Tuesday, February 10, 2009

Oh, please

Go read this article: Trying to Live on 500k in New York City. Read the whole thing; it's short. I'll wait.
Sure, the solution may seem simple: move to Brooklyn or Hoboken, put the children in public schools and buy a MetroCard. But more than a few of the New York-based financial executives who would have their pay limited are men (and they are almost invariably men) whose identities are entwined with living a certain way in a certain neighborhood west of Third Avenue: a life of private schools, summer houses and charity galas that only a seven-figure income can stretch to cover.
Yes, the solution IS simple. Not just because there's no reason that the taxpayers should pay for your summer house; because a person who is responsible for managing a financial system which determines people's lives should have some CLUE WHAT PEOPLE'S LIVES ARE LIKE.

Talk about identity politics. There is no social good to be maintained by buttressing illusions of superiority in a handful of drones who shuffle numbers while other people do the work. There is, perhaps, a great deal of social good to be obtained by insisting that bankers be forced to learn to manage money.

For starters, consider this:
A modest three-bedroom apartment, she said, which was purchased for $1.5 million, not the top of the market at all, carries a monthly mortgage of about $8,000 and a co-op maintenance fee of $8,000 a month. Total cost: $192,000. A summer house in Southampton that cost $4 million, again not the top of the market, carries annual mortgage payments of $240,000.
What kind of a jackass buys an apartment with co-op maintenance fees that equal the mortgage payment? I took an open house tour this weekend of a very nice three-bedroom condo in Brooklyn, with views of lower Manhattan, the Statue of Liberty, and boats coming into the East River. The asking price was $955,000, with monthly maintenance fees of $510.74, and a projected mortgage payment after tax abatement of around $4000. This, of course, is still obscene, and I only went on the tour as a tourist, so to speak, but it's nowhere near $16,000 a month. That extra $10K or so is just a stupidity tax.

The thing is, all of the so-called hideous costs of maintaining an 'executive aura' can be avoided by the simple expedient of avoiding costs which only exist to maintain an 'executive aura.' In other words, drop your ego. The sordid truth is that nobody ever believed your ego in the first place; they're taking advantage of you. You are paying through the nose for everything you do because you are a shallow, gullible prick. And incidentally, that's also why you screwed up the financial system.


Anonymous said...

You are so right PL. I couldn't read more than a few paragraphs of that article before my stomach turned and my blood boiled.

There is an assumption that in order to make one's business look successful, one's business surroundings must look expensive. In other words, to keep attracting the best clients, you have to have a really fancy office trumpeting how successful you are, with pictures on your desk of the wife and kiddies playing on the beach at the summer home, or perhaps on your boat. As a customer, I have the opposite assumption. Especially in a financial situation, I prefer that profit to go back to me, the customer, in the form of lower fees and commissions, than toward showing off the wealth of the business in their expensive real estate. It just goes against common sense. It's the keeping-up with-the-Hamptonites Ponzi scheme. Guess who ends up at the bottom of the pyramid? It seems there is a reason I never understood high finance: because it goes against all reason!


Spatula said...

That article makes my blood run all bolshey.

Pretty Lady said...

Arrrgh, indeed. Joe just pointed out that being able to manage money well is NOT the same skill as being able to make so much money that you don't have to think about managing it well. It's about time we started hiring the former kind of person to manage the financial system, rather than the latter. Maybe even hire me. Or my sister; she knows all about finance from developing her co-housing project. She'd be really good at it. Where do I submit nominations?

Anonymous said...

Yeah, they ought to acknowledge the money-managing skills of someone who can live on $30K in NY by giving them a job managing money. Hmm, this is starting to sound suspiciously close to our idea that they ought to hire non-MFA's to teach in MFA programs because we have figured out how to make it as artists without benefit of graduate school and therefore have more skills to teach students. Ah, yes, but then there's the issue of harming the brand. If a non-MFA is teaching MFA's, doesn't that imply that you don't actually need an MFA to know this stuff? Yes, I am becoming a broken record, a metaphor that has to be explained to the very young because they might think it means breaking an Olympic record, running faster than the previous fastest runner.

Oh never mind. It's been one of those days.

Pretty Lady said...

You've pointed out a key element of our broken economy, O--having practical skills makes you less employable, not more so. I've been self-employed for the last seven years because I refuse to waste time and money jumping through hoops that just waste time and money. Certifications, diplomas and W-2 forms don't guarantee competence, but they're the only things that get you hired. All kinds of businesses, whether they be corporate, academic or health-related, have completely divorced their daily 'working' processes from any tangible results; they pay people in order to do meaningless busy work for a certain amount of time, not to accomplish a task.

I really, really hope this financial meltdown forces this country to shift to an economy that connects financial compensation to some sort of ACTUAL WORK. Meanwhile people like you and me may be surviving via barter.

Anonymous said...

"I really, really hope this financial meltdown forces this country to shift to an economy that connects financial compensation to some sort of ACTUAL WORK."

PL, I share your hope but have no illusions. Pavlovian dogs conditioned to having their folly (or criminality) rewarded are not about to change. Greed has a natural enemy - fear. Remove fear from the equation and greed will develop all manner of scam to avoid ACTUAL WORK.

Pretty Lady said...

George: huh. I have always seen greed as being driven by fear. Fear of poverty, of insignificance, of being alone, of abandonment, of death. Fear of getting to know one's own psyche in a deeper way. The greediest people I've known have also been the most fearful--they'll grab at anything, and keep grabbing and grabbing, rather than sit still and appreciate what they already have.

It is true that nothing will usually stop this cycle except a complete personal catastrophe--bankruptcy, divorce, a heart attack or other health crisis. Even then the person has to decide to confront their fears and change their ways, or they'll go right back to their old habits.

But the natural antidote to fear is love, and once we have set some firm boundaries in place against blatantly criminal behavior--both systemic and interpersonal--really learning to listen to one another's concerns seems to me to be a more promising path than bullying the fearful.

Anonymous said...

PL, the fear you allude to is very real and drives many people to the greed you speak of but this is more a matter of a personality/character disorder. The fear I had in mind is that which you refer to as firm boundaries. Setting firm boundaries involves, I believe, putting the fear of retribution in play, not only for criminal behavior but also for malfeasance, misfeasance, or any manner of ineptitude.

The fear I’m talking about is the fear of failure, of letting people down, of having failed a responsibility. Such fear was once the order of business. The extreme manifestation of such fear was that you’d end up in the same bread line as the employees, depositors, or investors you’d failed. That fear is gone and has been replaced by bailout and the miscreants just keep on going on – with nothing to fear.

Miriam Cutelis said...

Very well said....love it~