The Midday Burn - January 14, 2010

Bailouts!

I'm knee-deep in Andrew Ross Sorkin's Too Big To Fail, so the state of banking and free-market economics is in the front of my mind. I'll give the book a full review when I'm done, but I'd like to speak to a few observations I have seen as I reach the half-way point of the book.

1. A serious lack of diversity
Almost all of the CEOs and high-level decisions makers are white, ivy-league educated, Jewish or WASP men. They recruit talent from the same schools and social networks they are a part of. The call themselves the best and brightest, however, they operate in a bubble that caused them to drink their own Kool-Aid and damn near destroy our financial system. Come on... its 2010, time to let the people of color and women into the arena, just like we see in many other facets of life.

2. No Accountability
So far, Dick Fuld is the most fascinating character in the book, as his personality and detachment from the day to day of Lehman Brothers cause it to crumble. Its amazing to read how someone that is supposed to run a company and make it a long-term success can cause it to fail so miserably.

3. Socialism
I laugh when I read about pure market people talk about socialism like its the worst thing that has ever happened to the world. Its not racism; its socialism. So many Americans are quick to point out where their ancestors are from (Irish-American, etc) in Europe, which is a very socialist continent. Why don't they claim this part of their heritage?

To a larger point... People that really know me understand that I am a libertarian, and a devotee of Ayn Rand. I count Atlas Shrugged and The Fountainhead as two of the most influential books that I have ever read. I am a true free-market advocate, and believe in my ability to succeed due to the fact that we have so much freedom. That being said, I cannot stand the smugness of the finance underlings that push paper and bean count and think their jobs are sooo important. They're not; you're paid well, but you're still an employee, just like anyone else. No need to feel condescending for little people working in NPOs and for the public sector; you're job is not guaranteed, and at the end of the day, its all about where folks finish, not start. The job "correction" that's taken place in the financial market has been a subtle reminder that nobody is safe. (Okay, I'm over it.)