality of life?

The trouble is, when it comes to hating greed and its symptoms in our culture, where do you stop? Like the tall poppy syndrome, it's always everyone else who's guilty. Those who pride themselves on resisting the temptations of covetousness and cupidity, who invest their money cautiously or stash it under the mattress, are really just being greedy in another way.

Greed never sleeps. Even attempts to depict its evils are twisted to mean the opposite. Gordon Gecko, unethical anti-hero of Oliver Stone's Wall Street, famously declaimed "greed is good" – and promptly became the poster boy for the next generation of venal bankers. Michael Lewis, former Wall St trader and author of the brilliant Liar's Poker about his time at Salomon Brothers in the 1980s, lamented that what was meant to be a cautionary tale became, in the eyes of some, a recruitment document.

The SCF deal is just emblematic of a system that rewards greed in general – and indeed requires it to fuel material consumption and economic growth. That doesn't exactly make greed good, but it certainly makes it rational.

finlay.macdonald@star-times.co.nz

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