New York’s fun story about Wall Streeters not Getting It is one of the best yet on the difficulty of some who most benefited from the second Gilded Age to realize that it’s come to a close.
Gabriel Sherman takes us into the siege mentality of the holdouts, jaunting around Castle Manhattan to come up with an impressive collection of, if not quite “Let them eat cake” quotes, ones in a similar vein—and some that come darn close:
“No offense to Middle America, but if someone went to Columbia or Wharton, [even if] their company is a fumbling, mismanaged bank, why should they all of a sudden be paid the same as the guy down the block who delivers restaurant supplies for Sysco out of a huge, shiny truck?” e-mails an irate Citigroup executive to a colleague.
Here’s someone who’s really, really ticked off that their tax rate is going up 3.5 percentage points:
“The government wants me to be a slave!” says one hedge-fund analyst
Here’s a woman who worked at Lehman Brothers, and whom Sherman implies made $2 million a year:
“People just don’t get it,” she says. “I’m attached to my BlackBerry. I was at my doctor the other day, and my doctor said to me, ‘You know, I like that when I leave the office, I leave.’ I get calls at two in the morning, when the market moves. That costs money. If they keep compensation capped, I don’t know how the deals get done. They’re taking Wall Street and throwing it in the East River.”
Next time this woman has a pipe break in the middle of the night, I hope her plumber prorates her bill on a $2 million-a-year basis.
Sherman points out that even the people who get that their jobs aren’t that important in the grand scheme of things don’t really get it. This former Bear Stearns executive admits that doctors are ultimately more worthy, but still:
“We’re in a hypercapitalistic society. No one complains when Julia Roberts pulls down $25 million per movie or A-Rod has a $300 million guarantee. We have ex-presidents who cash in on their presidencies. Our whole moral compass has shifted about what’s acceptable or not acceptable. Honestly, you can pick on Wall Street all you want, I don’t think it’s fair. It’s fair to say you ran your companies into the ground, your risk management is flawed—that is perfectly legitimate. You can lay criticism on GM or others. But I don’t think it’s fair to say Wall Street is paid too much.”
If this guy has really never heard anyone complain about A-Rod getting $30 million a year, the bubble is more airtight than I’d thought.
Sherman neatly punctures the Bear Stearns guy’s “logic,” noting that Wall Street’s greed and myopia have put the entire nation in grave peril, unlike, say, Runaway Bride.
But the out-to-lunchness continues. Here’s somebody who’s still buying the debunked CRA/Fannie/Freddie-Did-It Grand Theory of the Crisis (as postulated by The Wall Street Journal editorial page):
“There’s this perception that the people on the Street were making money for nothing,” says a mortgage-investment banker. “You have a political and media class who make the mortgage originators and bankers out to be the villains. But are they? They were doing what Congress wanted them to do. Is the guy who lied on his mortgage application the victim here? This whole narrative that the downtrodden were the victims and the money guys were the perpetrators really doesn’t stand up to rational challenge.”
Felix Salmon, over at his new digs at Reuters, writes this on the disbelief by financiers that they’re not worth what they’ve come accustomed to believing they’re worth:
Of course Wall Street’s compensation structures were doubly responsible for its flawed risk management. Firstly, they created excess risks: they encouraged investment bankers to put on what I call the Rubin Trade, where you make massive bets that something with a 95% probability of happening will indeed happen. And secondly, they contributed to the marginalization of the risk-management function in investment banks: since risk managers were paid so much less than star traders and top management, they tended to get overruled a lot, and in any case be discouraged from spending too much time looking at the really important big-picture views of systemic risk.