Saturday, May 15, 2010

Semi-Charmed Kind of Life

I believe in the sand beneath my toes
The beach gives a feeling, an earthy feeling
I believe in the faith that grows
And the four right chords can make me cry
When I'm with you I feel like I could die
And that would be all right
All right

— Third Eye Blind, "Semi-Charmed Life"

In the course of my professional peregrinations, O Dearly Beloved, I travel a lot. A lot.

Trust me.

Do not mistake me: this is not a complaint. I like to travel, even though I am many decades past the point when traveling cross country or across an ocean excites the childlike wonder and excitement I still see in my junior colleagues. I do not begrudge them their excitement. For one thing, it softens the blow of carrying my bags. And paying for the taxi from the airport to the hotel or meeting.

Yes, I am a bastard. Deal with it.

* * *

Anyway, there is nothing like hurtling in an aluminum tube at 35,000 feet over the fly-over states at 650 miles per hour to make an introspective soul contemplate his or her mortality. After all, even though air travel is statistically the safest method of travel available to Earthlings at this point in history—compared, for example, to crossing the street under foot power in Midtown Manhattan during rush hour—when things go bad six miles above the surface of the Earth, most leading scientific authorities agree that you are, basically, fucked. Plane crashes are rare, but, sadly, so is survivability. You may have a very low probability of being in a plane crash during your lifetime, but if you are, you have a very high probability of getting distinctly and irrevocably dead. It could ruin your entire day.

Similar thoughts of mortality passed through my brain on a recent trans-con flight. These were triggered less by the background fatalism limned above than by the awareness that my brother-in-law was going under the knife while I was in the air, and I had no guarantee that he would not be dead by the time I landed. At first blush, this was a distressing thought, as I truly like and admire my brother-in-law (one of many), and I was concerned not only for him but for his wife and two daughters.

But then I remembered that he was a good man, who had built a good, honest life, with a wife who loved him (and whom he loved) and two delightful daughters who have turned out to be crackerjack specimens of humanity. I would not wish an end to his life under any circumstance, but, if he were to die, what better legacy could he leave? What better life could he have lived?


And that is the answer, Boys and Girls.

* * *

On the ground or in the air, we are all hurtling at high speed toward our own deaths. When they will come, and in what form, we cannot know. Neither can many of us be sure what, if anything, might lie on the other side of that dark divide.

But we do know, and can control, what we do on this side.

Being a relatively smart guy, with a couple of talents more developed than the average bear, I had always hoped and dreamed as a youngster that I could leave a legacy to humanity. That I could do something, or contribute something, so that my life would have mattered. As I have gotten older and wiser, I've realized I probably don't have the firepower, or the intellect, or the drive to really "make a difference" in the world. That the legacy I leave behind, such as it is, is probably going to be limited to the relationships, and the example, I leave behind with my family, my friends, and the other fellow travelers I cross paths with on this small blue planet. And I am okay with that.

I am thankful that I have a wife and children who love me, against all good judgment and public opinion. I am glad I have two dogs who consider me to be a demigod, against all available evidence to the contrary. I am glad to have useful employ, in a profession which many despise but which I still find a daily challenge and delight. I could leave all of them tomorrow, if I had to, with the knowledge that they reflect a credit on me and my life which I probably don't deserve.

But let me tell you something else. I am goddamn glad that we humans have invented scotch, and cigars, and rock and roll music1 to ease the passage. Give me some of each, and I will dance right up to that fucking Reaper and shake his awful hand.

And he will look at me worriedly and exclaim, "Wait. You're an investment banker?"

Note: My brother-in-law yet lives. Thankfully, he is very hard to kill. I aspire to such resilience.
1 I have very eclectic taste in music. It's all over the map, from obscure stuff that very few people have ever heard of to mainstream Top 40 shit everyone has heard of. Music snobs would say I have no discrimination. I say most music snobs have no soul. Fuck 'em all, root and branch.

© 2010 The Epicurean Dealmaker. All rights reserved.

Sunday, May 2, 2010

Editorial Note

No good deed goes unpunished.

— Anonymous

My recent exercise in flag-waving seems to have generated some confusion in a few quarters. If I interpret his telegraphic tweets aright1—always a risky business, under the best of circumstances—reader "CorneliusZH" seems to have interpreted my post as an attack on the banking industry qua industry, and that I implied that all its denizens, from lowest recent recruit to highest panjandrum, should be tarred with the brush of anticompetitive, plutocratic misbehavior.

This was not my intent at all.2 Let me be clear: as CorneliusZH wrote, many of the people who work in the investment banking industry are indeed Horatio Alger stories themselves. (For what it is worth, so am I.) Careful readers will recall that I alluded to the current CEO of Goldman Sachs, Lloyd Blankfein, as an admirable exemplar of that very thing.3 I have known very few, if any, colleagues or competitors over the years who have achieved success at (or even entry into) investment banking based on nepotism or anything other, really, than a rare combination of high native intelligence, relentless hard work, and grand ambition. There have been a few people I know who got a start based upon who Daddy was, but they quickly got winnowed out if they couldn't deliver the goods like their peers. (Most of those were hired with the implicit understanding that Daddy would hand out fee business to the investment bank which hired Junior, anyway. Unless they proved themselves otherwise, such quid pro quos were always viewed as temporary investments in human capital only.)4

There was also nothing in my post which should lead a cautious reader to assume I advocate the dissolution of investment banks, the imposition of punitive taxes on finance industry compensation, or the passage of badly written, excessively repressive legislation on the industry itself. Number one, that just isn't in my piece. And number two, have you read anything I've written in these pages over the past few years? Shit, man, carve out a couple days, pour yourself a few beers, and read it. You will quickly find such impressions to be badly mistaken.

I did respond to Mr. ZH by Twitter, but I thought I would share my remarks, in slightly edited form, with you here. I think the thoughts they express are important to convey to a broader audience.

Look, if people want to misinterpret my work, that is their privilege. I cannot control how my words are read. Anyone who cares to can spend a few weeks reading my back catalogue and discover that I am neither a mindless bank booster nor a mindless bank basher. Having spent 20 years of my life in the business, I appreciate it in ways most cannot. It's funny, but the bulk of reactions I have generated over time paint me as an apologist and defender of the banks for that very reason.

Let me be clear: I think both extreme perspectives are wrong, and either lazy or disingenuous. There are not enough hours in the day nor enough money in my bank account for me to try to right the idiocy of the world by myself. Therefore, I write what I write, and biased and lazy readers be damned. If anyone agrees with 100% of what I have said, 99 times out of 100 that means they have not read it carefully. I defy easy characterization, on purpose.

And to respond directly, it pisses the hell out of me that a bunch of lazy, greedy fucks have taken over my industry and crapped all over what was always an imperfect but all-in-all pretty good—and, sometimes, even noble—thing. And they don't even seem to realize it. I am critiquing my industry from the inside, and my primary intended audience is my fellow brethren. I just wish to hell the goddamned bastards would listen. It is their stupidity, not the often mindless rage it has generated, which has screwed up my livelihood and likely will lead to bad regulation, over-legislation, and decades of stagnation.

I pity the stupid and ill-informed. In contrast, I am mad as hell at the assholes in my business who should have known better.

And, for the avoidance of doubt—as my British colleagues like to say—let it be understood that the assholes I am talking about run these businesses from positions of senior executive authority.

* * *

I am a dyed-in-the-wool capitalist and investment banker. Unlike many of my fellow citizens at the moment, I continue to believe both of these are good things, and better than the alternatives. Nevertheless, I acknowledge, apparently unlike many of my blinkered brethren, that there is a good way to run capitalism and investment banks and a bad way. I think the senior muckety-mucks in my industry have done the latter, and I would prefer that they—or someone else with half a brain and a smidgen of humility or even empathy—would realize that, and try to correct the error of their ways before the vastly more numerous fellow citizens outside the industry decide there is nothing worth preserving and burn us all to the ground.5

There. Is that fucking clear enough for you?

1 And if, as he now seems to suggest, I may have misunderstood him, I apologize. But let this be a lesson to you, kiddies: never try to conduct a nuanced conversation about a complicated matter in 140-character bursts. The medium just won't support the message. To be honest, I still can't figure out what CorneliusZH was objecting to in my original post.
2 Frankly, I thought it was a happy, cheerful, optimistic piece. (At least for me.) Just goes to show how you can't control how others interpret your words.
3 It should not require saying so, but I will: my admiration for Lloyd's pulling himself up to the highest levels of global finance by his own bootstraps does not extend to the damage he has done his firm and the alleged injuries he may or may not have visited upon his clients. Capisce?
4 One of the admittedly lesser evils which will result from the calcification of the finance industry into giant, unassailable behemoths untouchable by regulators, markets, or clients—known elsewhere as crony capitalism, which blights vast swathes of the developed and undeveloped world—is that this will change. Not only will Daddy's idiot son get hired at Goldman Sachs, he will end up running the joint.
5 And, given that these muckety-mucks have driven my livelihood into the ditch of public opprobrium, I would appreciate a little humility and openness on the part of all people in the industry vis-à-vis coming to a consensus on proposed solutions. The fact that it was us who cratered our own industry—never mind with how much and whose help—leads me to suggest that it is at the very least impolitic and at the most expressive of an unjustified hubris of the first rank to deny that anyone outside the industry might have any good ideas on how to fix it or even the political, social, and moral standing to propose them. Seriously, if we don't, why should anyone listen to what we have to say about the subject ever again?

© 2010 The Epicurean Dealmaker. All rights reserved.

Saturday, May 1, 2010

American Baby

If these walls came crumblin' down
Fell so hard, to make us lose our faith
From what's left you'd figure it out
Still make lemonade taste like a sunny day

Stay, beautiful baby
I hope you
Stay, American baby
American baby

Nobody's laughing now
God's grace lost and the Devil is proud
But I've been walking for a thousand miles
One last time, I could see you smile

— Dave Matthews Band, "American Baby"

Let me just say at the beginning of this that I am no mindless patriot.

As a native-born citizen of the United States, I am deeply suspicious of the doctrine of American exceptionalism,1 if only because I am deeply suspicious of exceptionalist theories—not to mention doctrines—of any kind. I am a fox, not a hedgehog, and 40+ years of observation of my species has disabused me of the notion that our behavior fits neatly into any coherent, circumscribed box. World- and system-builders need not apply within.

That being said, I concede that large aggregations of people, organized into semi-permanent sociopolitical entities persisting through time, do tend to develop distinctive and identifiable sets of behaviors and attitudes. Some people call this culture. And, notwithstanding the staggering breadth and variety of semi-permanent subcultures collected under the all-encompassing banner of the United States of America,2 I think one can indeed identify a distinctly American culture.

Like most cultures, I think the American culture can best be described by a set of stories, or myths, we tell each other and ourselves. One of the most important and enduring of these is that the United States is the Land of Opportunity. Cynics both inside and outside the US and outsiders from cultures older, wiser, and/or more tired than ours may scoff, but I believe that deep down almost every American truly believes anyone can become President (or a doctor, or CEO of Goldman Sachs).3 This is an incredibly powerful belief. There is nothing magical, or special, about the political economy of the United States: nothing is materially different in the socioeconomic constraints and arrangements that characterize our country from myriad others now and in the past. Inequality and class divisions are real, persistent, and serious barriers to true socioeconomic mobility. But the mere fact that so many of us believe social mobility is possible, and indeed valuable, means that as a people we devote more time and energy into bettering our condition in life.

As a point of contrast, I have worked off and on for many years with both clients and coworkers in the UK and Western Europe. Almost to a man (and woman), these are intelligent, hard-working, and sensible individuals. Successful, too. But, like many of my compatriots who have worked with these people, I have often had to stifle a smile when my European colleague prefaces an otherwise cogent analysis about how to address a problem or opportunity with the remark

"The problem is ..."

Do not laugh. Such verbal tics are extremely revealing of a speaker's world view: what they believe is possible, and the probability of success thereof. Americans do not say such things. We are a "can do" people, and we stick to that, whether whatever we are talking about can be done or not. We are natural optimists. Most Europeans I know, for example, are not. That is culture.

* * *

Americans are famous for admiring success. Americans do not begrudge successful people their success, no matter how they earned it: through hard work, natural intelligence, luck, or a combination thereof. We admire Horatio Alger stories of scrappy youngsters who clambered their way out of the urban backwater of Queens, New York (for example) up to the pinnacle of the most successful, admired, and feared investment bank on the planet. We admire, at least in an abstract way, the youthful community organizer from a broken home who clawed his way into the most powerful political office in the world, even if we can't stand his politics. We admire talent, and brains, and hard work rewarded, because we instinctively know they are not enough. Good luck matters, too.

And, as long as we can believe that we have a chance, too—that luck has a chance to find us and reward our own faith and effort—Americans will pull contentedly at the grindstone while simultaneously ooh-ing and ah-ing over the social and financial success of our betters. But central to this implicit social contract is the idea of fairness: that the deck is not stacked against the little guy, and that he or she has just as much chance of becoming the next Warren Buffett, or Lloyd Blankfein, or Barack Obama as the next guy. It is not a belief in fairness of outcome, but rather one of fairness of opportunity. There is nothing that raises the cultural hackles of most Americans more than learning that the game is rigged, and that the guys at the top are gaming the system in their own favor.

Now, cynics (and Europeans) might laugh at such naïvete. Of course, they say, the game is rigged; of course the guys at the top skim more than their share of the cream and leave the dregs for the hoi polloi. What's new about that? But Americans understand that too, at least instinctually. That's why we have such a long history of suspicion and hostility against Big Business, and Big Government, and Big Anything. That's why, among other things, the Tea Party movement has gained such broad-based traction in this country: it is the natural outpouring of frustration and suspicion grounded in the most basic American myths and beliefs about ourselves. We may acknowledge that is the way the human cookie crumbles in any society with unequal distribution of wealth and privilege, but we do not accept it, at a very fundamental level, as the way things should be.

* * *

That is one big reason why the ongoing scandals rocking the financial sector are creating such outrage and upset among the American polity. Citizens are discovering that a very large percentage of people whom they used to admire and envy for mouth-watering financial success earned a large portion of that success by cheating, by gaming the system, and by rigging the rules in their favor. What seems to outrage many Americans even more is that these very financiers do not seem to recognize that they have violated the implicit social norms almost everybody else seems to accept. They hide behind a defense of arrogance, superciliousness, and moral obliviousness which makes most Americans' teeth grind in frustration.

This is a dangerous situation for the plutocracy. For, when you get right down to it, most Americans are not really interested in supporting a system that is designed to preserve the wealth and privileges of those who have already made it to the top. Instead, they want one that will give as many people as possible a reasonably fair shot at reaching the top themselves. That is a distinction which seems to elude many of the wealthy and powerful. They misperceive the struggle as one of capitalism versus socialism, when what it really is is a struggle for the heart and soul of capitalism in this country. On one side is a new aristocracy of money, entrenched interests, and cronyism, and on the other is an ethos of equal opportunity for all.

It will be a long, difficult fight. Given the money and resources arrayed on the other side of the ledger, it is by no means certain the country will come out of this struggle with a cleaner, fairer system. The Augean Stables look like an afternoon's Spring cleaning by comparison.

But I am optimistic we will arrive at the right solution. Heck, you knew that already: I am an American.4

1 As always, apologies to the multitudes of people who live in the Americas, North and South, who do not reside anywhere inside the capacious boundaries of the United States. If you have not already noticed, we inhabitants of the USA have an ingrained difficulty distinguishing our country from the entire hemisphere in normal conversation, if not in our own minds as well. In our—admittedly weak—defense, it is awfully awkward to say "USA-ers" or "United States-ans" all the time. (I make no apologies for Dave Matthews, who is a musician and therefore perfectly capable of defending himself.)
2 It is my firm belief that someone from outside the USA who wishes to understand our culture could do no better than rent a car and spend a week or so driving across the country. The diversity of regions, people, and geography one would encounter on such a journey would truly stagger an observant pilgrim. Such an exercise, in my opinion, would also have a highly salutary effect on most Americans, who tend to be distressingly parochial and pathetically ignorant about their own country.
3 Or, perhaps what is more powerful, most of us believe anyone should be able to become President, even if we doubt it is possible. In the context of human history, this is a surprising and extraordinary belief.
4 History is littered with the smoldering wreckage of nations and peoples who mistook Americans' native optimism for childish naïvete, softness, or lack of resolve in the face of difficult struggles. It is unwise to underestimate us.

© 2010 The Epicurean Dealmaker. All rights reserved.