One of our longtime readers recommended “The Death of Kings,” Nick Paumgarten’s “notes from a meltdown” in The New Yorker (subscription required, or $5 for this issue alone) a few weeks back. The article is mainly color rather than analysis; it’s a series of portraits of people on “Wall Street,” ranging from the merely rich to the astoundingly rich, and what they think of the crisis. Paumgarten paints a picture of people who know that we are all screwed but regard the phenomenon with a mix of intellectual superiority, self-righteousness, and resignation. The vignettes are certainly not representative; I’m sure most bankers and traders, though perhaps not working quite as hard as in 2005, are still scrambling to make the next killing. But they are still a window into a world most of us will never see.
There are two passages in the article I thought were particularly . . . “insightful” isn’t the quite word . . . maybe “poetic” is better. The first is a quotation from Colin Negrych, a successful money manager and the article’s Voice of Wisdom:
“What constituency is there for pessimism? People believe optimism is necessary, an American right. The presumption of optimism is the problem. That’s what creates the debt we have now.”
A few years ago I wrote an essay for a Vanity Fair contest about the American spirit (I think they were offering a lot of money, and it was just a few pages, so . . .), in which I discussed the societal compulsion to be optimistic. I guess you can see why I didn’t win. I’m not as dark as Negrych, who seems to think that a complete financial implosion is the natural order of things. But as a generally pessimistic person, I’ve always been confused by this idea that optimism is inherently good.
This is the second passage:
“It can be startling to discover how many offices in Manhattan have spectacular views. The first time you gain admission to an aerie in the G.M. Building or some other blue-chip tower and look out across Central Park, SoHo, New Jersey, or Queens, you think that this particular office must be the finest in town, the seat of secret power, the heart of the plot. But the city is full of them. It’s one of the things about tall buildings: you can see a lot, such as other office towers of different vintages, commenced in past booms. The takeoffs and landings at the airports, the shipping lanes, the humans below reduced to units: it is easy to begin to think abstractly about the armature of empire. Sitting up there and talking for hours about pools of securitized debt, and seeing them depicted on dryboards or PowerPoint slides as rectangular blocks, divided into tranches, you can find yourself viewing the buildings out the window as manifestations of that debt – the conversion of financial cunning into steel, brick, and glass. You also happen to be looking at the collateral.”
Why do I like this passage? When I worked in McKinsey’s San Francisco office, I shared an office on the 48th floor of the Bank of America building. I can’t remember my exact view, but from some offices you could see the sailboats on the Bay, and the hills of Marin, and the Golden Gate Bridge, and the fog rolling in in the evening. It made me feel like I was on top of the world; if I had an office with a view like that, I must have been important. The view alone doesn’t do the trick (McKinsey’s New York office was generally shabby and had no views to speak of), but it illustrates the seductiveness of the world of the self-appointed corporate elite. Towering above the common people, whether in San Franciso or in Midtown Manhattan, it’s not hard to think that they simply don’t understand the way the world works; we know that many people on Wall Street think that way about the politicians in Washington, for instance. (By contrast, Silicon Valley startups – some of them, at least – take pride in having the cheapest, most unremarkable offices possible, since every dollar saved is one dollar less you have to raise from investors.)
I think that temptation to arrogance is part of the reason why some people in the financial sector thought they could do no wrong, and that the markets could never turn against them. So blame it on the view.