Friday, January 30, 2009

Bernie's cabin fever

Pity Bernie Madoff.

Thousands of people have lost their savings because of this man and Madoff is feeling sorry for himself. According to the New York Post, Madoff is upset about being trapped in his palatial Upper East Side estate and cannot even go out to grab a bite. Madoff is free on $10 million bail, but he is under house arrest.

"I'm a prisoner in my own house!" Madoff fumed. "I can't go anywhere! I'm stuck here all day!"

First of all Bernie, do you really think it's safe to wander out on your own? Don't you think the days of taking a neighborhood stroll with Ruthie are probably over? You've pissed off so many people that there is probably a bounty for your head. Little old ladies from Palm Beach are waiting to jump you as soon as they see you walk out of your building. Eating out probably isn't safe either. I would also get someone to taste your food before eating if I were you -- just a thought.

Second of all, how can you get bored in a $7 million apartment? It reportedly has four bedrooms, five bathrooms and a library. (Sidenote, why does he have more bathrooms than bedrooms?) Maybe prison, the real Big House, will be a good change of environment for Bernie. There's so much to do that he'll never get bored! Look at how Martha Stewart turned out. Old Boss Lady spent time in the slammer microwaving apples and partaking in yoga classes.

And finally, it goes without saying that he's lucky to have a roof over his head. How many of his victims are now left wondering about their own security, home and future because of Madoff? Not to mention the charitable organizations who put their trust and money in Madoff's hands, only to see it vanish.

So sorry, Bernie. I don't feel sorry for you. I don't even understand why you're free on bail. I hope you lose your multiple homes, cars, yachts and other toys that you purchased by devious and illegal means. I hope you truly understand some of the pain that others are feeling right now in this country. But judging from the strange dolphin-like grin on your face and your comments so far, it seems rather unlikely.

Blago's Parting Comments

As he awaited the Illinois state senate's vote which would unanimously impeach him of his governorship and, bar him from ever holding public office in the state again,  Rod J. Blagojevich (affectionately referred to by some in Illinois as "Blowdryavich") uttered some incredible words:
"We should have been more selfish, not selfless,” he said. “It sounds probably perverse for me to say that based on what some people are saying about me. But it’s true. My family, we didn’t take advantage of all these things that people do. My successor has done a whole bunch as the lieutenant governor — taken all kinds of trips all over the world and trade missions — like he’s got anything to do with anything as lieutenant governor."
For the past two months, this man has been publicly raked over the coals for his unethical behavior and abuse of power as Governor of Illinois, and what does he have to say for himself?  That he should have taken more advantage of his influence and been even more corrupt than he was?

That is some shameful shit.    

Wednesday, January 28, 2009

A Time to Set Aside Childish Things

Ever since I heard Barack Obama's inauguration speech last Tuesday, I have been ruminating on his words — turning them over in my head and re-experiencing the amazement I felt watching him, our first African-American immigrant President, take over the reins of our beleaguered country.  

Among the many thoughts I've had about the speech, one was that I probably wouldn't talk about it here.  It didn't seem appropriate.  That speech is for discussion on blogs on rhetoric, blogs on foreign policy, blogs on social responsibility, history, politics, law.  Not so much for blogs o' snark and righteous indignation.  

Until now.

You see, tonight, at a friend's recommendation, I read this NYT piece about a group of women who have started a support group, Dating A Banker Anonymous.  Along with holding weekly social events, they've also created a blog, DABAgirls.com where they lament their vexed fates with their "FBFs" (Finance Guy Boyfriends) — guys who are losing their deals, their bonuses — and consequently, their abilities to wine and dine their beloveds at $200/plate restaurants.

DABAgirls.com is a veritable gold mine of Marie Antoinettes of the 20-something set.  While their posts are "infused with our own special brand of DABA Girl humor," the blatant and crass materialism seeping through the cheekiness is jaw-dropping:
This whole messy ordeal has advanced my Botox start date by at least two years. Like every other DABA girl, the economy was wreaking havoc on my relationship and youthful good looks. Phone calls went unanswered, Hamptons invitations un-extended, plans canceled (including, but not limited to, expensive opening night tickets to the ballet, which were scalped instead of being graciously offered to me and a galpal), and so forth and so on. Until – the horror of all horrors – my FBF lost his job, which I guess technically downgrades him to just my BF.

Overnight, he went from unavailable to downright clingy. He wants to have dinner every night. By dinner I mean staying in and cooking as Megu is no longer in the budget.
Since Love is defined in dollar amounts for these women, right now eligible (i.e., rich) men are disappearing before their eyes.  Stripped of their magical millions, all the wealthy princes are turning back into "clingy" math and chess club nerds and, well, what's a princess to do??

So, how does this relate back to Obama?  For the reams that could be written about the multitudes of Marie Antoinettes and the shocking lack of awareness and personal responsibility they express in DABAgirls.com, I think the most eloquent — and sensible — response comes from our new President, in his inaugural speech:
We remain a young nation, but in the words of Scripture, the time has come to set aside childish things . . . 

In reaffirming the greatness of our nation, we understand that greatness is never a given. It must be earned. Our journey has never been one of shortcuts or settling for less. It has not been the path for the fainthearted -- for those who prefer leisure over work, or seek only the pleasures of riches and fame. Rather, it has been the risk-takers, the doers, the makers of things -- some celebrated, but more often men and women obscure in their labor -- who have carried us up the long, rugged path toward prosperity and freedom.

Spousal Privilege

Consider Kathy Fuld, wife of Dick Fuld, former CEO of Lehman Brothers. She's not just a secret shopper, but is also an estate bargain hunter. Last November, right after Lehman imploded, she scooped up a $13.75 million oceanfront property on Florida's exclusive Jupiter Island for $100. Alas, Kathy was no real estate prodigy. She nominally "purchased" the home from her husband, in an effort to divest him of assets and help him outrun any legal reckoning coming his way.

And what to make of Ruth Madoff, fake author and wife of the vilified Bernie? She helped her husband with bookkeeping, and was also the keeper of the velvet rope to his fund. More personable than her aloof, wizardly husband, she both humanized him and helped maintain his mystique, which in turn helped him fleece billions.

I've always wondered about the women behind the disgraced, high-profile men, and not just the ones who are forced to stand like mute props next to their husbands at press conference confessionals for marital indiscretions. I'm talking about the ones who get behind a spouse who has committed offensive acts against the public-at-large, either by his own hand (serial killer) or fiat (politician, CEO goon), and whose actions resulted in a rippling outward of wave upon wave of victims. If they truly had no idea, some might argue that their loyalty is honorable and that they are even victims themselves. But what if they did have an inkling?

The scale of the transgression matters too, or should. It's one thing to say, "I love him even though I knew in my heart those office supplies he kept bringing home didn't really come from Staples." It's quite another to say, "I love him even though he started two foreign wars, knowingly caused the deaths of thousands of people, condoned torture and drove the world's economy into a ditch. He's my Bubba, and he meant well."

In the case of Ruth Madoff and Kathy Fuld, did they really just lend their moral support to their husbands, or were they somehow complicit in those greedy pursuits -- if not legally, then at least ethically? If you had a $5k-$10k per week Hermès habit, wouldn't it be in your interest to help perpetuate your husband's behavior, accustomed as you were to living high off the hog? When Kathy Fuld "bought" their Florida home, after Lehman fell, wasn't she essentially slipping behind the wheel of a getaway vehicle? And although Bernie swears Ruth knew nothing about his Ponzi scheme (how chivalrous!), investigators are not so sure. She kept his books for a spell, and it seems unlikely that he stole the equivalent of the GDP of Bulgaria, all by himself. Of course it's only speculation, and no one is saying she was involved, but the 20 million documents recently discovered in a warehouse in Queens may shed some light as to who did know.

Just Plane Stupid

What is with these corporate executives and their fancy jets? Haven't they ever heard of Jet Blue? Okay, fine, I don't expect them to really ride with the masses, but it's ludicrous that Citigroup had the audacity to take the government's -- make that our -- $45 billion to spend it on a souped up jet. This news comes months after those knuckleheads from the Big Three all flew to Washington, D.C. in separate private jets to beg for money. Perhaps MTV should consider a "Pimp My Jet" series.

Consider the specs, according to Maureen Dowd's column today:
As The Daily Beast and CNBC reported, big-ticket items included curtains for $28,000, a pair of chairs for $87,000, fabric for a “Roman Shade” for $11,000, Regency chairs for $24,000, six wall sconces for $2,700, a $13,000 chandelier in the private dining room and six dining chairs for $37,000, a “custom coffee table” for $16,000, an antique commode “on legs” for $35,000, and a $1,400 “parchment waste can.”
This $50 million toy, was fittingly made in France. If Marie Antoinette were around, she would no doubt occupy one of the 12 seats. There are so many better ways to spend that money. For instance, if you divide $50 million by the median income in the United States (roughly $43,000), you come up with the figure 1,162 -- which means Citigroup could've kept on that many people. Instead, they've laid off tens of thousands of their employees.

Although the company claims it has canceled its order for the plane, this episode certainly spotlights the stupidity and arrogance of their executives.

Ponziconomy? Economaggedon? Crecession?

What, exactly, should we call this current economic crisis?  The folks at NPR's Planet Money have created an hilarious poll asking just that.  Vote by this Friday, January 30 and they'll tally the results.  

My favorite: Economaggedon.  It just has a lovely ring to it.

Tuesday, January 27, 2009

Marie Antoinette Thain Apologizes - Sort of.

By offering to reimburse Bank of America the $1.2 million it cost to remodel his office, former Merrill Lynch CEO John Thain proves he is a bit more porous to the climate around him than some of the other Maries we've mentioned thus far on this blog.  

Although query whether much credit ought to be afforded Thain, who is now playing a finger- pointing game with Bank of America as to exactly who approved the disbursement of bonuses to the executives at Merrill Lynch, even after the company posted bigger losses than expected in the fourth quarter of 2008.  The NYT reports
. . . Mr. Thain appeared to challenge Bank of America’s suggestion that Merrill alone was responsible for the earlier-than-usual bonuses. He said the timing, composition and size of the bonuses were all “determined together with Bank of America.”
Bank of America has countered with its version of the bonus affair, telling The Financial Times: “We never said we didn’t talk with them about it. But, in the end, it was their decision and they informed us of it.”
This sniping is revelatory of Thain's still-persistent blindness to the fact that the decision to disburse bonuses to his executives (and himself?) was bone-headed and unethical, whether or not Bank of America was involved.  One can only conclude that entitlement and greed is obscuring Thain's vision.

This all brings to mind that compared to the $4 billion in bonuses disbursed, the $1.2 million Thain is reimbursing Bank of America for the office renovation is really no money at all.

Sunday, January 25, 2009

Frankie and Johnny

Frank Rich gets hip to the theme of this blog. On the culprits of the economic collapse:
This debt-ridden national binge of greed and irresponsibility washed over our culture not just through the Marie Antoinette antics of a Schwarzman and a Thain but in mass forms of conspicuous consumption and entertainment. Cable networks like Bravo, A&E, TLC and HGTV produced an avalanche of creepy programming catering to the decade’s housing bubble alone — an orgiastic genre that might be called Subprime Pornography. Some of the series — “Flip This House,” “Flip That House,” “Sell This House,” “My House Is Worth What?” — still play on even as more and more house owners are being flipped into destitute homelessness.
When Obama called it a "collective failure" to rein it in, he rather diplomatically attributed responsibility to everyone rather than call out the jovial idiot and the vulture-in-a-wheelchair by name. Yes, there were ten drivers in the pile-up, but you also have to single out the culpability of the dude in the lead car who knowingly hit the road in a car with no brakes.

Some acts of avariciousness are more egregious than others, and there seems to be an inverse proportion between the scale of greed and its consequences. While many consumers and opportunistic mom-and-pop real estate speculators are paying for their excesses with ruined credit and homelessness, Bernie Madoff sweats it out in a swank co-op paid for with someone else's sweat equity, while John Thain licks his wounds in a country estate that
spans three towns and sports five addresses. (His pied-a-terre is a two-bedroom $27.5 million Park Avenue duplex.) If it's business as usual, he will probably land his next CEO gig very soon. Although there are some who caution: beware the lynch mob.

(Also, what's up with John Thain's $1400 wastebasket? Trash cans, always the trash cans with these people!)

Friday, January 23, 2009

John Thain et al - Masters or Servants?

News of John Thain's absolutely audacious behavior just keeps coming in. This is from Businessweek's Matthew Goldstein:
When your company is staring at a $15 billion loss in the face, every dollar saved through cost-cutting and scrimping counts. That’s a big reason there’s so much outrage over the news that former Merrill Lynch CEO John Thain signed off on some $4 billion in bonuses for top executives on the eve of the brokerage’s merger with Bank of America earlier this month. (My italics.)
What?  Someone on Wall Street was signing off on bonuses just a couple of weeks ago?  And $4 billion dollars worth?  

For at least a couple of months now, the word 'bonus' has become the a new taboo, uttered only in disgusted (or regretful) whispers in the back alleys of Manhattan (and beyond), rivaling in notoriety some of the worst racial epithets.  Thousands in the country are suffering job losses, company closings, home foreclosures, etc. and John Thain has the gall to sign off on $4 billion dollars in bonuses to his top executives (likely including himself)?  

How much of that was out of taxpayer bailout dollars from the TARP?

Thain completely lost sight (as many Wall St. CEOs have done) of the fact that as CEO he was a steward of Merrill Lynch -- invested with authority by a collective of stockholders to be responsible and prudent in leading their company -- and not King of All He Surveys, free to do whatever he pleases.  

If there is any lesson to be learned from all this, it's that it's the CEOs who are supposed to be the Servants, and the stockholding public the Master, not the other way around.   

CEO John Thain, Redecorating Office and Skiing in Vail during Economic Crisis

Merrill Lynch CEO John Thain, an uber-Marie Antoinette, has finally gotten the ax from his new boss Kenneth D. Lewis, chief executive of Bank of America (who bought Merrill Lynch in the fall and is now experiencing a form of M&A food poisoning).  

This is good news, given how self-indulgent and out-of-touch Mr. Thain has revealed himself to be in the last couple of months.  Check this out from yesterday's New York Times:
Mr. Thain, who is 53, drew criticism from both outside and inside Merrill Lynch for suggesting in October that he be paid a large annual bonus, said by individuals briefed on the matter to be $30 million to $40 million. In December, the individuals said, the figure dwindled to $10 million and in the end, he received no bonus at all. He later denied having asked for one.

When Merrill Lynch alerted Bank of America in mid-December that its losses were ballooning, Mr. Lewis did not hear the news from Mr. Thain, who around that time left for a skiing trip at his second home in Vail, Colo.

Recent reports that Mr. Thain had spent $1.2 million to redecorate his office caused Mr. Lewis to further question Mr. Thain’s judgment, according to a person close to Mr. Lewis.
Correct me if I'm wrong, but even the thickest person should be able to deduce that:

a) it's a very bad idea to ask for ANY bonus, much less a seven-figure bonus as the rest of the country is calling for your head on a platter 
b) it's not appropriate to go skiing in Vail when your company's losses are ballooning, and you're the CEO
c) you don't redecorate your office for $1.2 million when you're entire industry is asking for billion-dollar handouts from Washington

Come to think of it, this tally causes one to wonder what in the world motivated Lewis to keep Thain on for this long.

Honor amongst thieves?

Thursday, January 22, 2009

He never Shruked — or, rather, Shirked his Duty?

Slate's political reporter Christopher Beam crashed George W. Bush's last DC goodbye party last Sunday before W. helicoptered into the sunset following Obama's inauguration.  

Beam has many fine observations of the dreary celebration George II's minions held for him on the threshold of his un-crowning.  This quote takes the cake:
"We never shruk—"
"Shirked!" someone yelled.
"Shirked," Bush corrected, smiling. "You might have shirked; I shrucked. I mean we took the deals head on."
"It has been an awesome eight years," he went on. "The days are long, but the years are short. … If you ever want a nice meal, come and knock on our door in Dallas, Texas." He waved goodbye over the opening chords of "Don't Stop Believin'."
As to whether W. and his team never "shruked" their duties — well, many, many thoughts to the contrary come to mind, but it is the unforgettable images of the legions stranded for days without food, water or proper medical aid  at the Lousiana Superdome and the New Orleans Civic Center after the onslaught of Hurricane Katrina that loom largest.

Never shirked your duties?  No, Mr. Ex-president, I'm sorry.  You shruked and ducked big time. (hat tip: Jason Linkins, Huffington Post)

Wednesday, January 21, 2009

Old + Strange = Goodbye to all that.


Whether Mr. Cheney be Marie-Antoinettish or not (although I bet he'll show up in another entry here ere long), I have to say, it's extra nice to wake up in the morning after Obama's inauguration and know that Dick Cheney's curmudgeonly, megalomaniacal self is at last gone from the office of VP.   

Sunday, January 18, 2009

Alberto Gonzales, "Casualty" of the War on Terror?

As we stand on the eve of president-elect Barack Obama's inauguration, there has been a lot of articles taking a look back at key members of the outgoing Bush Administration.  This brought to mind a recent Wall Street Journal interview with former United States Attorney General Alberto Gonzales, where he says this about the loss of his position some 16 months ago:
What is it that I did that is so fundamentally wrong, that deserves this kind of response to my service?. . . for some reason, I am portrayed as the one who is evil in formulating policies that people disagree with. I consider myself a casualty, one of the many casualties of the war on terror. 
I had to re-read the last sentence twice before I could close my gaping mouth.  Is it possible Mr. Gonzales doesn't know the meaning of the word "casualty"?  A quick check with The Cambridge Dictionary of American English delivers this entry for the word:
casualty /ˈkæʒuəlti/ noun [C]
a person hurt or killed in a war or other event, or something harmed or destroyed by an event
Assuming that Gonzales — a Harvard Law School alum — knows exactly what "casualty" means, I can only conclude that he equates the loss of his job and professional reputation with the loss of life suffered by thousands of American, Iraqi, and Afghani men and women — many of them innocent civilians — as a result of the United States' War on Terror.  

Whatever the verdict is on Gonzales' authorization of interrogation tactics such as waterboarding, or his efforts to reauthorize a secret government eavesdropping initiative, or his office's dismissal of nine U.S. Attorneys nation-wide who refused to use their positions to advance the power of the Republican party — the fact that Alberto Gonzales could equate the loss of his professional reputation, something which even he admits he had a hand in bringing about, with the losses suffered by those who lost their lives, loved ones, families, worlds — points to an audacity and tone-deafness that insults even Marie Antoinette's mythical insularity.

Wednesday, January 14, 2009

The NYT Style Section, Voice for the Uncommon People

The New York Times' Style Section is always a reliable source for modern-day Marie Antoinettes — case in point is today's article about the Berrys, a family in Darien, CT making significant, and apparently difficult adjustments after Scott, a tech analyst for a boutique Manhattan investment firm, lost his job a year ago.  

I sympathize with any family that goes through a layoff — it is a psychological blow at any pay grade — but I'm not sure I'm feeling the Berrys' material pain as they've had to downgrade from a full-time nanny to a more 'cost-effective' au-pair, and from weekend getaways to week-long family vacations, all while keeping their country-club membership. Here's the most fun quote (among many):
How to spend is a continuing negotiation — one that sometimes devolves into heated discussions, outright arguments and bouts of sulking. Tracey is trying, often unsuccessfully, to spend less on clothing for herself and the children. “Don’t make me look like a jerk,” she told a reporter, “but I cannot bring myself to buy my children’s clothes at Wal-Mart.”

“But do you have to buy them at Ralph Lauren?” Scott shot back.

The Berrys have been at this long enough to make light of the well-worn nature of their disagreement. “It goes like this,” Scott said. “ ‘How can you complain about me not earning an adequate income, when you can’t control your spending?’ ”

On cue, Tracey chimed in. “And I say, ‘How can you complain about my spending when you don’t have an adequate income?’ ”
What, I wonder, is Tracey Berry's definition of "adequate"?  According to this article it obviously must include, at the very least: au pair, country club membership, gym, Block Island condo vacations, multiple extracurricular lessons for the kids, BMW, Darien home, Ralph Lauren clothing and tuitions for two Harvard educations (never mind that tiny hurdle of the kids' getting in ten years from now - that's assumed, too).

While the Berrys (and the reporter) seem to have a bit of a sense of humor about themselves, the logic (or lack thereof) of their circular argument above points to how much this couple takes for granted all the extras they still enjoy in their 'stripped-down' state, luxuries which many in the world couldn't enjoy even when times were flush.

And, so, what, I wonder furthermore, is the larger point of highlighting their example (and many like them) of 'great' shift? I realize The New York Times has to play to its readership, and the 'Style' section is designed to do just that — but couldn't we lift, or even peek behind, the veil of materialism surrounding these stories just a little more?

Tuesday, January 13, 2009

Our First Marie Antoinette

GM CEO Bob Lutz gives us a prime example of tone-deaf, PR-challenged, Marie-Antoinette types we'll be collecting here.  This quote was sent to me by my friend The Eclecticist today:
I’ve never quite been in this situation before of getting a massive pay cut, no bonus, no longer allowed to stay in decent hotels, no corporate airplane. I have to stand in line at the Northwest counter. I’ve never quite experienced this before. I’ll let you know a year from now what it’s like.
I find it appropriate to kick off this blog with Mr. Lutz's priceless comment.