by Chidem Kurdas
Vanity Fair is not a magazine I follow, so I was taken aback when I flipped through an issue someone left behind at a café. According to the Editor’s Letter, “the chain of catastrophic bets made over the past decade by a few hundred bankers may well turn out to be the greatest nonviolent crime against humanity in history.”
Really? A few hundred bankers made millions of people live beyond their means, buy wildly over-priced houses, drive gigantic SUVs and put huge amounts of debt on their credit cards. Without those actions, the twin credit and real estate bubbles could not have inflated and hence there would have been no collapse.
“Never before have so few done so much to so many,” writes Vanity Fair editor Graydon Carter. That’s a very convenient way of looking at it—some banker made me do it, he should pay for it and be hung, drawn and quartered. Always a handy story and right now supremely fashionable.No wonder it is endorsed enthusiastically by the high priest of chic, the elaborately coiffed Mr. Carter, whose strong suit is creating impressions and images. Reality, apparently, is not his thing. A former colleague described him as someone who does not deal head-on with reality or feel encumbered by the truth. As a young man, he told people that he’s Jewish. He is not.
Here is how he explained the fiction later to an investigating reporter. “I thought, If you’re going to be an intellectual in New York, you gotta be Jewish.” So, you fabricate the appropriate background. And you peddle the latest myth, with photos to go with it.
In this case the pictures are of the fraudster Bernard Madoff – including an artsy one of a younger Madoff in what looks like a black turtleneck – accompanying an account by Madoff’s secretary. She doesn’t say anything interesting, but the photos are glossy.
There are many kinds of fiction. Some are harmless, but many have the potential of going out of control like Madoff’s. He will spend the rest of his life in prison, as he should. Other fantasies are damaging on a vast scale but nobody goes to prison for them.
A sense of personal responsibility is the only real defense against financial debacles. Responsibility, though, is an antiquated idea that has been out of fashion for a long time and was probably never very fashionable. The blame game destroys what’s left of it.
Take the 1990s stock bubble. A couple of hundred brokers and analysts forced us to buy Pets.com for stratospheric prices. We lost trillions of dollars because of their venality. Then we were forced to buy real estate we could not afford. Someone made people acquire McMansions at the peak of the market. Now foreclosures dot the land.
By the way, I’m thinking of buying swaps on the Brooklyn Bridge—you can make 150% a year. If it turns out badly, there will be sleek photos in Vanity Fair and an editorial against the greedy characters that made me do it.