During the financial panic of the 2009 recession, Jack Bogle, founder of Vanguard Group and prolific author, dashed off a pithy book titled, Enough. For all the fiery zeal so characteristic of Bogle’s style, this reflectively soul-searching book subtly and obliquely confronted the intransigent problem of wealth disparity in the United States, an increasingly visible scourge that was last this acute in our nation as the roaring 1920s drew to an ignominious close.
Among Bogle’s laments is the insidious subjugation of character and virtue to the almighty dollar as the monetization of our nation’s tech revolution has coincided with a flattening of its growth curve. With the expansion of the pie slowing, the preoccupation of many wealthy and powerful has turned shamelessly inward toward enlarging one’s own personal slice of that pie.
A perennial critic of the finance industry’s motives, Bogle’s sights were trained again upon his peers—the investment managers and the C-suites executives of the companies whose shares they trade and steward as presumptive fiduciaries. Hedge funds, private-equity firms, and increasingly corporations capitalized on the political leverage inherent in their claim to be job creators and masters of capital allocation. Despite that rhetoric, the pivot away from pensions toward employee-directed retirement plans helped cement net profits as virtually the only measure of success in U.S. business, regardless of the consequences for labor, innovation, or long-term economic sustainability. That such reincarnated characters from the 1980s The Bonfire of the Vanities regularly achieve cult status only highlights how many adherents have once again come to bow at the altar of wealth accumulation.
Whether an inherent feature of capitalism (Thomas Picketty) or a cyclical phenomenon (Jonathan Tepper), at present, capital has gained the upper hand over labor. Lord Acton’s transcendent observation about human behavior rings true: “Power tends to corrupt and absolute power corrupts absolutely.” In a Lord Acton corollary that encompasses both ends of the ideological spectrum and is a gut punch to those who consider themselves exceptional: “Great men are almost always bad men, even when they exercise influence and not authority; still more when you superadd the tendency of the certainty of corruption by authority.”
What Is ‘Enough’?
In particular, Bogle finds it galling that the wealthy and powerful have given such short shrift to the existential question of how much of the pie is “enough.” A cynic might argue that they are so narrowly consumed with accumulation of wealth—and the implicit power, celebrity, and notoriety attendant thereto—that they’re missing the forest for the trees. Sooner or later they’ll discover that when extreme deviations in the division of the spoils between capital and labor reach a breaking point (and they all eventually do) the power may shift to the streets; those in gilded cages will be hostages.
“Enough,” however, is not merely a strategy for the sake of social stability. The game, “He who dies with the most money wins,” was always a loser’s game or, perhaps more fittingly, a game for losers—a hedonistic treadmill. The deification of money is a worthless idolatry, demanding all of one’s efforts and, beyond comfortable subsistence, little more than passing pleasures. No one gets to take their spoils with them beyond this life.
Even historical renown is limited. No matter how big one’s horde, entrepreneurs will rise out of technology’s innovative cauldron and sack the reigning king of the sand pile. Who saw Jeff Bezos’ onslaught before he was sheltered behind Amazon’s winner-take-all moat? To have and to hold should not apply to wealth, and it will ultimately fail Amazon’s chief. Those who give, like Warren Buffett and Bill Gates, will be treated far more kindly. The scrooges will not only be forgotten, they’ll be mocked in every metaphorical retelling of A Christmas Carol.
In Enough, Bogle relished telling a story that, for anyone who knew him well, was unquestionably autobiographical. He recounted that authors Joseph Heller and Kurt Vonnegut were attending a party hosted by a hedge fund manager. Vonnegut told Heller that their host earned more in a day than Heller had earned in years from the royalties on his bestselling novel, Catch-22. Heller replied, “Yes, but I have something he will never have … enough.”
For Heller, “enough” was not a means to fabled generosity or recognized philanthropy. It was a question of contentment. This is a spiritual question, for it asks about meaning. What is good? What makes for happiness? What does thriving look like? These are the fundamentals of human existence and, by extension, social organization.
Might a new definition of “enough” arise from the chaos of coronavirus and its accompanying economic catastrophes? To illustrate with the language of the balance sheet, what if “enough” becomes thought of as an intangible? What if it gains meaning and value in the world of business and finance? Einstein reminded us that “Not everything that counts can be counted, and not everything that can be counted counts.” Aphorisms like “The measure of a man is not what he gets but what he gives” nod to other eras in which finding satisfaction in the sufficient—and dispersing the excess fruits of one’s labor broadly—was a positive attribute of character. Today, on the other hand, all too many of us tend to indiscriminately herald the maximizer of the bottom line.
The Catalyst of COVID-19
Could the COVID-19 pandemic of 2020 be a catalyst for change? It has been a long time since an event so abruptly hit the frenetic-life pause button, forcing Americans and, indeed, many around the globe to reflect deeply on the state of our lives. Moreover, in the ironic description of the least skilled and lowest paid workers as “essential,” we may get a clearer grip on what is most important in life and who is responsible for the best of our experiences.
The hyperactive federal government wielded the legislative pen in attempting to preempt the pause, aided and abetted by politically independent banker (and, seemingly, buyer) of last resort, the Federal Reserve. Despite the humanitarian relief it proposes to bring, history’s epitaph for the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) and its multi-trillion dollar add-ons could well be much like other massive spending bills that passed unanimously. They’re almost always bad law.
The CARES Act already has had myriad unintended consequences. The federal addition of $600 per week to unemployment payments in more than half the states result in benefits greater than the earnings from the jobs lost. Currently, and worse if this program is extended as occurred during the Financial Crisis, the perverse incentive creates a counterproductive moral hazard, regardless of your opinion on what a living wage should be.
Further, due to antiquated infrastructure, loan delays at the Small Business Administration have failed the smallest of businesses that didn’t have the resources to get their applications first in line. Banks that originate the loans also are guilty of cherry-picking borrowers.
The legislative response aside, the complicity of the Fed in perpetuating the status quo of dramatic wealth-disparity must be addressed. What began as the “Greenspan put” has morphed into the ubiquitous Golden put. The socialization of risk, an oxymoronic antisocial concept at its root, gained legitimacy through time and repetition over the last three decades. This latest iteration is a shocking sign of just how far the engine of deliberation and reason has run off the tracks.
Fed actions contribute to wealth-disparity because the majority of Americans do not own substantial financial assets. Meanwhile, the central bank is obsessed with backstopping any significant decline in the price of stocks or bonds. While I believe that Fed actions have mostly psychological impacts, it’s unavoidably true that it is attempting to maintain the wealth of those with a vested interest in the sanctity of the markets.
Further, the Fed’s playbook has contributed to the economic fragility now rampant in our economy. The Fed has aided and abetted the pursuit of more at all costs, consequently hollowing out U.S. business. Corporations have overextended themselves, tempted by low interest rates and willingly choosing to believe that risk has been tamed by the central bank. When the pandemic came knocking, manifold weaknesses hardwired into the economy, from supply chains to labor, were laid bare.
With this country’s emperor, writ large, found naked, redefinition of “enough” may incrementally see the light of day. Massive imbalances have accumulated in the pursuit of wealth. With so many penniless in the world’s richest nation, it would seem that scales of social and economic justice are out of balance. The virus may clear the fog so the wealthy and powerful can see that self-absorption leads, socially, to instability. Personally, it begets loneliness and is the antithesis of peace and joy.
In a time of exponentially cascading need, we might remember the call to be our brother’s keeper. Such individual investment is invariably superior to the bureaucracy often endemic to myriad government programs, but both responses are needed. Such a supplemental solution does require, however, being a brother, one-on-one, up close and personal. It’s a bottom-up approach, lending a figurative hand to others, motivated by personal relationship, not mandate. The great and affirming revelation is that, to the openhanded, the search for those who shall receive is a joy as great as the giving.
In the spirit of full disclosure, the author is a member of the top 1%.