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.