Major problem of the investor class these days is piles of cash and lack of investment opportunities. Major problem of middle class is lack of a stable paycheck, underwater mortgage and in many cases ruined lives. And yet it is the former who are quick to be offended and portray themselves as a persecuted minority, and it is the latter who quietly toil away paycheck to paycheck without seeking to make headlines.
For some reason it is the working stiffs who are required to view the world through the lens of hedge-fund billionaires, of self-made men, of entrepreneurs, but the opposite is not required of the billionaires. Every self-respecting billionaire has an “I lifted myself by the bootstraps from a scrappy childhood” story (even Mitt Romney has one, whose hardship included eating pasta and tuna fish as a student, the horror!). If adversity stories was something that money could buy there’s no doubt the narratives of hardship coming from the rich would make a poor man weep with empathy. But such stories, even if burnished to squeeze more sympathy from the audience, only matter, in the eyes of a self-made billionaire, when they are personal and in the past, not present day and coming from the wage-earners. Let others marvel at how hard you worked but don’t award them the same courtesy if they haven’t made it as far as you did. If somebody “didn’t make payroll” it’s almost grounds for derision in the world of Leon Coopermans. To understand and sympathize with financial titans is a poor man’s requirement, not the other way around.
The fact is our financial elite, that fancies itself to be trailblazers, rebels, brilliant innovators, have long ceased to resemble their favorite characters in their favorite movies. Somehow they lost their human qualities on the way to the top. They are now the bumptious judge in Caddyshack, the scheming Duke Brothers in Trading Places, the pretentious victims in Bonfire of the Vanities; not the scrappy ragtag team of clever misfits who take on the establishment. The financial elite demands respect, the admiration of the masses, the reverence from the government. Felix Salmon beautifully dissected the nature of their grievances – it’s part narcissism, part greed, part strategy. But somehow they look like they begin to believe their own narrative.
The revealing part of the mindset among the financial elite is a story of a letter sent by Leon Cooperman’s granddaughter to the President. Cooperman, who on many occasions compared Obama to Hitler, was upset that he didn’t get a response from the President. It’s ironic that Obama is expected to show magnanimity towards those publicly insulting him, while those who spew insults are notorious for lack of self-reflection and even a minor sense of gratitude. It was Obama administration after all that showered the financial industry with trillions of cheap credit, upheld AIG bonus contracts and did not prosecute a single person in the wake of the financial crisis. It was Obama who “stood between them and the pitchforks” in 2009, at risk of alienating his own base. He’d rather they just said thank you and went on their way. Taking offence is a crowded trade these days, but it is a sign of times.
The only people who are not offended today, or at least do not try to make headlines with their grievances – real not imagined – are those who work for a paycheck. They are too busy running on the treadmill, paying bills and keeping their heads just above water. They are too busy to write an angry editorial to Wall Street Journal and claim victimhood. But they have no shortage of advice. Edward Conard, Charles Murray know just what the working stiff needs to better his condition – self-discipline, religion and more hard work – as if it is laziness that afflicts the middle and lower-middle class.
I have no doubt that those who made it to the top, especially from a humble background, have worked very hard to get there. But what now? How does closing deals, buying companies, or making investments justify demands for public reverence? Why is it that that hunt for yield warrants more respect than the work that is done by miners in the mine or teachers in the classroom? Why is someone who does not aspire to own his own business is unworthy of sympathy? If everyone strived to be a businessman how would Leon Cooperman make his payroll?
From a strategic point of view the financial industry leaders have embarked on the losing trade. They may be frustrated, but bringing attention to their grievances will not resonate with the wider population and worse, will harm their case. They should instead lay low or play along, like in that scene in Star Wars where the rebels “arrest” Chewbacca and parade him around the enemy starship to get to the control room. Seriously, do financiers expect an unemployed worker in Ohio to feel their pain when their major headache is too much cash with nowhere to spend and being called names? Amazingly, the industry that praises itself as reality-based, Darwinian, strategic, mindful of opportunity and public mood is blind to the reality and the changing Zeitgeist around them. Wall Street, with few friends and strangely oblivious to its own toxicity, has the chutzpah to demand special treatment. It really is a losing proposition to complain about too much money on their balance sheets when half of the country is either unemployed or scraping by. For Wall Street and the hedge funds it’s time to cut the losing trade and move on.