My friend James North headed off to Bolivia today for the book he’s writing on the effects on the Third World of the globalized economy, but offered me the following thoughts on the cultural ramifications of the financial crisis:
Read John Gapper in the Financial Times yesterday: employment in the securities industry in New York doubled between the crash in ’87 and today. Many of those jobs will be gone. What’s unsaid here is that an entire group of arrogant investment bankers is being brought down, and it’s happening in slow motion and it’s going to change the face of New York. An entire industry will be transformed, and it’s a very healthy correction.
You misquoted me before about a levelling in society. It’s a levelling in New York. It might level 800,000 investment bankers into 200,000 lawyers. This swollen group of arrogant people–the air is going to be let out of the balloon. These guys all said this couldn’t happen. People challenged them at various times, and they said it’s all good.
Read Robert Mcelvaine’s book The Great Depression. People were arrogant in the 1920s, and then the crash happened and a lot of people suffered. A quarter of the people were out of work, and while I would never want that to happen again, it made us into a better country. Greed diminished, social concerns grew. The greatest generation wasn’t that way because of World War II–very few of them served as a percentage–but because they had been through a common experience of adversity and come out of it better. You had people camped in Central Park.
Of course we don’t want that again.
I vacillate; I don’t blame the 21-year-olds for following the herd as much as the 51 year old’s. This is a bipartisan issue, for 25 years. One of the people responsible for this is the kindly Robert Rubin. The financial rewards of the last 25 years were concentrated in fewer and fewer hands. Though there was a little levelling in the second Clinton term.
For the 37 year old in New York who sees his world collapsing, I have sympathy for him on a personal level. But I’ve seen high school teachers’ income stagnate, and in Third World countries I see middle class people selling things on the street. People in New York are scared now. And me and everyone else is going to be kissing more ass than usual on the job. There are a lot of nervous people in the restaurant industry. They really depended on FIRE as they call it, finance and real estate.
Weiss again: I have one comment, and that is that Bill Deresiewicz also spoke of the cultural warping that the era of investment banking produced in this fabulous piece in American Scholar:
no wonder that the few students who are passionate about ideas find
themselves feeling isolated and confused. I was talking with one of
them last year about his interest in the German Romantic idea of bildung,
the upbuilding of the soul. But, he said—he was a senior at the
time—it’s hard to build your soul when everyone around you is trying to