Since Gordon Gekko and Patrick Bateman embraced the American psyche towards the end of the twentieth century, there has been a sort of subconscious belief that psychopathic behavior and working on Wall Street go hand in hand. That to truly succeed and become super-rich in the modern world of finance, one must be cutthroat and apathetic towards others. And its not surprising really, with the overall behavior on Wall Street resembling that of a cunning sociopath in recent decades.
Antisocial personality disorder features a “pervasive pattern of disregard for, and violation of, the rights of others,” according to the DSM. People with the disorder tend to lie and manipulate for their own good while lacking the ability to feel remorse. With the widespread fraudulent behavior and greed on Wall Street, as a whole it tends to resemble this, but how much does the ethos on Wall Street influence the people working there? The documentary, “The Corporation” did a good job in revealing the psychopathic nature of corporations, but what about individuals running them?
A strange and revealing interview with Former Chief Executive of Countrywide Financial, Angelo Mozilo, comes to mind. Before going into what he said, a quick rehash of his contribution to the financial crisis. During the peak of Countrywide’s fraud, Mozilo wrote in an internal email that in all of his years he had “never seen a more toxic (product),” than one of his companies loan products. He also called it “poison.” But this did not stop Countrywide from selling the products as if they were firm investments, leading to the disaster. In 2010, Mozilo agreed to pay $67.5 million (Countryside and Bank of America paid $45 million of it) to settle a civil fraud case with the Security and Exchange Commission. He reportedly earned $535 million from 1999 to 2008.
He later told the Financial Crisis Inquiry Commission that “Countrywide was one of the greatest companies in the history of this country and probably made more difference to society, to the integrity of our society, than any company in the history of America.”
In the recent interview, Mozilo expressed confusion as to why people were angry with him. “Countrywide didn’t change. I didn’t change. The world changed.” He said, and then, “No, no, no, we didn’t do anything wrong...Countrywide or Mozilo didn’t cause any of that.”
It seems that either Mozilo is losing his memory in old age, or he lacks the ability to feel remorse. Selling loan products that he knew were “toxic” while smiling and lying to investors appears to be a sure sign of disregard for others. And talking about yourself in the third person, as Mozilo did, suggests intense egocentrism, another symptom of anti-social personality disorder.
A 2012 report from CFA Magazine by Sherree DeCovney claimed that at least ten percent of people working in the financial industry are psychopaths, compared to just one percent of the general population. Of course there are various degrees of psychopathy, measured by the Hare Psychopathy Checklist. Rated on a scale from 0 to 40, true psychopaths score in the top 25 percent scale. There are many people considered “almost psychopath” who don’t make it into the the top scale, but still show the signs. With that, the percentage of people on Wall Street with a degree of psychopathy likely rises.
It makes sense that these types of personalities would flock to Wall Street, where there is a great deal of risk involved with the possibility of big rewards. Like in a casino, ego’s run wild with risky bets and speculation. But in a casino one risks their own money, on Wall Street they risk everyone else’s. To sell securities that are known to be “poison” or “toxic” to pension funds is truly the act of a psychopath. No remorse, no empathy, just greed and personal gain.
With this in mind, wouldn’t it be wise to be very suspicious of these still too big to fail/jail investment banks? Do psychopaths ever learn? Do psychopaths one day become empathetic towards the well being of others? The answer is no, you can’t teach a psychopath empathy. And you can’t teach an investment bank to stop manipulating and lying for profit. This is why Wall Street needs regulation, like any other profit seeking industry. It also need punishment. People who commit fraud should not be able to bribe their way out of prison with million dollar fines. To expect values to just change without punishment resembles another mental disorder, insanity.