Financial reporters have long wondered just what goes on inside Kappa Beta Phi, Wall Street’s elite secret society.
Kevin Roose, then at the NYT and now at New York, just walked into its annual induction ceremony and found out. Suspicions confirmed: It’s not pretty.
Bill Mulrow, a top executive at the Blackstone Group (who was later appointed chairman of the New York State Housing Finance Agency), and Emil Henry, a hedge fund manager with Tiger Infrastructure Partners and former assistant secretary of the Treasury, performed a bizarre two-man comedy skit. Mulrow was dressed in raggedy, tie-dye clothes to play the part of a liberal radical, and Henry was playing the part of a wealthy baron. They exchanged lines as if staging a debate between the 99 percent and the 1 percent. (“Bill, look at you! You’re pathetic, you liberal! You need a bath!” Henry shouted. “My God, you callow, insensitive Republican! Don’t you know what we need to do? We need to create jobs,” Mulrow shot back.)
Roose got found out later in the proceedings and what does billionaire Wilbur Ross, the head of Kappa Beta Phi, promise him, if he’ll keep this all hush-hush? Access, which to a Dealbook reporter of all people, is highly valuable currency:
“I’ll pick up the phone anytime, get you any help you need,” he said.
“Yeah, the people in this group could be very helpful,” Lebenthal chimed in. “If you could just keep their privacy in mind.”
I wasn’t going to be bribed off my story, but I understood their panic. Here, after all, was a group that included many of the executives whose firms had collectively wrecked the global economy in 2008 and 2009. And they were laughing off the entire disaster in private, as if it were a long-forgotten lark. (Or worse, sing about it — one of the last skits of the night was a self-congratulatory parody of ABBA’s “Dancing Queen,” called “Bailout King.”) These were activities that amounted to a gigantic middle finger to Main Street and that, if made public, could end careers and damage very public reputations.
Fortunately, Roose turned him down.
— This good Wall Street Journal piece untangling the unemployment rates in Europe and the US shows why reporters need to look well beyond headline unemployment numbers.
Unemployment is still high, at 6.6 percent in the US, but the eurozone makes that look like nothing. Its unemployment rate is 12 percent. But labor participation rates and demographics matter:
Looking more closely, the picture is more nuanced. The unemployment figures flatter the U.S. labor market. That is because a major contributor to the fall in the U.S. unemployment rate has been the withdrawal of large numbers of Americans from the workforce. The number of people employed has expanded—though data suggest only in line with the working-age population. But the labor-force participation rate—the number of people both in work and seeking work as a percentage of the total population—has shrunk.
By contrast, this rate has stayed largely unchanged in the euro zone. “If the euro area had seen a drop in the labor-force participation rate proportional to the decline experienced by the U.S., its unemployment rate would be 9.5%, below where it was at the beginning of the sovereign-debt crisis,” wrote Thomas Klitgaard and Richard Peck, two economists at the Federal Reserve Bank of New York, in a blog post this month.
Mr. Regling says it also suggests the social consequences are less dire in Europe than a direct comparison of unemployment rates would suggest. “Despite the unemployment, more people actually have a job and an income than in the U.S. as a percentage of the population,” he said in a recent interview.
Bet you didn’t know that significantly Europe has more prime-working-age citizens working than America does.