Wednesday, August 31, 2011

Too Funky for Me

That's hairdo capital, baby
Hey, you’re just too funky for me
I gotta get inside of you
And I’ll show you heaven if you let me
Hey you’re just too funky for me
I gotta get inside, (I gotta get inside)
I gotta get inside of you (so when will that be?)

I watch your fingers working overtime (overtime)
I’ve got to thinking that they should be mine.
I’d love to see you naked baby
I’d like to think that sometime maybe
Tonight, if that’s all right, yeah!

— George Michael, “Too Funky”

As a devoted husband and father of a certain age, Dearest and Most Indulgent of All Readers, I normally make it a practice to skirt the festering cesspool which is contemporary sexual mores and politics. For one, I am woefully underqualified to comment on what transpires under bedsheets and on top of refrigerators nowadays among young people, having sown most of my wild oats at a time when newlyweds consummated their union by negotiating a bedsheet with a hole strategically cut in it. (I am still trying to wrap my head around the bewildering notion that some women actually want and enjoy sex.) For another, Mrs. Dealmaker tends to regard my contemplation of non-uxorial pulchritude with a steely and unforgiving eye, and she has taken far too much training in back-alley knife-fighting from the Mossad for me to take her displeasure lightly.

Nevertheless, I have been inspired by a couple of recent reviews to pop my head up briefly from my hidey-hole to deliver a few considered comments on a recent book by academic Catherine Hakim entitled Honey Money: The Power of Erotic Capital. I should preface my remarks by noting that I have not read Ms Hakim's treatise myself—and do not expect She Who Must Be Obeyed will allow me to—so my thoughts are directed less at her work than her work as presented and interpreted by her reviewers. That being said, some of you might find them mildly interesting in spite of this shortcoming.

According to The Economist, Ms Hakim’s primary premise is the existence of erotic capital.

She argues that “erotic capital” is an underrated class of personal asset, to set beside economic capital (what you have), human capital (what you know) and social capital (who you know). Ms Hakim attempts to quantify a complex mix of physical and social assets, consisting of beauty, sex appeal, self-presentation, social skills, liveliness and sexual competence. Like other sorts of capital, the erotic kind is important for success; but unlike others it is largely independent of birth and class. It is especially valuable for poor people, young people, the newly arrived and the otherwise unqualified. In heterosexual settings it belongs primarily to women.

For what it’s worth, I can testify from my own personal experience and that of friends and relations that erotic capital is not wholly or even primarily determined by physical attractiveness. I know of incredibly beautiful people—men and women—who have the sex appeal of a moldy dishrag, and, contrariwise, physically plain individuals who make the objects of their sweltering attention anxious not to embarrass themselves by slipping in puddles of their own making.

Her secondary premise is that erotic capital is not equally distributed across both genders:

Ms Hakim suggests that women have more erotic capital than men to start with, mainly because they have had to work at it for centuries. But women have the erotic upper hand for another reason: the male “sexual deficit”. Despite the fact that both sexes are more sexually active than ever before, from the age of about 30 women’s libido tends to fall off while men’s does not. Because women have less interest in sex than men, it is, to put it crudely, a seller’s market. In the power dynamic of couples, controlling access to sex is more important than earning more money, says Ms Hakim. It is the woman’s main bargaining chip, as most still earn less than their partners. Feminists who want women to throw away their femininity are overlooking a powerful asset, Ms Hakim argues.

The existence of a “sexual deficit” is presumably an empirical question, although I do know enough about sexual politics, axe-grinding, and self-delusion to venture we will never answer it to everyone’s satisfaction in our—or any other generation’s—lifetime. (It is not inconsistent with my upbringing and personal experience, but, as I told you, I come from another era.) However, I have also been well-enough trained in Husband School to know it is the woman you’re next to whom you agree with, if you don’t want any trouble. Given that Ms Hakim is the only one in the room at present, I will concede her point. It is not critical to my argument.

* * *

No, what I find objectionable about Ms Hakim’s argument has less to do with whether women as a gender like to get their freak on as much as men and more to do with simple economics. For, let us be clear, that is what the honorable Professor is talking about. She claims that our Western patriarchal culture has consistently devalued women’s erotic capital for its own selfish purposes and, moreover, that the cure consists in freeing women to spend their erotic capital freely and at will according to their own, unconstricted desires. This means, in The Economist’s coinage,

the full legalisation of prostitution and surrogate pregnancies for profit, thus giving women the freedom to earn a return on whichever personal asset they choose.

On this, I am happy to say, I call bullshit.

For let us consider, Dear Friends, what we are talking about. If there is indeed a market in sexual favors—where sex is exchanged for economic support, emotional commitment, and the like—then it is by definition a two-way market. Assume, for a minute, that women are the “producers” in this market, and men are the “consumers.” (We all know what the product is.) Assume, as well, with Ms Hakim that there is an artificially restricted supply of this product. In aggregate, demand exceeds supply. To whose benefit does this market imbalance accrue? Cui bono?

Why, the producers, of course. Women. Duh.

To whose benefit would a removal of these restrictions accrue? The consumers. Men. A complete liberalization of the market for erotic capital—deregulation, in other words—would lower the scarcity, price, and value of sexual favors across the entire market. Men could presumably purchase or acquire by other means all the sexual satisfaction they desired at a going rate likely to be well below the standard price exacted today. At the margin (and perhaps well beyond that), marriage, committed fatherhood, and men’s financial and emotional support to their women and children would likely decline materially. Is that what women want? Really?

I will presume to speak for the fairer sex now: Of course not.

This is why the argument that sexual repression of women arises solely from patriarchy makes no sense to me. Will Self elaborates:

It is, quite simply, not in the interests of all those priapic patriarchs to allow women to actualise their erotic capital, for to do so would seismically alter the balance of power between the sexes.

That the religiously dogmatic and the merely male chauvinist should have both demonised – and, paradoxically, diminished – the impact of female sexuality from time out of mind, is, following Hakim, only to be expected. ... According to Hakim, Christian monogamy is, quite simply, a “political strategy” devised by the patriarchy in order to ensure that even the least attractive/wealthy/powerful men gain at least one sexual partner.

Huh? I thought we had determined that, other things being equal, the unfettered man wants lots of partners, or at least lots of sex. Why would a system which restricted supply and raised the price to every man be to men’s benefit? On the contrary, such a system would be entirely to the benefit of those women who could reasonably expect to trade on their erotic capital to secure social and economic benefits, especially in a patriarchal society where most positions of political and economic power are reserved for men. In such societies, erotic capital is women’s primary asset. Why would they not want to protect it, and its value, by restricting the ability of other women to flood the market with supply? Whence otherwise the legal restrictions and traditional social opprobrium attached to prostitution, promiscuity, and (literally, I kid you not: English is a remarkably transparent language) “cheap” women?

This argument gets at two crucial points which I think many feminists—and perhaps Ms Hakim—seem to gloss over or ignore completely. First, women’s “interests” are not monolithic. This is simple economic fact, if nothing else. If you are inside the system, and have taken advantage of the socially and legally regulated environment to sell your erotic capital at an otherwise higher-than-market price, you have no interest whatsoever in opening the market to poor, beautiful, desperate, sexually skilled and aggressive competitors from outside. Do you? This is particularly true because it is generally agreed that women’s erotic capital depreciates over time: if nothing else, the older you get the less you can rely on energy, youth, and dewy beauty to bolster your account.

The second point is that, consciously or not, I believe most women understand this extremely well. In fact, it has been my experience that women are the primary carriers of cultural and social values in this sphere. You don’t usually hear men or fathers making a big deal about loose women, adultery, prostitution, and the like; it is the wives and mothers. Why? Because it affects them directly. Patriarchal socioeconomic structures or not, it is usually women who set, monitor, and enforce basic social and sexual mores and expectations.

It’s in their own self interest.

* * *

Will all this change as society continues to evolve away from dated patriarchal structures? Probably. But I would be surprised if it changes to a complete liberalization of the market for sexual favors and erotic capital in the way Ms Hakim seems to recommend. If nothing else, such a utopia (for men?) would be wracked by Hobbesian economic competition among women for the resources they desire, whether those be sexual gratification, emotional commitment, marriage, or children. As producers of the same good—a commodity which generally gets harder to differentiate the more it is consumed and which can depreciate over time—women, like all economic agents, should prefer a protected market, where competition is limited. Life is easier inside a regulated, protected market.

Unless you’re on the outside. Or a consumer.

Love and marriage, love and marriage
Go together like a horse and carriage
This I tell you brother
You can’t have one without the other

Love and marriage, love and marriage
It’s an institute you can’t disparage
Ask the local gentry
And they will say it’s elementary

Try, try, try to separate them
It’s an illusion
Try, try, try, and you will only come
To this conclusion

Love and marriage, love and marriage
Go together like the horse and carriage
Dad was told by mother
You can’t have one, you can’t have none,
You can’t have one without the other!

No Sir!

— Sammy Cahn and Jimmy Van Heusen, “Love and Marriage”

© 2011 The Epicurean Dealmaker. All rights reserved.

Sunday, August 21, 2011

The Devil's Book of Aphorisms: Part 1

Why, yes, My Dear, Vanity is the source of all Beauty
The safest road to Hell is the gradual one—the gentle slope, soft underfoot, without sudden turnings, without milestones, without signposts.

All mortals tend to turn into the thing they are pretending to be.

— C.S. Lewis, The Screwtape Letters

From the archives...

Screwtape’s Hierarchy of Greeds:

Those who can, Create.

Those who cannot create, Execute.

Those who cannot execute, Finance.

Those who cannot finance, Do Deals.

Those who cannot do deals, Trade.

Those who cannot trade, Write about the rest.

Those who cannot write, Pay for all this activity.

* * *

Thank you for your support.

© 2011 The Epicurean Dealmaker. All rights reserved.

Saturday, August 20, 2011

How Did I Do?

So finally Roderick looks at me and says, “If you don't get this guy out of here in 30 seconds, I'm gonna slice his balls off.” As I walk out with Leon, Leon looks at me and says, “How did I do?”

So, squeaky-voiced were-bear Leon Black threw himself a little clambake out in Southampton last weekend in celebration of his 60th birthday. It seems that a sixtieth birthday blowout featuring aging rock stars of similarly creaky vintage has become de rigeur among the caviar and pointy-toed shoe set of baby boomer private equiteers. David Bonderman of TPG had one, Steve Schwarzman of Blackstone had one, and now Leon of Apollo gets his own. It's only fair.

And, notwithstanding the clashing of pitchforks and gnashing of proletarian (and bourgeois) teeth in the comments section to DealBook's newest chronicle of 21st Century plutocracy, the affair seems to have been a relatively tame example of its kind. Unless they happened offscreen, away from the privileged confines of approved journalistic access, we learn of no infants being roasted on a spit, underaged Eastern European “models” sporting multi-colored armbands, secret auditions of the latest Michael Bolton hit to select insiders, or similar ethical outrages. Based upon the known moral fiber of Mr. Black and the other baby-seal-blood-drinkers who came with him from Drexel Burnham Lambert to found Apollo, I for one find this positively restrained.

But the financial class has learned a lot about public relations since Steve Schwarzman made everyone crazy with his onanistic love fest in 2007. In fact, much is made in the DealBook article of Lloyd Blankfein's no-doubt carefully staged tête à tête with the tiny Lehman Brothers relic:

Before the concert, around 8 p.m., as a full moon rose over the Atlantic, Mr. Blankfein and Mr. Schwarzman stood at the foot of the stairs leading down to the beach. Guests overheard Mr. Blankfein playfully ribbing Mr. Schwarzman about his fin de siècle affair.

“Your 60th got us into the financial crisis,” Mr. Blankfein is said to have told the private equity titan
[sic]. “Let’s hope this party gets us out of it.”

Ha ha ha.

What's the economic multiplier effect of a seared foie gras station?

© 2011 The Epicurean Dealmaker. All rights reserved.

Sunday, August 14, 2011

Investment Banks of the Plain

It’s not as pretty in real life as in a museum.
Robert Rauschenberg, Monogram, 1955–1959

Passion aficionado and sesquibajillionaire Ken Griffin has finally “given up his dream”—according to a slightly breathless New York Times DealBook—to create an investment bank with the heft and prestige of Goldman Sachs. According to reports, he is shutting down the sell-side equity research division of his hedge fund, Citadel Securities, and putting his runty investment bankers out on his front lawn in a cardboard box marked “PUPPIES – 20¢ Eech, or Free 2 a Gud Home.”

Somewhere, Lloyd Blankfein is heaving a sigh of relief... — No, scratch that. He’s saying “Ken who? He was trying to build what?”

I mean seriously, people, the only sleep Lloyd Blankfein and the other CEOs of established Wall Street firms lost over Griffin’s quixotic quest these past three years has been prior to industry social functions—like the Robin Hood Foundation gala, where hedgies compare the size of their penises charitable contributions in public—where they’ve had to listen to him boast about how he was going to eat their lunches, before asking in a hushed aside whether they knew any good candidates to head his pissant investment bank. And the only reason they lost sleep, and didn’t spin on their heels and sprint away the minute they caught sight of him, was because the hedge fund side of his business was such a monstrous (potential) contributor to their sales and trading and prime brokerage revenues.

In contrast, Ken Griffin’s investment bank was a bad joke.

* * *
Now, an onlooker sympathetic to Griffin’s chief premise—that there was an opening in 2008 for another major investment bank, one which could compete with reputationally damaged, financially weakened giants like Goldman, Morgan Stanley, and Bank of America Merrill Lynch in the immediate aftermath of the financial meltdown 1—might claim that Ken’s fundamental error was one of execution, not conception. Certainly, he seems to have made a monumental hash of the most important task before him: hiring the right professionals to staff his folly. Over the course of its brief existence, Citadel Securities became an industry laughingstock for the frequency with which Griffin hired and fired the heads of his bank and senior business unit managers. You just can’t do that if you intend to build an investment banking franchise, for the simple reason that no-one below the level of Master of the Universe who doesn’t have fully portable compensation and a self-sustaining reputation will risk their career to work for such a shitshow. And any MoU worth his or her salt won’t sign up either, because whatever ruinously excess pay Griffin had to offer to lure them in wouldn’t be worth the brain damage of adapting to a constant merry-go-round in the executive suite.

Corporate finance and M&A are labor intensive in a way the typical capital markets salesman or trader has no idea: you need good people below you programming the models, writing and producing the pitchbooks, and handling the myriad details of an active deal process to run any sort of functioning business underwriting new issues and doing deals. You just don’t sashay into the office at 7:30 am every morning, plug your headset into the turret phone, fire up the MBS derivative valuation model, and try to make some money. We chase clients and opportunities for years before we see revenue dollar one, and much of the time we never earn anything. But like Woody Allen supposedly said about life, 80% of investment banking is just showing up: year-in, year-out, building presence, reliability, and credibility with clients so that when they eventually do have a deal to do, you have a decent chance of winning it.

Also, unlike much of capital markets, investment banking (corporate finance and M&A, natch) does not lend itself well to economies of scale. It takes approximately the same effort and labor to execute the sale of a $150 million company that it does to sell a $5 billion one. In fact, given the usual relative lack of sophistication and experience of smaller clients, it often takes more. It is a further truism that every deal is different: there are no clients in M&A or equity underwriting where a banker can take a prior deal summary down from the shelf, dust it off, and present it to the client to win the deal. Finally, the scale and financial heft of an investment bank matters less to most clients in selecting new issue underwriters and M&A advisors than does its reputation, credibility, and track record. This is one reason why deals on my side of the house are rarely won by the bank offering the lowest price, and why prices for IPO underwriting and M&A deals remain stuck stubbornly at the same levels they have been for 30 years.

* * *
Notwithstanding my undeniable joy in busting their balls, I admire talented traders and hedge fund managers immensely. They have a rare and distinct skill set and personality which is tailor-made for success in today’s global financial markets. But almost to a man, they are lousy at building real operating businesses. One of the key psychological traits of top traders—their ability to change their minds on the fly, experiment with risk where they see financial opportunity, and change business models as often as they change clothes—is fundamentally incompatible with building stable operating businesses where success and profitability rely upon consistent execution and sustained market presence. Hedge fund managers I know treat operating committee meetings like investment committee meetings: this strategy isn’t working, let’s shut it down; this market is on fire, let’s throw another 20 people at it and see if we can make money; here’s a talented banker in an industry we have never covered, let’s hire her and see whether she can build a business by herself before we give her any resources. You just can’t run a real business—including, believe it or not, an investment banking business—like that. It’s stupid to try.

I suspect Ken Griffin failed at building the next Goldman Sachs for a number of reasons. For one, he misunderstood the source of Goldman’s (and others’) success in investment banking. He thought it derived from their gigantic, market-moving presence in global financial markets. Instead, Goldman has maintained a market-leading spot in M&A and underwriting almost in spite of their position as one of the world's largest hedge funds. Goldman is strong in those areas because it has always been strong there, because it has been a premier advisory bank for almost its entire history. If anything, Goldman's strength as a white shoe advisory boutique enabled its evolution into a world-straddling financial behemoth, not the reverse.

Second, Griffin’s undeniable talents as a hedge fund manager and trader made him far too mercurial to be the strategic visionary behind a major investment bank. While I would not discount the corrosive effect of his famous temper on employee relations, I guarantee you the main reason so many senior investment bankers left so quickly from Citadel is that Ken kept changing his mind about strategy and tactics. Investment banking just isn’t that hard. You pick a strategy, you pick the right personnel to execute it, and you wait. Investment banking on my side of the house requires the virtues of an investor: careful thought, committed investment, and patience. I know few top-flight traders who possess anywhere near the required measure of the latter.2

* * *
In any event, the reverse of Ken Griffin’s strategy—building a world class hedge fund within a full-service investment bank—hasn’t worked out very well either. As soon as a trader gets enough experience and reputation to strike out on his own, he’s gone. Good hedge fund traders who can make money on their own don’t need or want the massive infrastructure, byzantine bureacracy, compliance strictures, and cap on upside compensation which a modern global investment bank demands for its very existence. Perhaps if Mr. Griffin had spent a little more time trying to understand the incompatibility of banks and hedge funds from this, very well-documented direction, he might have spared himself a few years and several hundred million dollars worth of trouble. But then again, I suppose he’ll just chalk it up to just one more bad trade in a lifetime of many: no harm, no foul.

Investment banking + hedge funds. Like most unnatural acts, it always sounds better in concept than it turns out in execution. And it always hurts way more than you expected.

1 I would not be one of them. Investment banking has never wanted for ass-chafing competition in any of the 20+ years I have practiced in it. I daydream fondly about the day it will.
2 Most of them would ask, “Why throw good money after bad?” I (and other investment bankers) would retort, “If the strategy is correct, you have to give it time to bear fruit.” You may guess that traders and investment bankers rarely agree.

© 2011 The Epicurean Dealmaker. All rights reserved.

Signed in Blood

A friend emailed to tell me he was out last night and heard someone yell “TED!” outside a bar, restaurant, and adult bookstore.1 He spun around and looked, then had a good laugh.

I told him he could pretty much count on it that whenever and wherever “TED!” is shouted outside a bar or adult bookstore,2 I’ll be there in spirit.

It’s in my contract.

1 He did not explain, but hopefully this was not all one establishment. Drinking at an adult bookstore I can understand; eating there would only give me indigestion.
2 Of course, if it is a strip club, you can be pretty certain I'll be there in the flesh, too.

© 2011 The Epicurean Dealmaker. All rights reserved.

Saturday, August 13, 2011

Tie Me to the Mast, Lads

Browsing the public twitter pages of old friends and acquaintances this morning has reminded me of whom I miss and why.

It has also reminded me why I am delighted to continue missing them.

Back to the hermit cave…

© 2011 The Epicurean Dealmaker. All rights reserved.

Top Ten Things I Have Heard in an Investment Bank Elevator

1) "Good morning."
2) "Good night."
3) "How's it going?"
4) "How's the family?"
5) "Going anywhere this summer/weekend/over the holidays?"
6) "Call me when you get a chance."
7) [indifferent silence]
8) [awkward silence]
9) [smiling silence]
10) [clicking of Blackberry keys]

Seriously, folks, the mere notion that you can hear anything remotely interesting for which you are not the explicitly intended audience in a public setting—much less a small enclosed space like an elevator—in an investment bank is just ludicrous.

First, there is the issue of confidentiality. Notwithstanding the unshakeable belief of the great unwashed and their axe-grinding bloviators, we "banksters" do not make a habit of trading insider trading tips, confidential client information, or techniques for running Ponzi schemes every time two or more of us congregate over coffee or fried baby seal. Believe it or not, virtually all of us take the civil, criminal, and contractual prohibitions against such behavior extremely seriously, and if we do not our internal compliance departments do. In addition to the letter of the law, most investment banks worthy of the name even prohibit bankers in the same department (like mergers & acquisitions) from sharing information about the very existence of clients or status of deals with colleagues who do not have a "need to know."

This prohibition gains even greater force when you talk about personnel on different sides of the various "Chinese Walls" within an investment bank, like corporate finance/M&A versus sales and trading or industry coverage bankers versus equity research. Separate areas like these which are not supposed to share information are usually physically isolated from each other, with separate elevator banks, mutually incompatible security access cards, and even telecommunications and e-mail blocks. For example, not only do many banks prohibit investment bankers and equity research analysts from talking on the phone or being in the same room with each other without legal or compliance chaperones present, some prevent direct communication altogether. At some firms, a banker can't even call or email a research analyst directly using the firm's own phone and email systems.

Second, this regulatory and business compulsion for secrecy spills over into the working culture of any investment bank. People who work for the same firm keep secrets from each other even when they do not have to because information is power and currency in my business. Information is used to negotiate with superiors, horse trade with peers, and undermine enemies. Any banker worth his or her salt would never squander any tidbit of information or gossip which could possibly be worth something in front of uninvolved bystanders. Gossip and character assassination are exchanged in private, sub rosa, where they can be put to the most effective and destructive use, not trotted out in front of summer interns in the Conde Nast elevator bank where it can accrue to the social or organizational status of the speaker.

This may explain in part why most investment bankers who operate outside the professional braggadocio environs of sales and trading come across as exciting as moldy toast. There may be a lot of really heart-pounding, pulse-racing secrets seething beneath the placid surface of that drab M&A banker holding forth in the corner of your cocktail party. Secrets he or she wouldn't dream of disclosing, even to his or her spouse or lover, because they're just too juicy to waste.

But then again, you never know when the big secret your friendly investment banker is really hiding is the fact that he or she is worried frantic because they have no gossip or deal information to keep secret. This is anathema to investment bankers, because a lack of secrets means a lack of currency, and a lack of currency means you've got a target on your back. So while absence of evidence is not evidence of absence, neither is it evidence of evidence. It may just be strategic silence.

Perhaps you would be wiser to consider us as dull as dishwater, after all. That's certainly how most of us come across anyway.

© 2011 The Epicurean Dealmaker. All rights reserved.

Sunday, August 7, 2011

School for Scandal

"Give up, just quit, because in this life, you can't win. Yeah, you can try, but in the end you're just gonna lose, big time, because the world is run by the Man. The Man... Oh, you don't know the Man? He's everywhere. In the White House... down the hall... Ms Mullins, she's the Man. And the Man ruined the ozone, he's burning down the Amazon, and he kidnapped Shamu and put her in a chlorine tank! And there used to be a way to stick it to the Man. It was called rock 'n roll, but guess what, oh no, the Man ruined that, too, with a little thing called MTV! So don't waste your time trying to make anything cool or pure or awesome 'cause the Man is just gonna call you a fat washed up loser and crush your soul. So do yourselves a favor and just GIVE UP!"

— The School of Rock

Dartmouth College senior Andrew Lohse kicked up a bit of a stink earlier this week, with a column in the school rag bemoaning the pervasiveness and corrupting influence of corporate and financial recruiting on his campus. I will not quibble with Mr. Lohse's characterization of my industry, although based on this aperçu—

what is essentially a vulgar and extortionate system of lending and predatory capitalism which is increasingly underwritten by what remains of the public’s coffers, as large banks and investment groups fail left and right

—his perception strikes me in equal parts as supercilious ("vulgar"? Really?), fact-free ("extortionate"), and dated. Really, I cannot be too harsh, because one should not expect a mere 21- or 22-year-old whose sheltered perception of the global finance industry has probably been limited to jeremiads in Rolling Stone and The New York Times to know what the hell he is talking about. Nevertheless, this incident only confirms my conviction that Intellectual Humility and Defense Against the Hubristic Arts remain firmly off the core curriculum at Hogwart's Ivy League Schools of Arrogance and Sophistry.

No, more to the point, I was brought up short reading his tirade when I encountered this:

We came to this school to probe big questions about why the world is the way it is — not to conform to a withering ideal of wealth and virtual power that we have been manufactured to hold dear.

There are a few paradoxes about Dartmouth culture that I have always found deeply troubling, chief among them the cognitive dissonance between the brilliance of my peers and their complete lack of intellectual curiosity. Most of them are ambivalent at best, and at worst antagonistic, to the very concept of posing the hard questions about power, equality and history that we should be examining as undergraduates of a liberal arts college. They seem aware that doing so will not help them land a prestigious 16-hour-a-day job at some faceless hedge fund, where they’ll learn about manipulating capital instead of imagining a freer and more just world. To think about inequalities would be a distraction from their manufactured task of perpetuating, rather than questioning, class-based systems of power and dominance. Is this what it means to be ambitious in our culture? Should this be the goal of the valedictorians of Ivy League institutions? No matter how hard I try, I cannot think of more pathetic ambitions.

There are so many things wrong with this statement, that I hesitate to even know where to begin.

* * *

I know. Let me propose my own mini-curriculum for the edification and clarification of Mr. Lohse and his fellow discontents in the rapidly waning days of their academic sinecures. You may call it a Minor in Disillusionment, or perhaps a Certificate in Learning How the World Really Works. Grading will be pass-fail, and these cross-disciplinary courses will show up on your résumé. (In the interest of not prejudicing future non-professional graduate school applications, however, you may elect to exclude them from your undergraduate transcript.)

  • History 324 / Sociology 339: The Role of Higher Education in Society – Mr. Lohse mentions twice how he and his peers have been "manufactured" to "perpetuate" and "hold dear" wealth- and "class-based systems of power and dominance." This course will evaluate the history of higher education in America, with a special emphasis on how this system has been designed at its core to justify, perpetuate, and staff the dominant existing power structures of a society which both supports it financially and fetishizes it as the pinnacle of socioeconomic achievement. If time permits, the class will review the peculiar features of secondary education systems and supporting social and economic structures which have been designed for no other purpose than to get students such as Mr. Lohse and his classmates accepted at elite institutions of higher learning such as Dartmouth, no matter the cost.
  • Psychology 201: Other Minds – Mr. Lohse expresses surprise and dismay that so many of his brilliant classmates display i) a lack of intellectual curiosity about and ii) a hostility toward the issues and ideals of socioeconomic justice which he holds dear. The class will discuss, in roundtable seminar form, how and why seemingly smart, articulate, and well-meaning individuals who come from similar or even identical socioeconomic backgrounds can reasonably and intelligently disagree on fundamental issues of fairness, efficiency, and equality in society, and demonstrate by example that it is a fool who thinks anyone who disagrees with him or her is a fool. Part two of the course will investigate the varied motivations of students for undertaking a rigorous undergraduate education at a prestigious university, using the example of the students enrolled in the course. Special attention will be paid to analyzing in an even-handed and non-judgmental manner the opinions of students who consciously view and value such an undertaking as advanced vocational training (q.v., History 324 / Sociology 339, above).
  • Political Science 278 / History 499 / Ethics 202: The Tyranny of Ideologues – The class will study the tyranny and authoritarian behavior of true believers when they attain a position of power, with particular focus on numerous examples from revolutionary periods in history, as well as the pedagogical program proposed by Mr. Lohse, who believes "the hard questions about power, equality and history" should be the principal focus of a university. For their required term paper, students are free to argue either for or against Mr. Lohse's implied premise that his program is superior—morally? intellectually? aesthetically?—to any of Anthropology, Comparative Literature, Biophysics, Applied Mathematics, Classical Philosophy, or Remedial Basketweaving. If time permits, the class will evaluate the utopian claim that "imagining a freer and more just world" constitutes a valid and self-supporting alternative to gainful employment.
  • Independent Study – Each student is encouraged to develop an individually tailored program, in conjunction with a faculty advisor and registered therapist, which is designed to counteract psychological, intellectual, and emotional shortcomings which will prove to be deleterious to his or her productive insertion into society post graduation. Popular programs of study include How Not to Be a Hubristic Ass, How to Respect the Opinions and Choices of Others, and How Not to Bite the Hand that Feeds You. In the case of Mr. Lohse, the faculty would like to draw special attention to a newly-offered course, No-one Wants to Hear My Poorly-Thought-Out, Half-Assed Opinions Over a Beer at the Student Union on Saturday Night. It has been recommended for him by a number of his classmates and peers.

* * *

I mean really, Andrew, I remember being appalled by the staggering disinterest most of my classmates displayed toward the issues and ideas nearest and dearest to my heart, too, when I first got to college. But eventually I got over it, in part because I developed enough maturity to accept the well-reasoned choices of others even if I disagreed with them, and in part because I developed enough empathy to understand that I didn't give a shit about what most of them cared about, either. Chacun à son goût, you know.

Look, if you don't like how powerful the evil forces of finance have become in our society—and you are not alone in this regard; I think my industry has become too big, too—I might suggest a fruitful line of inquiry for your admirable reformist energies would be to discover exactly how this situation came about. I don't think anyone has done full justice to the problem, and I agree with many that it is a problem worth understanding (and solving, if we can). Surely there is no oversupply of intelligent minds working on the problem to make it difficult for you to find a position.

And that's another thing. How can you, a product of one of the most competitive secondary and higher education systems on the planet, be unhappy that your competitors and presumed equals in brilliance are being siphoned off to dead-end, 16-hour-a-day jobs typing Powerpoint presentations and pushing electronic ledger entries around the globe? Doesn't it occur to you that that leaves the field of social and economic justice wide open to you and those few noble souls who choose to join you? It will be much easier for you to make a mark, a real contribution there, without hundreds of brilliant Darmouth and Princeton grads all jostling for a slice of social reformist glory.

Who knows, if you hit on something really revolutionary, you might even drive the real wages for do-gooding up. After all, you're probably gonna have a mortgage and childrens' college tuition to pay one day, too.

© 2011 The Epicurean Dealmaker. All rights reserved.

Tuesday, August 2, 2011

I Think I've Said This Before


Let me tell you, Dearest and Most Patient Readers, that notwithstanding my admirable innate modesty, unstudied intellectual humility, and staggeringly handsome physical appearance, it is beyond boring to be proved right time and time again as often as I have been. Even if I were a lesser man—prone to having my head turned by the adulation and adoration of the admiring masses, which I am most certainly not—I might begin to find the repeated ruminations of slower and lesser minds than my own on subjects which I have definitively and decisively disposed of now and forever somewhat enervating and—dare I say it?—even dispiriting.

Even today we find Andrew Ross Sorkin, of the Liberal East Coast Establishment's Business and Finance Digest of Record, DealBook, revisiting well-trod ground. He worries at length, and finds the fact that government regulators of the financial sector of our economy and their supposed regulatees not only share bodily fluids and intimacies not to be named in a family newspaper with each other on frequent occasion but also, mirabile dictu, share paychecks and other commonalities normally associated with working for each other's organizations on a regular, rotational, and, dare we say it, even predictable basis to be of a disturbing and even alarming nature.

And I say: No fucking shit.

But I also say: What about it? Where would you propose we find adequately qualified people to staff the regulatory bodies of our fair if somewhat befuddled commonwealth?

Where do you think we will find people who: a) know what the fuck they are talking about; b) know how the fuck to talk to/yell at/kick in the gonads the assholes they need to talk to/yell at/kick without worrying whether they can make the current lease payment on their late-model Subaru in suburban New Jersey if said regulatee makes a stink up the lobbyist/Capitol Hill staffer/Congress(wo)man food chain about said regulator's "disrespectful" behavior; and c) can tell Lloyd Blankfein or his current equivalent on Wall Street to take a flying fuck in a rolling donut if he doesn't like the tone, content, or approach of said regulator's interactions with his overpriced legal flunkies on items of regulatory interest and concern?

The Legal Aid Society of NYU Law School? The Public Defender's office? Puh-fucking-leeze.

In order to properly regulate the Masters of the Universe (aka Big Swinging Dicks) of the financial sector, you simply must have a stable of ill-mannered, hyperintelligent, nail-eating, blood-spitting, old-lady-tripping, extremely bad-tempered mutated sea bass ex-investment bankers and private sector lawyers who can go toe-to-toe with these self-protecting, self-"regulating", self-pleasuring assholes on their own terms. I'm sorry, but the well-meaning corporate lawyers and career civil servants who currently staff the SEC and like regulators simply are not up to the task of telling Jamie Dimon and his General Counsel to go fuck a goat in the information hall of Grand Central Station if he doesn't like the settlement terms/discussion/cup of coffee they are offering. Give me 25 ex-bankers like me, and 10 ex-flesh-eating Wall Street lawyers like Economics of Contempt, and I will not only have Jamie Dimon and Lloyd Blankfein eating like kittens out of my horny, calloused hands, but I will also have them delivering flowers to your Great Aunt Petunia in Astoria on a weekly fucking basis.

It'll cost you. And it'll rattle the cages of bureaucratic precedent and protocol, but is that really such a bad thing? Nowadays?

It's just not that hard.

* * *

Go read this, right fucking now. Write a goddamn book report, and deliver me a nice, crisp memo on the topic in the morning.

Do I have to do everything for you people?

Related reading:
Poachers Turned Gamekeepers (March 16, 2010)

© 2011 The Epicurean Dealmaker. All rights reserved.