Hubris, High Socks, and other Habits of the Most Powerful People in the World
The Masters of the Universe can be identified by their socks. Their millions of dollars, their vast power over commerce, and their socks, which must protrude four inches below the cuff of their suit pants when seated. Any greater length of sock exposure would indicate that the wearer was sitting with his legs crossed. The Masters of the Universe sit with both feet on the floor. These are the alpha dogs.
Yesterday, in the bright and airy Times Center in Midtown Manhattan, a select few of the Masters of the Universe assembled to be lightly grilled at The Dealbook Conference. This was not the old and cranky capitalism of the Wall Street Journal, or the hungry and predatory capitalism of Bloomberg, but rather the enlightened, idea-based capitalism of The New York Times, in which the market-moving capabilities of capitalism's titans are an outgrowth of their status as Men of Ideas, rather than vice versa. I was curious mostly just to lay eyes on these men, whose influence is so pervasive that you must mentally journey through all the earth's nations and all of our economy's functions just to catalog its reach. You can read a newspaper to find out a Wall Street CEO's thoughts on the fiscal cliff, but it's not every day you can close enough to them to really inspect the cut of their suit.
Jamie Dimon, CEO of JPMorgan Chase, a global financial conglomerate whose various consumer and investment banking services shepherd money from the time it exits the government's printing presses and throughout its life of financing business projects and all the way into the slot of your local ATM machine, wears an attractively tailored navy suit, with the perfect amount of sock shown, legs uncrossed. His friendly interrogator, NYT whiz kid Andrew Ross Sorkin, did cross his legs, in typical journalistic interrogator fashion. Dimon, despite the staggering power of his position, plays the gruff, no-bullshit, native New Yorker persona to great effect, tinged with just enough gentleness to avoid a reputation for being surly. He looks like a rougher-around-the-edges Richard Gere. His hair has gone grey but remains full and lustrous, as is central casting's preference for CEOs.
"First, let me tell you what's important here," Dimon said in response to the first question, whatever it was. In forums such as these, the actual questions are fairly unimportant. No matter what they are, they serve as launching pads for talking points. Dimon prefers generalities to specifics. When you consider how many different pots his company has its finger in it's no wonder. Asked about the fiscal cliff negotiations, he said "We are one decision away from restoring our fiscal and our moral authority around the world." Just one! Who knew it would be so simple? Jamie Dimon was unafraid to go on the record with his support of the USA. "You know who's got the best opportunity in the world?" He stopped to rap his knuckles on the table. "Right here."
Lloyd Blankfein, CEO of Goldman Sachs, a job title that, like "President of the United States" or "Dalai Lama," has transcended its origins in reality and passed into the realm of "shorthand expressions for holders of great power," wears a suit that is notably baggy in its cut. The bagginess is unflattering. But it is a pinstripe suit, which is the Bat Signal of men of great influence, Wall Street's version of a rapper's Jacob the Jeweler medallion. The pinstripes and the business card reading "CEO of Goldman Sachs" are, I imagine, enough to get the point across. Though the suit was baggy, its pants were still cut to the proper length, so that when Blankfein sat, he did expose the requisite four inches of sock, but the cuffs of his pants stuck out to a comical length perpendicular to his shins, owing to the pants' great roominess. Like Dimon, Blankfein is a native New Yorker, but he plays the nebbishy pencil pusher to Dimon's Wall Street tough guy. (He does, however, sit with his feet flat on the floor.)
A Wall Street CEO is not a stock analyst, or a macroeconomist, or a policy wonk. He has people for that. A Wall Street CEO primarily serves as the human embodiment of the firm—the competent, reassuring face that the many-tentacled monster projects to the world. As Nassim Nicholas Taleb once said, "A C.E.O.'s incentive is not to learn, because he's not paid on real value. He's paid on cosmetic value." This is not to say that these wildly successful men are dumb; it is simply to say that their job is not about muddling in the details, or tinkering with the gears of the machine. The CEO's job, in public, is to frame the perception of what his company does, to cast the company's activities in the proper terms, so that it sits in the public's mind in an acceptable way. This often takes the form of an endless stream of metaphors. "We were wrongfooted," Blankfein said, explaining a Goldman Sachs weakness. "We didn't have a lot of muscles."
Other times, CEOs know that it is best to remain as vague and as bland as possible, there being little upside for them to get involved in dirty debates over policy. "We're different. But the world's different to allow us to be different," said Blankfein in response to one question, which could have been about almost anything, if you think about it. Dimon did this too, but he often let his passions get the better of him, causing him to make defensive statements (one reason he is so very popular with journalists). The topic of Wall Street's army of lobbyists got him particularly exercised. "It's in the First Amendment!" he sputtered. There are thousands of lobbying organizations in DC, and financial institutions only represent a few dozen, and the insinuation that corporations control DC is, therefore, ridiculous. Why, it's not just banks that have big buildings down on K Street, "they all have big buildings... even the fly fishermen."
Someone should look into the power of the fly fishing lobby, which is apparently comparable to that of JPMorgan Chase.
Wall Street CEOs were not the only species of power broker at the Dealbook conference. There was the Silicon Valley version of Masters of the Universe, embodied by Marc Andreesen, who made billions selling Netscape to AOL and is now one of tech's most high profile venture capitalists. (This subtype is generally given to wearing more creative socks.) I will observe that Silicon Valley—like any social niche, but more so—suffers from an abundance of people who are legitimate experts on a single topic (tech) and understand very well the socioeconomic dynamics of a single place (Silicon Valley), and are therefore presumed to be oracles about the world at large, when in fact their expertise ends abruptly and the edge of the tech world. These are fabulously successful and wealthy nerds who are treated as Great Philosophers, when in fact they are merely Very Good Tech Entrepreneurs. They tend to assume that the dynamics that operate in Silicon Valley are the dynamics that operate in the world at large, and that the problems that plague Silicon Valley are the most important problems of the world at large. (Wall Street, too, would like to put its needs ahead of all others, but does not delude itself into thinking this is anything more than a raw, self-serving power move.)
This manifested itself in the following way yesterday: the Silicon Valley-related people who appeared on stage (Andreesen, Google CEO Executive Chairman Eric Schmidt, Twitter CEO Dick Costolo, and other businesspersons and financiers) all uniformly emphasized the need for improvements to America's A) education system, and B) immigration system. Which is great, because both of those systems are in need of reform. But the Silicon Valley idea of reform for these two systems is that school systems should be awash in charter schools and standardized measurement, and that very smart foreign-born students who come to the US to get higher degrees should all be awarded green cards, so that they can stay here to work. In other words, their solutions to these huge systemic problems extend as far as the needs of Silicon Valley. Silicon Valley needs more skilled workers; therefore we must retool our schools and open our borders to achieve this goal. These tech titans emphasized that they have tens of thousands of jobs which are begging to be filled. That's great and all, but there are hundreds of millions of people affected by these issues, and, to be blunt, Silicon Valley could not really give much of a shit about the ones who do not have the potential to end up working for a tech company. This dynamic is not due to malice so much as to the fact that these fabulously wealthy and successful people have little need to look beyond their own little (open-minded! Entrepreneurial! World-changing!) world.
This is why, therefore, a man like Marc Andreesen would declare that "there doesn't seem to be a role" for unions in the modern economy because people are "marketing themselves and their skills," as if the majority of Americans worked as video game designers rather than as Wal-Mart stock clerks. And it is why a man like Eric Schmidt would sneer at the fact that "it turns out in government you can't have any losers and you can't penalize people"—because it fails to register with him that cutthroat winner-take-all systems may be great for software trials, but not for a government, where taking care of society's losers is one of the most important jobs of all.
Wall Street is the paradise of the rich, and Silicon Valley is the paradise of a certain strain of smart people. But these paradises exist only by casting out those who don't have what it takes to belong to them. Meanwhile, society as a whole needs to concern itself with all of us: the poor, the dumb, and otherwise. Wall Street and Silicon Valley are very good at being successful in their chosen worlds. To put them in charge of the world at large would be a grave mistake.
[Image by Jim Cooke]