“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.”
Here’s an update: your head isn’t on a spike.
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.”
Oh how did Wall Street ever survive under those punishing tax rates of the 80s and 90s?
There is another line the banker spouses I know would rather not cross. And that’s the one to buy a subway pass. “No matter how bad things get, my husband and I would never take the subway,” one wife told me. “We would rather limit our social life to walking distance from our apartment than rely on going underground.” When I bumped into an oft-photographed socialite on public transportation, she seemed beyond horrified to be “caught” by the tracks. “Oh, hi,” she said sheepishly. “I’ve never been down here! This train goes so fast,” she marveled.
How could you not take the subway! The subway is just so darn AWESOME!
I’ll have more sympathy if any of those 1%ers make less than 20x the income of their lowest paid worker. But no:
“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.
Because that driver didn’t destroy the world economy out of his own greed and incompetence, you clueless fuck of a hack.
For being educated so much better than Middle America at Columbia and Wharton, they really should have paid better attention to history (you know, those worthless humanities courses). Then they’d perhaps be grateful that society was not resorting to the more traditional means of levelling vast and destructive disparities in incomes.
"On the last Friday in March, President Obama summoned leaders of the banking industry to the White House, where they gathered around a mahogany table in the State Dining Room, site of many a feast. On this day there was not a piece of fruit nor can of soda in sight. At each place was a glass of water. No ice. No refills.
The president’s message was hard and crusty as a slab of day-old bread.
He urged the bankers to view corporate excess through the eyes of Americans who are belt-tightening their way through the recession. Obama mentioned the carpet stains in the Oval Office, to make a frugal comparison with $1-million suites decorated with $8,000 trash cans.
The corporate chieftains protested, citing the specialization of their field and the need to pay handsomely to avoid a brain drain. Obama cut them off: “Be careful how you make those statements, gentlemen. The public isn’t buying that. My administration is the only thing between you and the pitchforks.”
I don’t know if that last is really true, but the entitlement people are certainly not making a great case in this last year. Why should they get all of these bonuses and big salaries if they don’t deliver? I think it’s really that simple…deliver->get paid. Don’t deliver->don’t get paid. Just like everyone else who makes a middle class income.
Unfortunately this isn’t true. These guys have successfully deflated the class war using the make believe fantasy that is called The American Dream (apt name – I often dream of threesomes with supermodels and they have yet to come true) so poor Americans will rise and rail against tax increases, that only touches a class of people they will never become, and against “socialized” medicine that will benefit them much more than their current broken and expensive system.
The Economist referenced an interesting study on deregulation & finance pay in US - basically, when finance was a regulated, utility business, (1930’s-1980 or so) pay was average. When was deregulated (1900-1930, 1980 to date) pay was way above average. It isn’t clear that efficient capital allocation (the role of finance in society IMHO) was less efficient in the regulated era, rather than the unregulated eras. One could argue that the dot-com & housing booms (in deregulated times) were spectacularly inefficient allocations of capital…
Not just that, but I suspect that much of the public thinks that a “brain drain” in the finance industry wouldn’t even be a bad thing. The executives’ argument is that without ridiculous levels of compensation, it would be impossible for companies to attract the best and brightest. But when the “best and brightest” can’t manage to run a company any better than the cheap and average likely could, then guess what? Nobody cares.
I thought that quote about the lady who was attached to her blackberry and taking calls at 2 am was interesting. I think she really believes that it makes her somehow special or more worthy that her job requires that of her, that she really deserves a ludicrous amount of compensation because of how hard she works.
I think she would honestly be very surprised at how many of us in “Middle America” working regular jobs still have to make work calls at all hours of the night.
One could make the argument that it’s your own damn fault for seling yourself that short.
(I fall somewhere in between; if I’m working a job where I’m on call 24/7 there fucking well better be extra compensation for the fact that I can never escape work. I’ve got to be doing a pretty damn important job, though, for that extra compensation to be a static 10x increase on a reasonable 8-5 base salary, and I’m not sure that being an investment banker is 10x harder than what an average high quality white collar worker does in a 45 hour week.)