I started watching Mad Men with the first episode and was hooked. It was kind of by accident but really in response to an excellent and intriguing marketing campaign. I was susceptible because the AMC Channel had recently been added to my cable package and I had been watching The Hunt for Red October about 700 billion times…
Which co-incidentally is the number of dollars the American taxpayers are now forecast to pay out to protect the entire international finance system from greed of a couple of sets of people. On the one hand you can blame the people who bought the houses they could not possibly really afford using the sub-prime mortgages being offered. But frankly, responsible people who are seeing their home values fall are harder hit.
What is more black and white is the role of the Wall Street investment bankers, who facilitated this lending, pumped the derivatives and investment products based on mortgage backed securities and leveraged the whole Ponzi scheme to the point of inevitable collapse. And collected commissions and incentives and huge bonuses at each step of the way.
Apart from the horror at the shock to the financial system and the slack jawed astonishment of the sheer brazenness of the “Privatize the Profits; Socialize the Losses” two-step I am struck by nostalgia for the days when Investment Bankers did …well ummm… investment banking and not running scams that would make a Mob run keno game look like a good bet.
Mad Men takes place in a window that is so culturally specific, the period between the 50s and the 60s. But it was also a transition point for the advertising industry, traditionally dominated by genteel WASPs in grey suits running straight ahead print campaigns. Ten or 15 years later the game would be dominated by television and the more assertive “ethnic” admen.
For a hundred years the Investment Banks were a source of quiet capital and a career path for the lesser sons of the gentry. Show up at 9:00, leave at 4:30 for White Plains or Darien and in between enjoy a three martini lunch with friends from Yale. A comfortable living, not too much pressure, and a betty in the burbs.
When the business moved from being a soft landing for the C students of the Ivy League and became the destination for the hot-shit Type A, Gordon Gecko wannabe Harvard Biz School who expected a seven figure bonus in a shitty year and demanded that the letters VP appear on his cards (along with the 4000 other “VPs” in the firm) the die was cast.
And like a ponzi scheme, there has been so much collusion in letting this happen. Maybe because as with a Ponzi scheme, even those who know it is a scam are just hoping they can cash out before the suckers get stomped.
So fine, bail them out. But don’t just throw hundreds of billions of dollars at an industry that showed itself to be too greedy to even protect it’s own self interest. At least get something out of it. A stake in the potential profits if these assets turn around. A coherent regulatory environment. Or at least some public floggings.