The WSJ broke the story December 8 that Thain had requested a $10 million bonus, and furor ensued. (Credit must be given the Journal’s Susanne Craig, who is perhaps the best-sourced reporter on Wall Street.) Both the New York attorney general and the Senate majority leader condemned the (ultimately failed) request. As did pretty much everyone else.

Finally, something that really pierced Thain’s armor. But still, the focus here is on the man and not the institution. The bonus came to serve as a proxy for the real outrage: the crap that Merrill and all of Wall Street held and how it came to hold it. Outrage was the right response to the bonus request, but where was all of the skepticism earlier?

Furthermore, the press didn’t truly reverse course on Thain until he was safely out of B of A in mid January. Then all hell broke loose. We got attacks and attacks and more attacks.

Pieces like the WSJ’s “Mr. Fix-It Failed to Take Measure of Mess” observed, “Thain Proved Unable to Repair Merrill or get B of A Backing, and Underestimated Depth of Financial Crisis.” And suddenly those old complaints about Thain’s NYSE tenure come out of the woodwork. Now you tell us!

The FT, meanwhile, told us, “Mr. Fix-It Masterstroke Comes Unstuck.” And took aim even at Thain’s main claim to success, selling Merrill:

As for his masterstroke, the sale of Merrill to BofA, even that wasn’t his idea, according to several people involved in the matter. Mr Thain’s top lieutenant, Greg Fleming, urged him to approach BofA in the days leading up to Lehman’s September collapse. But according to several witnesses who were with Mr Thain at the New York Federal Reserve on the weekend of the deal, Mr Thain called Mr Lewis to initiate talks only after being urged to do so by his former Goldman boss, the then-US Treasury secretary Hank Paulson.

A feeding frenzy!

These stories really point to the biggest problem with creating narratives around individuals: The story doesn’t remain as flexible as it should be. The hero narrative divides the world into good and bad. And so angels like Thain become demons— like Thain.

And we don’t get the details unless they fit the narrative of the moment. For example, it took us by surprise when we found out late in the game that the level-headed engineering grad John Thain lived like the King of Siam, with a Westchester estate big enough to merit five addresses in three towns. That makes his controversial office-furniture purchase more understandable. People, please. If you are going to focus on the personal, at least give us all the gory details, and give them when they matter. We shouldn’t have to scour the tabloids for these.

As for Thain, he is now a full-fledged member of the Rogues Gallery.

Reuters informed us:

Once they were the brightest stars in the investment universe, but Goldman alumni—including Thain, former Treasury Secretary Hank Paulson and former Citigroup Chairman Robert Rubin—look much less brilliant now.

Barron’s also broods over the past, offering us “time-cured aphorisms about bear markets,” including:

‘In a bear market, no eminence of the financial world comes out the other side with his reputation untarnished.’ Alan Greenspan, Henry Paulson, Richard Fuld, even Warren Buffett have either seen their pedestals kicked from beneath them, or at least lowered.

We can now add John Thain—Goldman Sachs and NYSE alumnus, the onetime orneriest sheriff come to town at Merrill Lynch—to this list.

Now this raises a question. If this has become a pattern, why can’t the press see it coming? Or, at least, keep in mind from the beginning that it is a very real possibility? Why build up heroes knowing you will likely be bringing them down again? And in the aftermath give us knowing comments like:

With hindsight, it seems obvious that Mr. Thain, who got his MBA at Harvard Business School, wouldn’t last long.


And actually, this piece gets it wrong even in hindsight! The culture of B of A and the culture of Merrill just weren’t compatible, goes the logic here. But this clash-of-cultures model misses the point. In very important ways Merrill and B of A were the same. That is the story. Not personality or management-style differences.

One of our least favorite techniques for dealing with fallen heroes is revisionist history. Like when Reuters proclaimed that Thain

was regarded until 14 months ago as one of Wall Street’s steadiest hands.

Fourteen months? More like three or four, at most.

Elinore Longobardi is a Fellow and staff writer of The Audit, the business-press section of Columbia Journalism Review.