O.M.G. This piece, The Rage of the Priveleged Class, in New York Magazine is a must read. It’s all about the trials and tribulations of the movers and shakers on Wall Street who are starting to feel the pinch both economically and socially. It is hard to find a piece of journalism that is this unbalanced by the subjects themselves. These people need a major attitude adjustment. Here are some choice excerpts:
In a witch hunt, the witches have feelings, too. As populist rage has erupted around the country, stoked by canny politicians, an opposite rage has built on Wall Street and other arenas where the wealthy hold sway. Its expression is more furtive and it’s often mixed with a kind of sublimated shame, but it can be every bit as vitriolic.
“AIG pissed some people off, and now you’re gonna screw everyone on Wall Street?” rails a laid-off JPMorgan vice-president. (Despite the honesty of the conversation, many did not wish to be quoted by name.)
…
“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.
RD here. I am familiar with the Wharton Whine. You will probably not be surprised that this claim of superiority has trickled down to the pharmaceutical industry as well. I met a Wharton graduate whose job is to change the labels according to FDA rulings. No doubt, this is very important and requires following instructions with great attention to detail. But as value goes, it hardly compares to the labrat who invents the drugs in the first place. Not according to her. The labrat doesn’t have an MBA from Whaaaaarton, therefore, they don’t get paid the big bucks. It’s the natural order. These people are nasty.
Let’s continue:
Their anger takes many forms: There is rage at Obama for pushing to raise taxes (“The government wants me to be a slave!” says one hedge-fund analyst); rage at the masses who don’t understand that Wall Street’s high salaries fund New York’s budget (“We’re fucked,” says a former Lehman equities analyst, referring to the city); rage at the people who don’t “get” that Wall Street enables much of the rest of the economy to function (“JPMorgan and all these guys should go on strike—see what happens to the country without Wall Street,” says another hedge-funder).
LOLOLOL! Yes, PLEASE, JP Morgan, go on strike. Do not pass go, Do not collect $2,000,000. Go directly on strike. It is always astonishing to me that these people can be so oblivious to the rest of us out here who have seen our measly 3% raises get eaten up by inflation and property taxes. And the reason our raises are so lousy and our employment prospects so miserable is because of entities like JP Morgan who worship the investment crowd to the detriment of the rest of us. Wages are low and the merger mania has lead to RIFs and outsourcing. But JP Morgan thinks we should be grateful that they have created a class of servants who will buff the cars and serve the antibiotic free lamb chops with organic baby vegetables.
“You can’t live in New York and have kids and send them to school on $75,000,” he continues. “And you have the Obama administration suggesting that. That was a very populist thing that Obama said. He’s being disingenuous. He knows that you can’t live in New York on $75,000.”
Au Contraire. There are lots of people who live in Manhattan on less than $75,000. And while their lives are kinda tough, there are worse places to be in terms of culture. The City has some of the best museums in the world, there are nice magnet schools and even the street entertainment is good. I love watching the people go by on a warm summer day in Central Park. Good culture is relatively inexpensive or free. You just have to be willing to mingle with the great unwashed masses from New Jersey. And speaking of NJ, it’s hard to live here on less than $75K or even $100K. I live a very modest lifestyle here even though my salary would make me well off in Kansas City. Sure, I’d LOVE to be able to send my kid to a private school but I don’t have the money. So, I improvise, just like the newly emancipated Wall Street folks will have to do.
The hidden nugget in this piece, and one of the most important reasons why we have to kill this out of control greedy mindset once and for all, is the account of the Goldman-Sachs vet who says that last fall, G-S employees were panicky and dismal over the value of their company. They thought they were done for and were going to go the way of Bear Stearns and Lehman Brothers. Then the government and AIG stepped up to the plate with cash infusions and now they’re partying again like nothing ever happened. This is what Adam Posen was referring to when he talked about Gambling on Resurrection with respect what happened to Japanese banks in the 90’s. As long as there is money around to be used to make risky investments, the bankers will use it. They may have lost everything but give them enough cash and they will put it all down on some high risk/high rate of return bet. And they will keep doing this until someone holds them accountable and takes their money away. In other words, the bankers, as bad off as they are right now, have not learned their lesson and won’t until the Obama adminstration summons up the courage to get tough with them. Until that happens, expect no recovery of any consequence.
Just go read the whole piece. It’s cathartic. They really are as bad as we thought they were. The comments are a hoot too. Some of the ones from insiders who finally “get it” are refreshingly frank. The moneyed class is finally going to get their rude awakening to find they’re not so valuable after all and it can’t come soon enough.
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Filed under: Economy | Tagged: bankers, MBA culture, New York Magazine, Wharton Whine | 83 Comments »
The Confluence 