aTypical Joe: a gay New Yorker living in the rural South

Saturday, April 05, 2008

Rich Men Behaving Badly

I almost missed this... Daniel Gross, writing in Slate notes some striking resemblances between the underclass and the newly emergent super rich overclass:

In the underclass, unmarried, young fathers don’t take responsibility for their children. In the overclass, twice-married, middle-aged Wall Street daddies don’t own up to the consequences of their insane financial miscues. Wall Street titans are almost incapable of seeing the problem with taking nine-figure payouts in years in which their stocks plummet. “There’s just a total disconnect between the compensation and the responsibility for their actions,” says William Cohan, a former Lazard banker turned author.

In his book The Age of Abundance, libertarian author Brink Lindsey boils down the difference between the desperately poor and the blissfully rich to an ability to focus on the long term. “Members of the underclass operate within such narrow time horizons and circles of trust that their lives are plagued by chronic chaos and dysfunction,” he says. By contrast, elites are well-organized long-term thinkers. Riiiiight. “Modern Wall Street is a system,” says Charles Morris—a former Chase banker and author of The Trillion Dollar Meltdown-"that rewards crazy risk-taking in the short term without regard for the long-term consequences.”

Critics point to a pervasive sense of victimhood in the underclass. But listen to what Bear Stearns CEO Alan Schwartz told the troops after his firm succumbed to wounds that were almost entirely self-inflicted. “We here are a collective victim of violence,” he said. Yep, just another case of the Man keeping the Man down.

Conservative critics constantly carp that the culture of poverty has encouraged a sense of dependency on Washington. Of course, in recent months, the bureaucracy-the Federal Reserve, the Federal Housing Authority, Fannie Mae, and Freddie Mac-has generally ignored the struggles of poor homeowners. Yet it vaulted into action to save the bankers from their own disastrous bets. When Bear Stearns, the nation’s fifth-largest investment bank, approached insolvency, the Feds orchestrated JPMorgan’s acquisition of it.

Ah, but there are important differences:

The overclass is better connected, and it can cause more damage. “Poor inner-city kids selling drugs to suburban kids can harm people,” [dean of the University of Chicago’s Harris School of Public Policy Studies Susan] Mayer says. “But financial markets can bring thousands and thousands of people to ruin.”