Revelations of accounting fraud at Enron, WorldCom, Merck, et
al. have outraged Congress and millions of investors. That highly
touted businesses turn out to have overstated earnings has harmed
not only their stocks’ value but the financial markets overall.
Last Tuesday President Bush said corporate executives who tell such
lies belong in prison.
A more forgivable kind of financial exaggeration
was reported this week by the New York Times, in a story
on the federal compensation fund for victims of 9/11. To help the
fund’s administrators calculate income lost by those who died in
the World Trade Center, former employers have been preparing
reports, with information that victims’ survivors could find
disillusioning.
“There are some people who are surprised to hear that their
loved ones weren’t who they thought, or had unrealistic views of
what their wife or husband did, what they earned, what their
potential was for the future,” a lawyer for one of the employers
told the Times. Some families have been disappointed to
learn that their dead relatives’ bonuses — the real indicators of
success on Wall Street — were far smaller than what they’d
claimed.
Though the Times is too tactful to say so, the bereaved
have more than a sentimental interest in evaluating the victims’
careers. To put it bluntly, the more income deemed lost, the more
compensation they get. But let’s assume that isn’t their main
concern. Money has a symbolic value even higher than what it can
buy. That’s what makes it such a delicate subject.
Be honest. Which of the following questions would you least care
to answer honestly to a stranger?
* “Are you religious?”
* “Are you heterosexual or homosexual?”
* “How much money did you make last year?”
For most of us, no fact of life is more intimate than our income
level. Our closest relatives usually don’t know what it is. “I
almost don’t want to find out what Joanne’s salary was, because
that was her private life,” the mother of a 9/11 victim told the
Times, as if learning the amount on her late daughter’s
pay stub might compromise the woman’s dignity.
Why are we so loath to say what we make? If my own feelings are
typical, we fear that doing so would make us vulnerable. But
how?
Unless you’ve lied on your taxes, the government already knows
what you earn. A high figure might get you extra calls from
telephone solicitors, but in that case you can afford an unlisted
number. A low figure might earn you smirks from your neighbors and
high school classmates, but they can go you-know-where.
Still, we almost never tell, and though we often speculate
behind people’s backs, we never ask directly.
At least that’s how it is among Americans. A friend of mine who
lived two years in China found that one of the first things he was
asked about was his salary. People are more discreet in Italy,
where I live, but they don’t treat the subject with the same
solemnity as we do. Europeans’ social standing still depends at
least as much on birth and occupational prestige as on income; and
for the big chunk of them with state jobs, pay is on the public
record anyway.
In a country as culturally diverse and business-oriented as the
United States, money is the most commonly accepted determinant of
one’s place. And in a nation so ambitious, one’s place is something
one aims to better. By keeping the size of our income to ourselves,
we naturally hope others will overestimate it, in accordance with
our own conception of what we’re worth.
Since debt ceased to be a vice, we have tended to consume more,
and more conspicuously, than we can afford; yet most of us do so in
good faith, sure that we can eventually repay the loans. Spending
beyond one’s means, like exaggerating the size of one’s annual
bonus, is not in itself admirable, yet it can be the expression of
a certain strength: the faith that we can make reality conform to
our dreams.
Cooking the books to keep share prices high is robbery. Taking
out a second mortgage to buy a fancy car is reckless. But letting
others think you’ve already made it — when in your heart you know
you soon will — is typically and poignantly American.
