Twenty years ago this spring, I had the second-best vacation of my life (best was Italy in ’97) in the kind of place where, if I had my druthers, I’d spend all my domestic vacations: a beach where there’s not much to do outdoors except lie in the sun, read and drink. And while on this vacation, among the things I read was Liar’s Poker, Michael Lewis’s combination of memoir and journalism about New York investment banking in the 1980s. I picked up the title because the PR agency I worked for in New York back in the day had had investment banks among its clients, and I was curious to learn a little more about the culture than I’d been able to at the time.
(Lewis, as it happens, has a new book out and was on “60 Minutes” Sunday night. I hope that segment is online.)
If there’s one thing you take away from Liar’s Poker, it is the massive, overwhelming sense of entitlement that pervades the industry. To hear Lewis tell it, these people, many of whom — like Lewis — fell into the industry almost by accident, really do believe that they are the Masters of the Universe (to use the phrase from Tom Wolfe’s novel about i-bankers, Bonfire of the Vanities). They really think that they make the economy possible and that they are, if anything, sadly underpaid.
If you wonder how America’s finance industry could have screwed the pooch so thoroughly for the past couple of decades, how it is even possible, then read Liar’s Poker. You will come face to face with people who not only have a grossly overinflated sense of their own competence but also an utter inability to recognize, let alone learn from, their mistakes.
And so it is that we learn that the Masters of the Universe at AIG think they deserve way more money than they’ve gotten for blowing up the economy:
During the national furor that erupted last year after American International Group paid more than $165 million in bonuses, the voices of those vilified for receiving the payments remained silent, at least in public.
But behind closed doors, employees at AIG’s Financial Products division — the very unit whose trading had hastened the insurance giant’s collapse — were defiant, saying they were merely getting what they were due, recoiling at public accusations that they were behind their capitalizing on the company’s massive taxpayer bailout.
“I will stand behind every action I have taken in this company from Day One,” one employee said, according to a newly obtained transcript of a conference call the division’s head held last March with some of his staff. …
But when another employee asked whether the staff would be getting a second round of bonuses promised for March 2010, his colleagues burst into laughter, apparently considering this a preposterous notion amid the public outrage.
Yet they did see that money, at least most of it. Last month, under a deal in which employees agreed to take a cut in their upcoming retention bonuses in return for an accelerated payment, AIG paid out about $100 million to employees at the firm. AIG is scheduled to pay the last of the bonuses this month.
Even so, neither time nor money has softened the employees’ feelings of wrongful persecution and their anger over becoming the subjects of scorn and ridicule. Seldom was that sense of victimhood more clear or more visceral than in the conference call of March 23, 2009. …
The employees said that the corporate leaders who had driven the firm into the ground were already gone from the company. Those who had remained behind to help clean up the mess and repay the taxpayer bailout were due their compensation, they told Pasciucco.
“You made a commitment to us, and we made a commitment to you. And for anybody to look beyond that, as the politics and the media are at the moment, is missing the point,” said an employee. “You can’t expect us to just roll over and ignore that commitment because there is a bunch of immoral bigots that intend us to do something different. It’s not going to happen.”
Another was even more irate, lashing out at the public for scapegoating AIG employees. “To be honest with you, I really hope it blows up. I think the U.S. taxpayer deserves to lose a trillion dollars over this thing for the way they have behaved.”
So let me get this straight. You turned a full third of my retirement savings and about 30% of my kids’ college money into vapor, and yet I’m an “immoral bigot” who “deserves to lose a trillion dollars”?
My response to this mindset isn’t printable on a PG-13 blog. Fortunately, Brad at Sadly, No! speaks for me:
My general reaction: Just quit, you [expletives]. Try taking around your résumés to other firms if you’re so convinced in your own inflated sense of self-worth. But this is just a guess — when you go in for an interview with another company, having five years’ experience of selling credit default swaps in AIG’s Financial Products division isn’t going to help you get a job. … I wouldn’t hire you to vacuum my rugs or take out my garbage.
I wouldn’t hire you to wipe my ass.