Perception

I saw the well received movie by the acclaimed director Martin Scorsese The Wolf of Wall Street yesterday, and I have to say the $7.50 student rate was truly a great bargain. The three-hour -long movie can be a little overwhelming, but from the laughters from the opening till the closing credits I can conclude that everybody enjoys it. It is definitely a great piece of entertainment (rated R, of course); it’s also a powerful piece of art, and perhaps most importantly, it’s one of the most thought-provoking storytellings that we don’t have the luck to encounter every year.

The film’s screenplay is an adoption of a book with the same title written by Jordan Belfort, the main character portrayed by Leonardo DiCaprio in the story. (Mr DiCaprio also just won the Golden Globes “Best Actor” award because of his performance in the film.) The story is mainly about the life of Mr Belfort as a stockbroker in the 1990s, when he started a Wall Street company making money by selling people stocks, most of them through security frauds, how he “succeeded” and was later sentenced for 3 years in prison as the result of a federal investigation. The movie is definitely worth watching, so I will try my best to avoid spoilers. As I said before, it’s a striking masterpiece because of it draws people to think seriously about our society after watching it. I’m not going to impose any of my thoughts on any one of you, but rather I’d like to provide my two cents on this topic by answering a series of questions that might be frequently raised by the audience after watching the film.

The questions are:

1. Is the story real?
2. Is Mr Belfort a jerk?
3. What is a fraud?
4. Is he sufficiently punished? If not, why not?
5. Can we fix this?
6. What should we do next?
7. Is it a good movie?

1. Is the story real?

In my opinion, the short answer is no, and the long answer is that it depends on what you care about the story. I haven’t read the original book by Mr Belfort, and perhaps I will never buy it (I will explain the reason in the end), but based on my own judgement of the movie itself,  my personal knowledge of the US financial sector, and several news reports, column articles related to this movie I think I’m quite confident with my conclusion: the moral portrayed in this film definitely reflects the truth, but some details about the character himself are utterly wrong.

Mr Belfort tried to make himself look nicer in his story, and the filmmakers did their best to be  as sarcastic as possible without pissing off either Mr Belfort or the federal government. I haven’t read the book, but Mr Belfort’s decision to publish a book about his “absurd” life in the past seems like, at least in the slightest way, his personal attempt to repent and to be a better person, and it is not hard to imagine how he portrayed himself as a “dream builder” of many of his workers/supporters, instead of a reckless criminal. The filmmakers, however, were excellent at rendering the character by confining the character’s portrayal as disgusting, reckless, irresponsible, yet still shed lights on aspects where he behaved exactly like a normal person: the desire to have a stable family, loyalty to people in his circle, relationship with his family members, etc. The screenwriters, directors, and especially actors did much to prevent the illusion of Mr Belfort being portrayed as a “good person”, and in order to achieve this they literally threw everything they can at the character yet still avoiding an NC-17 rating: distorted moral, drug, prostitution, sex, f-words… Oh yes, speaking of f-words, this is probably THE single movie that has the most f-words in its scripts: the entire 3-hour running time is approximately half-filled with f-words.

Nevertheless, with all what’s done by the filmmakers, Mr Belfort’s genius still buys him “rooms for interpretation”. According to a comment by a former federal prosecutor, Mr Belfort in real life was nothing as what’s portrayed in his book or the movie. First of all, nobody called him “the wolf of Wall Street”, let alone Forbes, until his own book came out in 2007. Secondly he cooperated with the federal investigation with very little flight-backs. Based on these facts I could reasonably doubt every element in that “heroic” and tear-jerking farewell ceremony where Mr Belfort changed his mind and stayed with the company. I have to say there are a few moments in the movie like the farewell ceremony where Mr Belfort moved away a little from the “jerk” end of the spectrum. The filmmakers could have eliminated all scenes like this, but then the movie will be reduced to another harsh, simple, and monolithic criticism towards Wall Street, stripping the character off all characters but disgust, making it less thought-provoking from an art perspective and probably more difficult to produce from a business perspective (they cannot simply piss off Mr Belfort, who sold them the adoption right of the book). I admit that if it’s not for viewing those comments from the federal prosecutor afterwards, I could have shared a slight feeling of sympathy towards Mr Belfort after watching the movie. As I said at the very beginning, all of this is part of the result of Mr Belfort’s ingenious act of publishing a book portraying his absurd life and handing it over to Hollywood. The former federal prosecutor mentioned before criticized the movie (especially its ending) with the following simple but powerful words “ That may be art, but it’s wrong”. I am personally in favor of the filmmakers, for their attempt to let people rethink about Wall Street by sarcastically “glorifying” Mr Belfort’s life as portrayed in his book. At least this film drives a lot of people like me to dig deep into Mr Belfort’s personal history and to come up with their own judgements. But always keep in mind, Mr Belfort is a hustle: he made a living by bending truth, and there is a fair chance that three years in prison doesn’t change him at all.

2. Is Mr Belfort a jerk?

This is a much more complicated question than the previous one. For we ordinary people who do not work on Wall Street, obviously he is a jerk. He stripped tens of hundreds of families off their assets and put the money in his own pocket, he tried to bribe federal investigators, and he lived a corrupted life with almost no morals left. Well, to be specific, that’s our moral, or the moral that is believed in by the general public of the United States and most other countries in the world. Therefore, almost like an happy-ending, he was prosecuted and put into jail. He served his terms (3 years, in a minimum security prison in Neveda), wrote two books, made some money, started training salespersons, and just recently he is engaged again, settles down in California, and enjoys weather so far. Wait a minute… Sounds not quite like what a jerk deserves right? Okay let’s roll back and change our premise a little bit.

What if Wall Street is not all that different at all? Many people now become aware that Wall Street people share a moral that is quite different from the rest of the world. A user comment on The New York Times website describes it as “1. it’s hell being sober; 2. being rich solves your problems”, and says it “sounds like a whole lot of America to me”. Putting aside any argument on Wall Street’s roles and the US’s function as a sovereign state, it is absolutely not hard to imagine Mr Belfort was just a normal but unlucky person for those working in that field. The interesting thing about Wall Street is that it ended up becoming the largest player of the US economy, despite all the laws, regulations, and if you’d like to mention, moral conflicts that go against it. What is feared is that the “jerkness” of Wall Street people like Mr Belfort is actually shared by people we trust and even voted for (I can’t vote for anyone for real because I’m Chinese, so I’m talking about politicians in democratic countries), or even just ordinary people like us. If you were put into his shoes back then in Wall Street would you act differently? Hasn’t there been times when you truly believed that you can create something out of nothing? There is a fair chance that these terrifying revelations reflects a whole lot of the truth.

I think I should stop right here for now, since we can discuss it further when answering other questions. The simple answer to this question is an obvious “yes”, but thinking more deeply we might even find traces of Mr Belfort deep in ourselves. Everyone can be a jerk in this world, Wall Street is just the one place in this world that can activate these lamented “jerkness” buried deep in ourselves.

3. What is a fraud?

This question looks much like a Wikipedia question and I bet many consider it irrelevant to what I’m trying to do. Hence, I’d like to ask a few additional questions to show it’s actually related:

• When Mr Belfort’s firm called someone and persuaded him/her to buy penny stocks, would you call it a fraud?
• When Apple says the new iPhone will be “The best iPhone ever” but you find it less favorable than previous models, would you call it a fraud?
• When you paid 10 bucks to watch a well-marketed movie but found it to be the worst movie you’ve ever seen, would you call it a fraud?
• When the leader of your country promised everything at the his/her campaign but achieve little in the end, would you call it a fraud?

So, for most of us, we answer “negative” to all questions but the first one. Okay, to this point probably many people already feel something strange here. All of the behaviors described above involve telling some lies, persuading the victim into making the “wrong” decision, and perhaps extracting money from the victim to whoever makes up the lie in the first place. From a moral perspective they can be equally bad, the only difference is the legality of such behaviors. Oh well we may further conclude that our laws are broken so we need to fix it, but wait, there are only so few such practices that can be defined as frauds, or illegal, whereas a large number of them are identified as “exercises of freedom of expression”, or even textbook guidelines for doing things like marketing. In a word, there is no way to fix our law. What do we sacrifice when we valued freedom of expression as an inalienable right for everyone born on this planet, and what is at stake here? Had we learned how to keep ourselves from doing immoral things, we wouldn’t even have a history with so many allegories to educate our children. That’s our problem, and unfortunately, our opportunity at the same time.

What makes a fraud a fraud? What is broken in the first place? We always have answers in ourselves.

4. Is he sufficiently punished? If not, why not?

The trailing question indicates my negative answer to the first one. I believe most people would agree with me. 3 years in prison for defrauding over 100 million dollars from the victims, that’s literally a sarcasm of the justice system of the US. Well the problem isn’t unique to the US, though. For example, in China, unless the violating person holds a government post or is involved in bribing a government official, no severe punishment (such as the death penalty or the less powerful and often laughed at life sentence) will be given. Mr Belfort could have been sentenced to prison for 25 years, and it was his cooperation with the federal investigation that won him the 22-year pardon. 22 years, ladies and gentlemen, 22 years! He won 22 years simply by giving up his accomplices, and according to the federal investigator writing on the NYTimes website he cooperated quite happily after his arrest. Huh that was a real bargain, I wonder who can be more generous than the federal government. Perhaps the prosecutors were saving their subpoenas for larger criminals like Morgan Stanley and Goldman Sachs, but they were either too naive or too “hesitated” to realize how desperate the situations were.

So here comes the hard question: how could this happen? To find answers to this question I recommend everybody to watch the Academy Award winning documentary Inside Job, if you haven’t watched it before. Even for those who saw it before I still recommend seeing it for another time after watching The Wolf of Wall Street. The documentary examines what happened after Mr Belfort’s case on Wall Street, and how did these ingenious people in companies with big names keep scaling up what Mr Belfort did in the 21st century and successfully get away with it, even till today. The documentary suggests the existence of an influential chain from Wall Street firms all the way up to the top government officials in Washington, as well as prominent figures in academia. Many argued that the federal investigators, portrayed with integrity and responsibility for the public both in the book and in the movie (yet another ingenious act of Mr Belfort as a writer), were merely doing their jobs chasing bonuses from their private employers and opportunities for promotion. Many of these arguments sound like conspiracy theories therefore I personally do not endorse any of them, but we can see how the picture is blurred given what we see in the movie, where the good and the bad are relatively easy to distinguish. The world does not quite work in a way that most of us would imagine, and that’s one possible explanation to the trailing question.

Without delving deep into what’s being said in the documentary, we should be aware that most Wall Street criminals did not receive any punishment at all by doing something far more immoral and devastating than what Mr Belfort did in the 1990s. US financial corporations have developed ways to seamlessly circumvent current regulations and the composition of their victims also shifted from individual investors to larger entities like governments and corporations around the world. It is almost the case that Wall Street is illegally extracting money from every taxpayer on this planet, and that’s making it even more powerful.

5. Can we fix this?

My honest answer to this question is a sorry “no”. Actually I might answer the same to a perhaps more provocative question like “Should we fix this?”. Let me explain why. As a non-American citizen I believe I possess a standpoint that is more objective than many American people. The problems reflected in this film (debauched lives of Wall Street executives, the moral debate, and insufficient punishment) cannot be solved because 1. the United States economy largely depends on its financial sector, aka. Wall Street; 2. Wall Street is way ahead in the cat-and-mouse games with federal investigators; 3. more countries (countries like China) are going to liberalize their economy in a US fashion.

The major reason why problems with Wall Street cannot be fixed is that nobody can afford to do it: it’s too big to fail. After moving its manufacturing sector almost entirely abroad, only two main players left in the US economy: technology and finance. Sadly in our economy money is the issue to everything, and the financial sector’s job is create money out of nothing, which sounds a heck of a solution to our money problem. Government needs money to run, technology company needs money to innovate, and after all people need money to buy food. There have been arguments that during the global economy collapse of 2008, the US was the biggest winner by gathering all money losses of foreign governments and corporations by shorting, and the financial sector grew even bigger after the crises. Of course the money almost all went to the richest 1% of the US population so not every person in America feels the benefit, but Wall Street does invest a small portion of its money into other aspects of the economy, giving it enormous bargaining power against the federal government. All governments are interested in money today, and Wall Street would do anything to make more money. What a terrible mutual interest we have here. Many American people argue that Wall Street should be shut down entirely. What doesn’t come across their mind is that by doing it the country will possibly lose its ability to continue its investment in new technologies, its military dominance in the world and therefore its political influence, and let alone its position as the largest economy on this planet. It is the American people that can’t afford the consequences. The politicians are well aware of it, and Wall Street relies on it to make sure that it’s not going to be worse off than the general public of the United States.

Even if the federal government somehow decides to crack down Wall Street’s illegal practices, Wall Street is ready for it and it is quite confident about getting away with it. Quite different from Mr Belfort’s time when evidence can be found by tracking a single person down, Wall Street firms now buy assets and do transactions under the name of corporations, making federal investigation very hard to proceed. Corporations and people are alike in many ways, but federal laws usually cannot sentence a corporation to prison. Wall Street people will continue to investment their genius in alleviating the legal risks, and their strong connections with government officials and academia prevents anyone else to take a lead in this cat-and-mouse game. Even if we are playing a fair game, Wall Street is simply too powerful to beat.

From a pessimistic point of view, problems associated with Wall Street is not only insolvable but also like an epidemic, spreading to many places previously thought to be immune to many of the problems, with China being the latest example. In order to keep the economy growing at a relatively fast rate, the Chinese economy needs funds from capital market that are beyond what can be supplied by the government. The Chinese Communist Party has just decided to further liberalize “market economy”, and it is expected that the financial market will also be further deregulated, allowing more Wall-Street-style practices to be tolerated. Given that the Chinese market still remains relatively unfree and very heavily monitored by the central government, Chinese people perhaps do not need to worry too much about another Wall Street thriving in Shanghai or Beijing for now, but many Chinese people are already struck by the unprecedentedly widening gap between the poor and the rich. The idea behind a financial market completely violates our foundation as a communist country, yet we need it to become powerful and many people live a better life thanks to it. Thanks to strong regulations and probably ideological factors the Chinese financial market functions far less aggressively compared to Wall Street, but nobody knows how long we can keep it this way.

6. What should we do next?

This is one of those typical questions with no single answers. What a lot of people end up doing is to do nothing but watch. Some people went on to streets to after that documentary came out (I’m not saying they are related, but the timing is indeed interesting), but the public anger soon subsided within a few weeks. As discussed before, it’s nearly impossible to fix problems with Wall Street from today’s perspective, and things are getting worse for those who want a change, so what’s even the point of discussing what to do next? Well, the fate of a country should be decided by its people, and there are certainly things can be done to make it better (or less bad…), so I choose to leave this question to everyone of you. It’s 100% okay if you think you can live with Wall Street as we always did, and it’s perhaps better if someone with some power would like to do something for god’s sake. To conclude it with the last line from the documentary: it won’t be easy, but some things are worth fighting for.

7. Is it a good movie?

After a lengthy discussion let’s get back to Mr Belfort’s story and the movie itself. From an art point of view the movie makes good use of the aspects in the story where a movie is a more powerful form of storytelling. Mr Belfort’s debauched life is portrayed inside out, and disagreeing with the moral depicted in the story is not a good reason to reject the movie as a whole. Many audiences have problems with the f-words in the movie, but the truth is there are as many, if not more f-words in Mr Belford’s books, so at least it’s not the filming crew’s fault. Many movies made these days either convey simple and naive ideas using overwhelming visual effects, or do not try to communicate at all, whereas this one exposes a problem in an extreme way and let people think, and think deeply. The judgement on this film is of course on everyone’s own. I personally consider the film a masterpiece, and its 8.⁷⁄₁₀ rating on IMDB says a lot of people agree with me.

One last note: I promised to explain why I will probably never buy Mr Belfort’s books in the future. We should all be aware that the movie and his books are making him a fortune, which he deserves legally, but not quite morally. The federal government orders that 50% of his income should be submitted to compensate the victims of his business in the past, and the government has to take aggressive steps in order to collect the full amount. I have plenty of reasons to believe Mr Belfort is the same jerk who founded Stratton Oakmont and is not repentant in any way, so I choose not to support him directly by buying his books. I don’t know if I’ll protest by reading illegal copies of his books (protesting by violating the law is not sane after all…), at least I can live with the idea of not buying anything that could directly fund him. He deserves a miserable life after what he has done, and I will try my best to keep it this way, at least until his true, faithful redemption.