Sympathy for the devil

The Old Mick

A number of readers have commented on today’s Bloomberg article detailing the woes of the once-rich, now-poor Wall Street types. For another view, read this article by one of my favorites, Meagan MCardle. She’s no richer than the rest of us poor slobs but can empathize. And I’m with her. Before you jump all over this post, please read her article to see what she’s saying. You might even agree, at least in part.

I could understand the laughter if the people in the article had been moaning about how terrible and unjust it is to be forced to suffer along on $350,000 a year.  But in fact, none of the affluent people he speaks to hold out their experience as somehow equivalent to that of a famine-stricken child in Somalia–“they aren’t asking for sympathy”, says one source; “I wouldn’t want to whine”, says another.  The closest we get to a “poor little me” is M. Todd Henderson: “Yes, terminal diseases are worse than getting the flu,” he said. “But you suffer when you get the flu.”
The fact is that no matter how much you make, seeing your income fall below the expenses you’ve committed to is difficult.  Obviously, people whose expenses are closer to the minimum deserve more of our sympathy, and our help.  But I’m not sure that this means we’re supposed to be happy when it happens to someone richer than we are.  It’s not very attractive when conservatives rejoice to see union members thrown out of work.  I’m not sure this is much better.


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8 responses to “Sympathy for the devil

  1. Walt

    Dude –
    Your point is well taken, and it is not nice to derive pleasure at the misfortune of others.
    Not everyone can handle money. It is like saying anyone can be a “professional” realestate…Uhmmm…It is like saying anyone can be a professional athlete!!
    Like you for example. What would you do if you had more money than Buffett? Piss it away on hookers and blow? Maybe buy guns and shoot yourself by accident? Bury it in your cave and then forget where you put it? Probably all of the above, so it is best you just don’t have any. Trust me on this. And even if you don’t, think about it this way and you will be happier. See, didn’t I help?
    And look at all those poor folks who win the lottery, piss it all away, and ruin their already pathetic lives. It’s so sad.
    Money is hard to manage. Only about 1% of folks can do it. I don’t know why, but that is the way God intended it. It’s not my fault I have the gift, no more than not having the gift of being able to throw a 100 MPH fastball.
    You agree?
    Your Pal,
    P.S – If you do score big, spending it on hookers and blow is not a bad way to piss it all away!

  2. Anonymous

    I’m with you on this Chris, I read the article this morning and I felt badly for most of them. It crossed my mind that Andrew Schiff might need to make the choice to hit the ‘burbs for his kids’ sake.

    I am very happy that I only occasionally suffer twinges of envy over somebody having “more” than I. It must be miserable holding small slights to your bosom for decades on end and rejoicing over somebody else’s setbacks in life. The fact that somebody has more than I do doesn’t mean that they “took” my share of anything or that I am somehow more “entitled” to it than they are.

    Meh, it’s a complicated thing this life and living.

    Of course, all bets are off the table once somebody has been exposed as a cheater and a fraud…just sayin’.

  3. Rude Poster

    Forget the ‘burbs, Andrew Schiff may need to go into hiding for his own sake. What a total d-bag!

  4. FlyAngler

    The cash portion of Street comp is the key. The annual spending budget, even on the “essentials” of those in this sphere, is known as burn rate and many on the Street are not making enough cash comp to cover their burn. Many are moving to the buy-side (HF & PE) while others are leaving the business while they restructure their budgets. Others are eating into reserves in the hope that things will turn around and this is just a slump. What they ignore, willingly or naively, is that Finance experienced a decades long, debt fueled compensation bubble that is quickly deflating. Go find the recent comments by Morgan Stanley’s James Gorman for a sense of how the new senior management see this – paraphrasing, if you don’t like it, leave.

    What is lost on too many here and elsewhere is the trickle down effect that is now reversing. While they are reveling in their schadenfreude, they should consider the secondary and tertiary effects of this sector cutting back. As the junior managing director sees his cash comp shrink, products and services are removed from the budget. Those products and services are often bought and engaged locally and that is money coming out of the revenue streams of the working class. This leads to a negative multiplier effect.

    While you might entertain feeling sorry for those in these articles, that sympathy might be better felt for those who service these households and for whom the negative revenue hit means far more at their income levels.

  5. Greenwich Gal

    I tell you this is kind of a crazy place. There is so much vanity in this area that it amazes me! It used to be old money stayed that way because they understood value. But now I see what I thought were smart people being taken down by their ridiculous spending. I guess I don’t have that much sympathy for all the nouveau riche habits of conspicuous consumption – ridiculous real estate, insane designer clothes, flashy cars and jewelry, multiple household servants etc. It is offensive, actually.
    As Mr. Greenwich Gal always said, “Right behind every boom is a bust and you better be prepared.”

  6. Greenwich Gal

    Nice post Fly Angler. Always good to hear your thoughts.

    Great post, FlyAngler. I’d love to believe that Gorman’s advice means that old-fashioned values will be brought to bear to the casino on Wall Street. Somehow, I doubt it. Once one acquires a taste for chateau-briand, it’s hard to settle for Spam.

    I fear Morgan Stanley, et al., will do what they have always done, manipulate the market — within certain parameters at first, to stay on this side of the law. Then when that line starts to blur, crossing it won’t seem like such a big deal. No doubt, baby steps toward that end are already being taken.

    As others on this blog have posted, why would top-notch engineers perform their algorithmic magic on bridge-building for a mere living when they can make a fortune playing the numbers game for Wall Street? (Yes, of course, there are some who will actually choose to build something tangible for the sheer love of creating something useful, and kudos to them.) Nevertheless, making more than a mere living can be a strong incentive to go where the money is. Despite new financial regulations, I’m sure that some new genius is already trying to figure out how to get around them.

  8. Thanks, CF, for both articles. They are quite elucidating, especially since I have been on both sides of the spectrum.

    Now that I am somewhere between the two (employed, living modestly, my needs met — which coincidentally equates to having my wants met as well), I can say that the downsizing that McArdle describes CAN have long-lasting benefits for any family going through it. Actually, these families will all have their needs met. That’s a lot.

    As for those kids who’ve been “yanked” out of their private schools, I’m sure it is hard for them. I’m also sure those kids’ characters will be better from the experience. Feeling humbled is not a disgrace. Not making the best of a perceived humbling situation is.