You poor (bleeping) Wall Street typesAmericans make lousy aristocrats. Lacking a sense of hereditary entitlement,
By: Gene Lyons , The Dickinson Press
Americans make lousy aristocrats. Lacking a sense of hereditary entitlement, our homegrown elites scarcely acknowledge quaint concepts like duty and honor, much less shame. As if the entire presidency of George W. Bush weren’t proof enough, consider the feckless amorality of Wall Street’s so-called “Masters of the Universe.”
As the magnitude of their epic bungling became clear, those who created the worst financial crisis since the Great Depression responded by grabbing the loot with both hands, while assuring jobless millions that they remain indispensable to national prosperity.
Back in the heady days when investment bankers were bidding up the real estate/debt bubble and gambling the money away, they got used to multimillion-dollar “performance” bonuses. Now Wall Street expects huge “retention” bonuses. Heads, they win; tails, they also win.
So here’s the latest: In what The New York Times described as “an unusual move,” Goldman Sachs quietly bought up a big share of its own stock from two senior executives last fall even as possible insolvency loomed. Goldman, which received $12.9 billion in government funds from the cratered insurance giant AIG, paid chief operating officer Jon Winkelried $19.7 million and general counsel Gregory K. Palm $38.3 million.
Goldman’s alibi was that both gentlemen needed cash, and “directors were concerned that a large sale of Goldman shares ... would alarm investors during a period of market turmoil.” Were they politicians, such transactions might be deemed insider trading and could have led to an SEC investiga — um, whitewash.
To emphasize their need, The Times pointed out that, “in a much-noticed sign of the times, Mr. Winkelried ... put his estate in Nantucket on the market last fall for $55 million. He has since lowered the price. He also owns a home in Short Hills, N.J., and a horse farm in Colorado.”
With the price of quality horse-hay approaching $5 a bale these days, you can see the poor guy’s problem.
Oddly, this “Masters of the Universe” business started as a joke. The phrase originated in Tom Wolfe’s satirical novel “The Bonfire of the Vanities,” to describe a conniving Wall Street banker who metamorphosed from a Napoleon of finance to a jelly-legged coward after he and his mistress took a wrong turn and got marooned in the South Bronx slums.
Author Michael Lewis, who’s autobiographical “Liar’s Poker” mercilessly lampoons the self-described “big swinging d—ks” of 1980s Wall Street, says his book also had a different effect than he’d intended. Rather than stirring outrage, it provoked greed. Lewis found himself “knee-deep in letters from students at Ohio State who wanted to know if I had any other secrets to share. ... They’d read my book as a how-to manual.”
Besides breeding feckless aristocrats, Americans are famously impervious to satire. Thus, the most purblind, self-serving document to emerge from this entire mess, an open resignation letter also in The Times from an extravagantly embittered vice president at AIG asked, but not required, to return a $742,000 retention bonus.
Poor Jake DeSantis thinks he’s been “unfairly persecuted” to where “I can no longer justify spending 10, 12, 14 hours a day away from my family for the benefit of those who have let me down.”
Well, cry me a river.
It took Matt Taibbi’s scabrous wit to do DeSantis’s self-pitying screed justice. Writing at Alternet.com, Taibbi notes that: “DeSantis has a few major points. They include: 1) I had nothing to do with my boss Joe Cassano’s toxic credit default swaps portfolio...; 2) I didn’t even know anything about them; 3) I could have left AIG for a better job several times last year; 4) but I didn’t, staying out of a sense of duty to my poor, beleaguered firm, only to find out in the end that; 5) I would be betrayed by AIG senior management, who...folded in highly cowardly fashion in the face of an angry and stupid populist mob.
“I have a few responses to those points. They are 1) Bull(bleep); 2) bull(bleep); 3) bull(bleep), plus of course; 4) bull(bleep). Lastly, there is 5) Boo-(Bleeping)-Hoo. You dog.”
Meanwhile, former IMF economist Simon Johnson argues persuasively in Atlantic Monthly that the unmanageable growth of the financial sector itself — from approximately 16 percent of GDP in 1980 to 41 percent under George W. Bush — turned the United States into the world’s largest Banana Republic, afflicting the nation with a self-dealing oligarchy incapable of reforming itself.
Johnson thinks the crisis cannot pass until the government takes over insolvent banks as it did hundreds of Savings & Loans under the first President Bush, fires management, liquidates their assets, breaks them into smaller pieces, then re-sells what’s left to new private owners.
“Anything that is too big to fail,” he writes, “is too big to exist.”
In short, what’s needed aren’t more Ivy League whiz-kids, but honorable, old-fashioned bankers: dull, relatively unimaginative sorts unpersuaded of their own genius.
— Arkansas Democrat-Gazette columnist Lyons is a National Magazine Award winner.