by Beth Connolly on February 10, 2012
In his response Wednesday to New York Magazine’s “The End of Wall Street as They Knew It”, Matt Taibbi of Rolling Stone accuses Sherman of manipulating his sources and rips apart any bankers who maybe are little bit unhappy about the state of the Street. And plus–if bonuses are declining for good, we should all be HAPPY about it. The title of his post? “Why Wall Street Should Stop Whining.”
Taibbi is sure that Gabriel Sherman, the author of the NY Mag piece, manipulated his Wall Street sources in order to get the statements out of them he used to shape his article. Taibbi has heard bankers complaining much more about the Eurocrisis than their payouts. Sherman’s article quotes a banker who fears that his $75,000 after tax bonus won’t be enough to cover cab fare and his girlfriend’s high-class tastes, and his mortgage. Taibbi says,
I don’t know this reporter at all, and I’m happy to concede that he probably hangs out with more Wall Street people than I do. But I’m still in touch with plenty of people in the business, and I have yet to have any investment bankers crying on my shoulder about how the Dodd-Frank bill is forcing them into generic breakfast cereals.
Now, I’m sure if you put it to them the right way – “Hey, Mr. Habitually Overpaid Banker, do you think Barack Obama and the Dodd-Frank bill are ruining your bonus season?” – you’ll get a good percentage of people who’ll take that cheese and cough out the desired quote.
Second of all, Taibbi says, Dodd-Frank isn’t the reason bonuses are down this year–at least not according to some CEOs, whose public statements Taibbi takes verbatim as truth. It’s all about Europe and skittish investors, or as Lloyd Blankfein of Goldman Sachs said in 2011′s fourth-quarter reports, “global macro-economic concerns.” (Could those include, perhaps, regulatory uncertainty?)
And finally–the Wall Streeters who whined in Sherman’s article should quit it:
Listening to Wall Street whine about how it is misunderstood is nothing new. It’s been going on for years (often in that same mag). But if Sherman’s piece heralds a new era of Wall Street complaining about how it is not only misunderstood but undercompensated, you’ll have to excuse me while I spend the next month or so vomiting into my shoes.
The financial services industry went from having a 19 percent share of America’s corporate profits decades ago to having a 41 percent share in recent years. That doesn’t mean bankers ever represented anywhere near 41 percent of America’s labor value. It just means they’ve managed to make themselves horrifically overpaid relative to their counterparts in the rest of the economy.
A banker’s job is to be a prudent and dependable steward of other peoples’ money – being worthy of our trust in that area is the entire justification for their traditionally high compensation.
Yet these people have failed so spectacularly at that job in the last fifteen years that they’re lucky that God himself didn’t come down to earth at bonus time this year, angrily boot their asses out of those new condos, and command those Zagat-reading girlfriends of theirs to start getting acquainted with the McDonalds value meal lineup. They should be glad they’re still getting anything at all, not whining to New York magazine.
What do you think? Is Taibbi’s virulent response legitimate?