[LINK] "The Wail of the 1%"

[rfmcdonald]

Gabriel Sherman's recent article in the magazine New York, "The Wail of the 1%", makes for interesting reading. Its subtitle, "As the privileged class loses its privileges, a collective moan rises from the canyons of Wall Street," gives the reader an idea why.

Shortly after 1:30 on the afternoon of March 18, two dozen traders in AIG’s financial-products division stepped away from their Bloomberg terminals and huddled around televisions to watch their boss, CEO Edward Liddy, testify before Congress. There was much at stake. These were the people who received the greater part of $165 million in “retention bonuses” that had suddenly become, to borrow a phrase, toxic.

As the hue and cry to return the money grew, the traders had thought that Liddy would stand up for them. The ruddy-faced, 63-year-old former Allstate CEO, who had been installed by Treasury Secretary Hank Paulson in September, was, if not exactly one of them, at least someone who understood the rules of the game as it had been played—and who understood what they were entitled to under those rules, even if those rules were unspoken. In AIG’s glory years, executives like Joseph Cassano, the former head of financial products, took home more than $300 million. That was the kind of money you couldn’t talk about.

But as Andrew Cuomo stoked public outrage by threatening to release the names of the bonus recipients, it became clear that the game was changing. When AIG employees had arrived at their desks that morning, they found a memo from Liddy asking them to return 50 percent of the money. The number infuriated many of the traders. Why 50 percent? It seemed to be picked out of a hat. The money had been promised, was the feeling. A sacred principle was at stake, along with, not incidentally, their millions.

Everyone on Wall Street is prepared to lose money. Bankers have expressions for disastrous losses: clusterfuck, Chernobyl, blowing up … But no one was prepared to lose money this way. This felt like getting mugged.

The people interviewed, frequently anonymous, tell of feeling hurt and betrayed by the backlash against Wall Street, arguing that individual lenders, higher-ups in financial institutions, and government policy-makers should at least share the blame. This seems more-or-less believable to me. And you?