The always entertaining Calvin Trillin steps out of the pages of The New Yorker to tell the grey lady’s masses how Wall Street went wrong. Recreating the bar-side chat in which the writer himself learned the secret, Trillin assumes we know a bit about Harvard, club ties, and straight-up martinis. That’s OK, right? Because I bet most of you who are reading do.
Anyhow, the really clever idea is that Wall Street for generations had been the reasonably well-paid refuge for the Ivy League’s underachievers — the ones who slept through geology but grew up in Greenwich and figured they, like their dads and granddads, would hit the trading floor and buy a sailboat.
But then Harvard’s smartest — and MIT’s and CalTech’s even — realized they could forgo being professors and lawyers and other relatively less lucrative professions in order to make billions on Wall Street. Seeking fortunes — or at least a way to pay off student loans — Trillin says these top-of-the-class types messed up the stuffy, functionally mediocre world of stocks and loans with their slide-rules and overachieving. Credit default swaps, derivatives, blind short-selling? That’s all apparently fancy stuff that could have only been invented by the new influx of smarties. And no one up top could stop it, because the bosses were all old-school, sub-geniuses who didn’t know what was going on.
“When the smart guys started this business of securitizing things that didn’t even exist in the first place, who was running the firms they worked for? Our guys! The lower third of the class! Guys who didn’t have the foggiest notion of what a credit default swap was. All our guys knew was that they were getting disgustingly rich, and they had gotten to like that. All of that easy money had eaten away at their sense of enoughness.”
Let that be a lesson to you, ye of good grades. Please stay where you belong: Away from the billions, safely ensconced in the various padded cells of privilege, where the most harm you (me? my friends?) can do is write a snotty blog post. And what damage could that do?
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