Tuesday, March 15, 2011

Charlie Sheen and the Wall Street Bankers

In his article in New York Magazine entitled, “A Drug Called Charlie Sheen,” Mark Harris pointed out the obvious, that, “of course” Sheen has “money on his mind,” given Sheen’s many delusional statements such as “his spectacularly tone-deaf assertion that at nearly $2 million per episode he is ‘underpaid,’ [and also] his insistence that CBS apologize ‘while licking my feet.’”  That’s the deference expected from people who consider themselves so far above the rest of us--we should lick their godlike feet.
Now, almost all of us can agree with Mark Harris’ analysis that this is “all nuts (albeit a degree of nuts not even Hollywood has seen before).”  But is Sheen’s behavior--claiming to be underpaid while making millions of dollars a year and then also demanding apologies from those who criticize him--unique?  Is it really “nuts?”  Or have we been exposed to similar behavior elsewhere in our society in recent years?  
We may consider Hollywood actors an overly-pampered bunch, but Sheen’s greed and haughty defensiveness comes from an arrogance that really is not so prevalent among actors.  After all, it’s the rare Hollywood actor who hasn’t experienced the feast-and-famine nature of this profession.  Most Hollywood actors have learned modesty through bitter experience.
However, we do have a profession in which such modesty seems quite rare, and which of late has revealed a similar arrogant combination of greed and lofty defensiveness.  It is, in fact, a profession that we were brought up to consider among our most respected and staid--the profession of investment banking.
Let’s just consider one of the major players in this field, Goldman Sachs’ chief executive, Lloyd C. Blankfein.  In 2007, Blankfein was paid $68 million, even as his firm misled investors in a subprime mortgage product (that was devised to fail) and as Goldman Sachs contributed to the housing market collapse of that year. In December of 2009, Blankfein’s bonus alone, in the form of special stock, was valued at $9 million. Wall Street took this meager sum as a sign of restraint, even though it exceeded what any five well-paid and comfortable members of the middle class could ever hope of earning over a lifetime!     
But we all know that investment bankers earn scads of money and they expect their earnings to rise indefinitely.  As with Sheen, they have “money on their mind.”  But does Sheen’s lofty defensiveness accompany this greed in the case of our bankers?  Let us simply recall that, in November of 2009, Blankfein stated that, “I’m doing God’s work.”  Also, in a London Times Interview the same year, in answer to a question whether Goldman employees make too much money, he retorted, “Is it possible to have too much ambition? Is it possible to be too successful?”
Early this year, some of the world’s most powerful financial executives met in Davos, as reported by Paul Krugman in his commentary of January 31, 2011.  Their principal demand in this meeting was that governments must stop banker bashing.  As Krugman wrote, “Apparently bailing out bankers after they precipitated the worst slump since the Great Depression isn’t enough--politicians have to stop hurting their feelings, too.”  So, yes, the defensiveness is there as well.  We ought to know better than to criticize such deities!
Once they retire, however, some investment bankers have been able to descend from their Olympian heights and rejoin normality. For example, John Mack, chairman of Morgan Stanley, admitted in February of 2010 that Wall Street investment bankers are overpaid and that is not likely to change.  “I still don’t think the industry gets it,” he said.  As an example, he cited  a Morgan Stanley trader (under the age of 30) who, when offered $11 million in compensation, jumped to a hedge fund that paid him $25 million. [David Mildenberg, Feb. 24, 2010 Bloomberg News]
In another instance, John S. Reed, a founder of Citigroup, echoed Mack, saying of many Wall Street executives, “They just don’t get it.  They are off in a different world.”  [Louise Story and Eric Dash, Jan 9, 2010, New York Times, “Banks Prepare for Big Bonuses, and Public Wrath”]
So, there it is, Charlie Sheen and Wall Street investment bankers have something in common; the main difference is that Charlie Sheen’s greed and outrageously haughty behavior only hurts him. Those same traits among our investment bankers have hurt our country (and to some extent the world), bringing us to the brink of financial disaster. Naturally, given their Olympian stature, these perpetrators simply move on to bigger rewards while continuing to live in “a different world.”
Give me the public spectacle of a Charlie Sheen any day over the hidden machinations of unethical bankers whose profession, regretfully, we have been brought up to trust so implicitly.

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