The WOLF of WALL STREET (5/5 Stars)

Jordan Belfort and the Obscene Destruction of Wealth. 

It seems to have been completely forgotten by now but when Gordon Gekko made his ‘Greed is Good’ speech in Oliver Stone’s landmark 1987 film ‘Wall Street’ he was not waxing philosophically in a theoretical sense. He was speaking as a major stockholder of a company at a shareholders meeting. Specifically the company was Tarbell Paper and Gekko had bought up a large share of stock in order to streamline the company (sell off assets and fire unnecessary personel) and use the proceeds towards a large dividend payment. As a major stockholder he would certainly profit from such an action, but that was not the only reason Gekko put forth to justify his actions. Here is the complete speech:

[at the Teldar Paper stockholder's meeting] Well, I appreciate the opportunity you're giving me Mr. Cromwell as the single largest shareholder in Teldar Paper, to speak. Well, ladies and gentlemen we're not here to indulge in fantasy but in political and economic reality. America, America has become a second-rate power. Its trade deficit and its fiscal deficit are at nightmare proportions. Now, in the days of the free market when our country was a top industrial power, there was accountability to the stockholder. The Carnegies, the Mellons, the men that built this great industrial empire, made sure of it because it was their money at stake. Today, management has no stake in the company! All together, these men sitting up here own less than three percent of the company. And where does Mr. Cromwell put his million-dollar salary? Not in Teldar stock; he owns less than one percent. You own the company. That's right, you, the stockholder. And you are all being royally screwed over by these, these bureaucrats, with their luncheons, their hunting and fishing trips, their corporate jets and golden parachutes. Teldar Paper, Mr. Cromwell, Teldar Paper has 33 different vice presidents each earning over 200 thousand dollars a year. Now, I have spent the last two months analyzing what all these guys do, and I still can't figure it out. One thing I do know is that our paper company lost 110 million dollars last year, and I'll bet that half of that was spent in all the paperwork going back and forth between all these vice presidents. The new law of evolution in corporate America seems to be survival of the unfittest. Well, in my book you either do it right or you get eliminated. In the last seven deals that I've been involved with, there were 2.5 million stockholders who have made a pretax profit of 12 billion dollars. Thank you. I am not a destroyer of companies. I am a liberator of them! The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA. Thank you very much.

That’s right, the company was badly run. It had thirty-three vice presidents all being paid exhorbitant amounts of money for no particular reasona at all.  In other words, the company was ripping off its investors and should have been broken up, streamlined, and made more efficient. Does anybody remember this detail? I bring it up because this speech and this movie, to the horror I bet of its fire breathing liberal writer/director, has been credited as a main inspiration for the Wall Street we have today. There is an incredible speech in the Wolf of Wall Street that I’m going to put down in its entirety. It is given by Jordan Belfort, played by Leonardo Dicaprio, the founder of a brokerage firm named Stratton Oakmont. He is inspiring his traders to misrepresent to their clients that a bad shoe company, for which Stratton Oakmont owns 80% of the shares, is a must buy. The idea is to use their clients to drive up the price and then to sell their own shares at the peak. This will of course devalue the stock that Stratton Oakmont does not own but their clients do. This is dishonest and illegal and here is the speech:

Besides the “Greed is Good” mantra I would submit that there is very little similar in these two speeches. Our culture nonetheless does not make that distinction. Either you are against Greed and against both actions or you are for it and endorse both. 

The confusion can be directly traced to Adam Smith’s landmark treatise on capitalism “The Wealth of Nations” published in 1776. It is an extraordinary book in many ways but it also contains several errors. (Errors in groudbreaking masterpieces are not such an extraordinary thing. Read any tome of Aristotle and Plato and you will notice antiquated and mistaken arguments sandwiched between the words of wisdom on a regular basis.) One of the biggest errors concerns Adam Smith’s theory on the division of labor. He compares the winter coat of a poor worker in London with the loincloth of an African King. Why, he asks, can this poor man afford better clothes than a king? The answer is that London has a developed economy that uses division of labor. The African king made his own loincloth all by himself and did not have the time or capacity to make it any better. The poor man’s coat however had been touched by thousands of men. The herders of the sheep, the shearers of the wool, the transporters of the wool, the weavers, the salespeople, et cetera et cetera. The insight is that a man can do one simple task for one job far faster than he can do all the tasks for one job. If you build a network of all these different people doing their own respective simple tasks you will be able to produce far more than you could if one person did everything by himself or herself. The vast supply of goods that this network creates drives down prices for the goods themselves, which is why the poor man in a developed economy can afford better clothes than the African king in an undeveloped economy. Adam Smith than states that rational self-interest is what made the network possible. Each participant in the network was acting in his or her own self-interest not a sense of altruism.

And here is where Smith after pages of brilliant insights makes his error. Altruism is not the foil Adam Smith should have drawn for capitalism. After all not all rational self-interest is capitalism. An arms length transaction between two parties is in the rational self-interest of both parties. But if a man beats another man up and steals his lunch money that too is in the rational self-interest of the first man. Both men are being greedy. But one of them is trading. The other is stealing. That is a huge difference. In essence, it is the difference between capitalism and piracy/communism/fascism/etc and the fact that we as a society cannot tell the difference is a huge problem. The traders in ‘The Wolf of Wall Street’ take this corrupted thinking to its most logical and extreme end. They think they are capitalists and point to all the money they have gained as proof that they are. But they are not capitalists and this story is not a story of capitalism. It’s about thugs and thieves and the obscene destruction of wealth implicitly approved by a society that does not yet understand certain fundamental basics of economics.

“The Wolf of Wall Street,” is the fifth collaboration between director Martin Scorsese and actor Leonardo Dicaprio. It is arguably their best. It is certainly the most outrageous, funniest, crassest, excessive, and balls to the wall crazy movie they have ever made. It might have broken the f-word record, but I know for certain that I haven’t seen so much nudity in a movie outside of pornography. And the drug use, well I don’t think there is a scene in this 3-hour movie where somebody isn’t on something. The story comes from the autobiography of Jordan Belfort, a consummate salesman in that he could sell almost anything to anyone. After a brief stint on the real Wall Street, where his boss played by Matthew McCounaghey openly snorts cocaine in an upscale restaurant and counsels him to steal from his clients and masturbate at least twice a day, Jordan opens up his own penny stock brokerage firm in Long Island. The companies he shills are almost completely worthless but Jordan has an unbeatable sales pitch. In essence what he is selling is something way too good to be true. Get rich quick with penny stocks. He tells his clients that they can make money hand over fist by sitting on the couch at home doing nothing. Give me your money and you will win the lottery essentially. Jordan drives home this point by advertising his own lifestyle as proof that he knows how to make you rich. Look at Jordan’s big house, his beautiful wife, his cars, his hookers and drugs. Don’t you want to be just like him?

This is almost as important as the sales pitch because in order to become as rich as Jordan gets, he can’t do it all by himself, he needs hundreds of sales associates with the same unscrupulous tactics he has. He says to them: scam the people on the bottom and you will become as rich and decadent as me on the top. And boy does Jordan ever lavish on the temptations on his employees and clients. Every month, they have huge parties in the office with nude marching bands and strippers. Hookers roam the office corriders on a regular basis. Cocaine and Quallude use is rampant. For Jordan’s bachelor party he flew 50 of his coworkers to Vegas, hired 100 prostitutes, and trashed an entire floor of an upscale hotel. They have an orgy on the 747 to Vegas. The entire thing cost two million dollars. A drop in the bucket for a man who brags about being upset because he only made 52 million dollars last year. You see he was three million shy of a million dollars a week. He’s that kind of rich.

Do we care that people are doing this with other people’s money? For anyone wondering why the movie is three hours long, the answers are intertwined. The movie goes on so long because nobody stops Jordan. People don’t care apparently, probably because we have this ‘Joe the Plumber’ mentality about this type of excess. In other words, we aren’t against it because one day we hope to be on top doing the same thing. It’s the American Dream we’ve seen so many times in movies this year whether it was Spring Breakers, Pain and Gain, The Great Gatsby, or American Hustle. It is amazing how much bad behavior Jordan Belfort gets away with because he is rich. Sexual Assault, Public Intoxication, and Reckless Driving Under the Influence are just a few of his crimes. At one point he idiotically pilots his 170-foot yacht into a major storm and it sinks. A plane that comes in to rescue them crashes and the three people inside die. Jordan happened to be violating a court order at the time that instructed him to stay in the country. There are no consequeces.

The performance by Leonardo Dicaprio and also by his sidekick here Donnie Azoff, played by Jonah Hill, is arguably the best of his career. It is notable in its sheer lack of vanity. One particular scene stands out. Jordan and Donnie take these very old Qualuddes that unbeknownst to them take a very long time to kick in. When they finally do Jordan is far away from home. He is paralyzed by the force of the drugs and has to crawl out of the country club, into his car, and get home. It is a tour de force comic scene and the Leonardo and Jonah’s respective Oscar nominations are duly deserved.

The directing by Martin Scorsese and editing by Thelma Schoomaker is as always especially brilliant. He uses all the tricks in his bag in this movie and then some. In plenty of ways this is the biggest movie he has ever made. Imagine that, at 77 years of age he is still making his best movies. Killer impressive.

Go see this movie and bring along a dark sense of humor.