My position on breaking up banks generates questions from two groups. Libertarians ask, how can I justify breaking up private sector institutions? Naive liberals ask, why is this policy not embraced by our political leaders?
My answer to both relates to what I call the Harvard-Goldman filter.
The Harvard-Goldman filter works like this.
1. To get into a position of power, you have to pass through a filter. The easiest way to show that you can pass through the filter is to go to Harvard and then work for Goldman.
2. If you do not go to Harvard and work for Goldman, then you have to show that you can get along with people who did.
3. The best way to show that you can get along with people who pass the Harvard-Goldman filter is to show that you believe in applying the Harvard-Goldman filter.
Why was Tim Geithner regarded as such an obvious, in fact necessary, choice to be Treasury Secretary? Because he satisfies the Harvard-Goldman filter, particularly point (3). He is not going to bring people from the wrong social caste into the policymaking arena.
Kling says later:
A point that I keep making about higher education is that it is, like the Harvard-Goldman filter, a form of recursive credentialism. To get certain jobs, you need certain credentials. And the most important credential of all is that you must signal your support for credentialism.
My published articles are archived at iSteve.com -- Steve Sailer
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36 comments:
Perhaps the time has come to break up the Ivies.
Dang! I knew I shoulda gone to Harvard!
Yves Smith, who is one of the most genuinely radical writers on finance out there (www.nakedcapitalism.com), went to Harvard and worked for Goldman.
Don't pin Wall Street crime on Harvard. First, the university was a major Wall Street victim, having lost more than a billion from its endowment recently after stupidly buying some derivatives.
After derivatives bankrupted Orange County more than a decade ago, you think these institutions would have learned their lesson.
Also perhaps the two biggest enemies of the big banks in Washington are Alan Grayson, who earned multiple Harvard degrees, and Elizabeth Warren, an Harvard law professor.
Here is Warren, attacking Geithner and Paulson both:
http://www.youtube.com/watch?v=QzD1w4Y9IpQ&feature=related
He is Grayson:
http://www.youtube.com/watch?v=6HYq6kdseV8&feature=channel
Geithner was actually far too stupid for Harvard, he went to Dartmouth and then a master's program and John Hopkins.
JHU is pretty competitive for Ph.D. admissions, but for MA's they will hand them to anyone with a pulse and $30,000 in tuition.
Steve, would you agree that much of the hate that "Wall Street" gets is motivated ALMOST entirely by ... ENVY (or jealousy)??
You're the king of "tellin' it like it is"
Are we all just playa-haters??
@Bob
I love Elizabeth Warren, but I'd point out that
1) she came to Harvard relatively late in life
2) Her research is great -- and typically female in that she focusses on a 'typical family' and their experiences rather than a deductive model -- but her big idea, making credit card terms more transparent, is hardly system threatening policy.
Maybe the advantage of Harvard and Goldman derives from a simpler combination. They are both 1) extremely competent and demanding institutions, with high standards of recruitment and performance, 2) whose major figures, with a few exceptions like Richard Herrnstein, have generally agreed not to speak candidly about facts that upset the political class and dominant media culture.
Unfortunately, the alternative sources of men and measures are slightly lesser academic and business institutions whose significant figures are even more silent on these facts.
As a Yale Man I strongly object to the suggested filter.
I do not object, however, to the suggestion that Geithner got through the Harvard filter.
"was a major Wall Street victim"
I've heard something similar about suffering at Goldman Sachs and other finance houses, and so I propose we get a new definition for 'major Wall Street victim': Just brainstorming here, but maybe bankrupt/unemployed/in-debt could be a good starting point. Is Harvard now in any of those categories? Sure, gross, it lost a lot, but in the land of the blind....
MarAkin,
Who cares? Do you want to live in an America where the only solvent company is Goldman Sachs and the only stable job is minion for the Fed?
Vibrant playa neighborhoods are great places to raise families, right?
"Don't pin Wall Street crime on Harvard. First, the university was a major Wall Street victim, having lost more than a billion from its endowment recently after stupidly buying some derivatives."
Harvard will make it all back in far less time than it will take my retirement account to recover.
I've often thought Harvard grads are like self-seeking economic immigrants from India and Asia in that their labors and schemes only benefit themselves, and at the expense of the host economy and society. Harvard grads often receive unjustifiably large compensation just for being "the smartest guys in the room," not for actually having brilliant ideas. When is the last time you heard of a truly transformative technology being invented by someone from Harvard? (Facebook? Bah, hah, hah.)
Since they have such outsize influence in finance, why haven't Harvard grads trashed Harvard's reputation by now, given the current state of the economy? Hasn't anybody yet figured out that it's the actual experience of attending Harvard that turns so many of its alumni into greedy, dishonest, self centered, arrogant monsters of privilege who are perfectly fine with destroying the wealth of others to enrich themselves.
In a parallel non-Harvard universe, an intellectually gifted high school student might develop some integrity and do something constructive in his professional life.
" much of the hate that "Wall Street" gets is motivated ALMOST entirely by ... ENVY (or jealousy)?? "
I don't see any hatred of Buffet, Jobs or the Google founders. They are all richer than Wall Street types.
Wall Street is hated because their wealth is not the result of creating products that benefit anyone outside of New York. They are also hated because they get bailed out when they screw up.
That's why it's 'went to Harvard' AND 'work for Goldman'. Plenty of African studies and English majors at Harvard and who aren't fond of the banks ;)
Frankly, even the scientists at these places lean left; between AGW and conservative anti-intellectualism, there really isn't much on the right for a scientist anymore. Some engineers are conservative.
There are conservatives at Harvard, but I imagine most of them want to work at the banks.
I don't know why my comment about Yves Smith didn't make it through Komment Kontrol. I didn't say anything offensive - just stated the truth. She's smart and has a good blog, but it's a fact - she is old and retired. Aside from any influence her blog may have, she doesn't move in those power circles, at least not actively at this point.
My position on breaking up banks generates questions from two groups. Libertarians ask, how can I justify breaking up private sector institutions? Naive liberals ask, why is this policy not embraced by our political leaders
Seems like the libertarians are the naive ones, if they imagine that the banks (at least the big banks) are private sector institutions.
Also perhaps the two biggest enemies of the big banks in Washington are Alan Grayson, who earned multiple Harvard degrees
Greyson is s frothing lunatic. Frothing lunatics have been known to say correct things once in a while, but they remain frothing lunatics.
Last I heard of Greyson, he was trying to get Holder to imprison one of his critics. The man's a totalitarian thug as well as a frothing lunatic. People like him make me wonder if the country would not be better off banning all Harvard lawyers from any position in government.
Bob:
Minor correction: it's Johns Hopkins.
I don't think the hate of Wall Street is motivated by jealosy, any more than the hate of crackhead welfare recipients is motivated by jealously (presumably jealously of the grade-A crack they smoke).
I think you can spot the pattern.
Sorta OT: OK, I finally found something that I don't like about Sarah Palin and I'm now firmly on the anti-Palin wagon. Take a look at her Twitter page, sample:
"Earth saw clmate chnge4 ions;will cont 2 c chnges.R duty2responsbly devlop resorces4humankind/not pollute&destroy;but cant alter naturl chng"
"Copenhgen=arrogance of man2think we can change nature's ways.MUST b good stewards of God's earth,but arrogant&naive2say man overpwers nature"
"Packing up 4 return 2 Alaska in time 4 kids' dance recital&bball game + 2 great book events @Elmendorf/Eielson!Its been a great trip Outside"
Jeepers, she's 6 years older than me and it's like reading a preteen girl's ramblings. Back to the kitchen, sweetie, if you're going to write like that.
http://twitter.com/SarahPalinUSA
Libertarians ask, how can I justify breaking up private sector institutions?
I wonder the extent to which this is true. It certainly isn't implausible, but are libertardians really that naive?
If so, and if they ever became a big threat to the establishment, they could probably be mollified by a very public takeover of the government by Microsoft or Exxon. No changes, just a big ad campaign, then slap on a sticker. :)
Steve, would you agree that much of the hate that "Wall Street" gets is motivated ALMOST entirely by ... ENVY (or jealousy)??
http://market-ticker.org/
But don't mind me, I'm economically illiterate.
"Bob said...
Don't pin Wall Street crime on Harvard. First, the university was a major Wall Street victim, having lost more than a billion from its endowment recently after stupidly buying some derivatives."
Yeah, and Nikolai Bukharin was a major victim of Stalin - that doesn't mean he hadn't earned a spot in front of a firing squad.
"kudzu bob said...
Perhaps the time has come to break up the Ivies."
Good point. Since we have a left-wing administration, that is ostensibly for the common man (allthough we all know better), what better time than now to launch a campaign to nationalize the ivies. How dare these malefactors of great wealth arrogate to themselves the gate-keeping status they have. They should be operated by the government as a public trust.
Down with Big Ivy.
Barely on topic: Obama just attacked another country:
"Just one day after a very public denial that American forces were in the process of attacking sites in Northern Yemen, President Barack Obama ordered multiple cruise missile attacks on sites across the tiny, coastal nation."
http://news.antiwar.com/2009/12/18/us-attacking-yemen-after-all/
He is, quantifiably, a bigger warmonger than Bush. You can't keep launching missile strikes - which are war crimes, under international law, by the way - and not expect blowback.
Check this out:
http://www.vdare.com/appeals/current.htm
"At this exact point in time, VDare has $7,348.16 in its bank account. But, between payroll, expenses, our yearly audit, and the website redesign we started, the bills due this month total $42,000."
----------------
Everyone, I suggest you donate $10 to Vdare. It's the price of two cups of Starbucks coffee. Billionaire liberal Jews like Soros, David Geffen, Google boys, and many others are donating TENS OF MILLIONS to ACLU, $PLC, and the like. Liberal Jewish money has taken over the Sierra Club, which has been financially pressued to support open borders and more immigration from the Third World.
The least we can do is donate $10 to Vdare, one of the few outfits out there to take on Liberal Jewish Power. So, before you plunk down $10 for another Hollywood movie made by Liberal Jews or $50 for some stupid videogame designed by Silicon Valley liberal geeks--both of which will donate handsomely to the Democratic Party and other leftist organizations--, how about donating a measly $10(or $20 if you can afford it) to Vdare? Are you a patriot or a consumerist zombie who cares more for Starbucks coffee or some dumbass Hollywood movie? Give $10 and boycott Avatar by Cameron. What matters more? The fate of the nation or 2 hrs of dumb pleasure?
The Harvard part of your argument is correct, but the Goldman aspect is quickly losing luster since the Goldman guys aren't making the most money. In a typical year, the manager of a top 50 hedge fund will make at least $50 to $100 million MINIMUM whereas the CEO and top Goldman guys made a max $50 million in their BEST year. Also, the top students out of Harvard are going to private equity, venture capital, and hedge funds which pay more out of college and are WASPier places to work.
Geithner went to Dartmouth
I finally found something that I don't like about Sarah Palin and I'm now firmly on the anti-Palin wagon. Take a look at her Twitter page, sample:
If this is what sends you over to the anti-Palin camp then I suspect that you're a moron. Do you know how Twitter works? There is a 140 character limit, including spaces, to each message.
I counted the characters in her first message, 138.
Here's the challenge for you - compose the same message using Queen's English and hit every point she made and do so under the character limit.
Also, the top students out of Harvard are going to private equity, venture capital, and hedge funds which pay more out of college and are WASPier places to work.
WASPier? I work in private equity - it's the same crowd, buddy. VC firms, HFs, and PE shops generally hire out of grad school or hire guys with a few years of experience. A lot of the experience is in IBs.
And WASPs are a small minority at Harvard.
break up everything...society is seriously out of scale
Hey Robo. It's true Harvard is 25% Asian, and probably 25% Jewish with another 25% in Catholics, blacks, and foreigners leaving a smallish 25% share for the WASPs.
That said, they are fighting to maintain the status quo.
http://www.newyorker.com/archive/2005/10/10/051010crat_atlarge
You can't keep launching missile strikes - which are war crimes, under international law, by the way - and not expect blowback....
You Muslims are losers.
I have to agree with the alumni of Ohio State who posted here.
The best hedge fund managers laugh at how little Goldman Sachs pays its top people.
Just to name one example, the hedge fund manager Paulson had take home pay of $3 billion dollars - AFTER paying out his LPs and all his employees.
As for the waspiness of the hedge fund industry, generally a great track record requires an IQ at the extreme right tail of the curve. Since females tend to cluster more towards the middle of the curve and males tend to be better represented at the extremes, almost all top hedge fund managers are males.
Each ethnic group with a higher than average IQ is represented.
Julian Robertson famously trained a large group of episcopalian southern WASP young gentlemen to be hedge fund managers and more than half a dozen of them are now billionaires. For more detail on these folks, google "tiger cubs"
By the way, Many hedge funds are very small in terms of number of employees and feel that Griggs vs Duke Power doesn't really apply to them.
As a result they will often administer IQ tests. It is common for people without the Harvard pedigree to get jobs so long as they prove they have a harvard level IQ.
Jim Simons is famous among his peers for hiring almost exclusively based on IQ - in fact he doesn't value experience or an MBA or even knowledge of finance. All he cares about is IQ. Simons by the way has plenty of nerdy, bespectacled, somewhat autistic employees who have never held a paying job in their lives other than working for Simons. some of these employees now have hundreds of millions of dollars in the bank thanks to their employment with Simons. I wonder if our friends over at roissy would consider these guys to be "betas"
I see a problem with these Harvard Goldman people. They did not hang around enough with people who cannot and will not pay back loans.
I wonder if our friends over at roissy would consider these guys to be "betas"
Well if they were spending all of their time staring at Bloomberg terminals and not pulling the quality and quantity of women that much poorer and much more socially adept men were, then yes, these guys should and would be considered "betas."
Steve, I was going to read this post but realized you are not qualified to post on anything. You were not graduated from Harvard. You, perforce, are not a leader.
But since I, too, didn't go to Harvard, I went ahead and read it.
Us proles gotta stick together.
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