JPMorgan Chase CEO Jamie Dimon recently, and jokingly, pointed out a bit of hypocrisy on the part of the press: news media corporations set aside a higher percentage of their revenue for compensation than the banks that journalists like to trash. “Worse than that,” he said, “[your companies] don’t even make any money!”
Very funny, Mr. Dimon.
It is true, though, that we paupers in the media are usually as breathlessly envious of bankers’ salaries as we are repulsed. Perhaps as a way of resolving this tension, journalists have been doing some fantastic work covering the ongoing crisis in compensation at big banks, providing an excellent source of amusement and Schadenfreude for the public.
Bloomberg’s Max Abelson recently filed a wonderfully faux-sympathetic piece about financiers who have been reduced from spendthrifts to bargain-hunters like the rest of us. Perhaps my favorite source in the story is Daniel Arbeeny, a headhunter on the Street, whose income has declined steeply — as one might imagine it would amid hiring freezes and layoffs.
… Arbeeny said his “income has gone down tremendously.” On a recent Sunday, he drove to Fairway Market in the Red Hook section of Brooklyn to buy discounted salmon for $5.99 a pound.
They have a circular that they leave in front of the buildings in our neighborhood,” said Arbeeny, 49, who lives in nearby Cobble Hill…”We sit there, and I look through all of them to find out where it’s worth going.”…He reads other supermarket circulars to find good prices for his favorite cereal, Wheat Chex.
“Wow, did I waste a lot of money,” Arbeeny said.”
The piece is full of gems like that, including a hedge funder who spends nearly $50,000 a year — more than the median household income in the United States — between his labradoodle, his bichon frise, and membership to a “peer-based learning group for investors called Tiger 21.” It’s worth reading in its entirety.
Stealing candy from babies
It’s not cheap being rich, but it also isn’t good for your morality, at least according to another dryly hilarious Bloomberg story.
Paul Piff, a Ph.D. candidate at Berkeley recently conducted seven experiments, looking for patterns in ethics across social strata. Piff found that wealthier subjects were more likely to lie, cheat and steal — but only committing “minor infractions.”
One experiment invited 195 adults recruited using Craigslist to play a game in which a computer “rolled dice” for a chance to win a $50 gift certificate. The numbers each participant rolled were the same; anyone self-reporting a total higher than 12 was lying about their score. Those in wealthier groups were found to be more likely to fib, Piff said.
Piff also tested the wealthy’s willingness to yield to pedestrians at crosswalks and take candy set aside for children. Though Piff’s studies were designed in less-than-scientific fashion, they point to an uncomfortable suspicion many of us have: that there are many in the upper-class with little concern for the greater good, that Gordon Gekko’s credo lives on.
But the Gordon Gekkos need their Bud Foxes, and if coupon clipping and Brooklyn duplexes are all that the future holds for Wall Streeters — at least some of them — the life of a banker might lose its lustre.
A banker’s job is to help direct capital towards its highest and best use. It’s an important job — someone has to do it! — but it isn’t cool, or at least it shouldn’t be. Athletes are cool, rappers are cool, supermodels are cool. As backwards as it may sound, a responsible society would likely prevent banking from being cool in the same way. If having lots of money tends to make people want even more money — as Piff’s studies suggest — bankers could become irresponsible in performing their incredibly important duties — duties we don’t bestow upon athletes, rappers and supermodels. And isn’t that exactly what happened before 2008?
And this doesn’t just apply to bankers. The same could be said for journalists. Thomas Friedman lives in a mansion — think about that.