Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

April 27, 2009


Gabriel Sherman, NY Magazine - "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.

"I'm not giving to charity this year!" one hedge-fund analyst shouts into the phone, when I ask about Obama's planned tax increases. "When people ask me for money, I tell them, 'If you want me to give you money, send a letter to my senator asking for my taxes to be lowered.' I feel so much less generous right now. If I have to adopt twenty poor families, I want a thank-you note and an update on their lives. At least Sally Struthers gives you an update.". . .

A few weeks ago, I had drinks with a friend who used to work at Lehman Brothers. She had come to Wall Street in the mid-eighties, when the junk-bond boom spawned a new class of globe-trotting financiers. Over two decades, she had done stints at all the major banks-Chase, Goldman, Lehman-and had a thriving career directing giant streams of capital around the world and extracting a substantial percentage for herself. To her mind, extreme compensation is a fair trade for the compromises of such a career. "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."

Now, a lot of people in New York have BlackBerrys, and few of them expect to be paid $2 million to check their e-mail in the middle of the night. But embedded in her comment is the belief shared on Wall Street but which few have dared to articulate until now: Those who select careers in finance play an exceptional role in our society. They distribute capital to where it's most effective, and by some Ayn Randian logic, the virtue of efficient markets distributing capital to where it is most needed justifies extreme salaries-these are the wages of the meritocracy. They see themselves as the fighter pilots of capitalism.

Wall Street people are not moral idiots (most of them, anyway)-it's not as if they've never pondered the fairness of their enormous salaries. "One of my relatives is a doctor, we're both well-educated, hardworking people. And he certainly didn't make the amount of money I made," a former Bear Stearns senior managing director tells me. "I would be the first person to tell you his value to society, to humanity, is far greater than anything that went on in the Bear Stearns building."

That said, he continues, "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."

Of course, it is precisely the flawed risk management that has brought Wall Street salaries under scrutiny. No one has ever been hurt-not financially, anyway-by a Julia Roberts movie. But with their jobs in jeopardy and their 401(k)s in the toilet thanks to a market in which banks took risks with great upside and seemingly little downside, the Minions of the Universe are looking at the Masters with a newly skeptical eye. "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."



Anonymous Anonymous said...

The link at the bottom is broken.

April 28, 2009 11:07 AM  
Anonymous Anonymous said...

yes...the link at the bottom...the link of all links at the very foundation of our lives...the link between work done and wealth received - is broken.

yes...the link that is crucial, essential, vital, necessary, imperitive to peace and plenty and safety and survival, is nowhere to be found in modern man's mind.

the sane, just, rational link between wealth created by an individual's sacrifice of time and energy to working and the compensation said individual receives, is vital to survival of the human species.

but this biggest of all observations continues to be ignored by 6-plus billion people who would rather pretend any other issue matters while the biggest evil is perpetuated.

global insanity.

and everyone who reads this will remain confidently unalarmed - will just go click on the next and the next and the next distractions posted at their favorite websites by those like sam smith who are intent on merely forever being clerks who gather, catalogue, critique, and regurgitate the results of allowing the crucial survival link to remain unnoticed and broken.

humans would rather rip their societies and survival chances to shreds than turn to justice and fairpay and have a golden age and sustainability and survival.

global insanity.

(and the species that goes to bed every night with a billions to one inequality factor yawns in unison yet again...remains silent on this most glaring point of all points)

sorry for the interuption. you may now return to cleaning the oven while the house burns down with you in it.

April 29, 2009 8:36 AM  
Anonymous Anonymous said...

I hope they all fucking die. The more I hear from these Wall Street monsters the more I wish they would just die. FUCKING DIE YOU FUCKING LEECHES I HATE YOU.

April 29, 2009 9:17 AM  

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