The Wall Street Journal, Friday November 14th, reports on "culture clashes" between the brokers of Merrill Lynch and the bank that bought them, Bank of America. As the article portrays it, the values of Wall Street are coming in conflict with those of Main Street. "Merrill staffers joke that Bank of America employees are recognizable in the elevators by their less expensive attire and American-flag lapel pins."
Merrill Lynch is bullish on snobbery and status. These snobs, wearing more expensive suits, consorted to run their company into the ground. Now they look down on the company that rescued them and the people who work there as not being worthy, not sharing their own high status. It's another sign that failure will not humble Wall Street or cause them to change their ways. It's also a bad sign for Bank of America of the difficulty of getting these dandies to do an honest day's work.
These are the good people we're helping bail out and they look down their noses at the rest of us. It bothers me that we're providing welfare payments to people who fly first-class, stay in five-star hotels, eat in expensive restaurants, watch sports in skyboxes and travel in limos more frequently than rock stars, all the while being impeccably dressed in the classic fashion. It just makes me want to rise up out of my seat in coach, walk to the front of the plane and grab one of them by their silk tie. I want to scream: "Get out here, you bum. I know you're not the one paying for this." I'd half-expect them to defend themselves by saying "Hank Paulson said I could sit here."
The bare truth is that they have lived this lifestyle by taking people's money in return for worthless advice. Their specialty is knowing what's good for themselves, not understanding what's happening in the market. Read Michael Lewis's year-old article in Portfolio: The Evolution of an Investor about a broker named Blaine Lourd who finally understands the disservice he performs.
The problem was the entire edifice of modern Wall Street, in which some people –- brokers, analysts, mutual fund managers, hedge fund managers -– presented themselves as experts and were paid fantastic sums of money for their expertise. But essentially, Ellis argued, there was no such thing as financial expertise. "I read this book," Blaine says, "and I thought, My whole life is a lie, and everyone around me is facilitating this lie."
If you see a broker dressing like one from Merrill Lynch, tell him to loosen his tie, roll up his sleeves a little and lose the Italian-made loafers. Tell him times have changed and he won't be dressing anymore like he's made of money.