Greed is Good

My previous blog was in response to a Motley Fool Article that quoted Warren Buffet, “Be fearful when people are greedy, be greedy when people are fearful.” It is Warren Buffet’s suggestion this is a good time to invest in the stock market. I commented in the article, although this sounds like good advice, my concern is when do we cross the line between greed is good, and greed becomes bad?

Michael Douglas’ character Gordon Gecco quoted, “Greed is Good.” Yes, greed can be good. It is what makes people and society prosper. Greed produces ingenuity and industrialism. One can be greedy for knowledge and life, but greed can also destroy. One such example; over a century ago Pennsylvania Textile Barons including Andrew Carnegie and Andrew Mellon built a hunting lodge in the hills of Johnstown, Pennsylvania for their pleasure. In doing so, they raised a lake reservoir supported by a shoddy dam. While not maintaining the dam with the increased water level in the reservoir they used for swimming and paddling around, the dam broke and flooded the city of Johnstown, killing over two thousand people. Some say it was their selfishness and greed that caused the Johnstown floods.

It was a merry band of financiers, called the “Robber Barons” responsible for the stock market crash of 1929. These men are well known today, as they still are represented by banks and investment brokers, J.P Morgan and Rockefeller. Their greed and corruption thrust America into the Great Depression. And for those who don’t realize how depressing, I urge you to read John Steinbeck’s, “The Grapes of Wrath.”

One current event I would like to mention is the recent suicide of German Billionaire, Adolf Merckle. His company has lost over a billion dollars in the global financial meltdown and this drove him to suicide. The kicker to this story is Merckle was a multi-billionaire, one of the ten richest men in the world. He still had billions of dollars after his financial loss, and to make it more ridiculous a couple days later, the German banks bailed out his company. The point of this story, Adolf Merckle valued money more than life itself. Even though he was still stinking rich, he could not handle the loss of what he found most precious-money. This is indeed very sad.

Getting back to my point in my original post, these financial wizards are looked upon to many as American heroes and icons in which someday the average Joe can achieve massive amounts of wealth. History and current events tell us, excess greed and desire for extreme wealth is irresponsible for the good of the nation. Although being rich is the American way, I honestly must question the patriotism of any man or woman who desires to make money for their own personal gain and the exploitation of others. And personally, I have to question all these “Financial masterminds,” who continue to drive our economy into the ground. Should we Americans trust a greedy financial tycoon to run our economy for these men are out for their own good, not ours? We can easily take Warren Buffet’s advice, and for a time investors will be on their best behavior but how do we prevent history from repeating itself as it already has?