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File under "Misc."
Three items from the Week in Review in last Sunday's New York Times are worth mentioning, I think:
Alex Berenson's synthesis of the now-prevailing views of the past decade's stock market rollercoaster ride concludes:
James Chanos, a hedge fund manager who was one of the few investors to warn last year that Enron was manipulating its results, said that many of the companies whose stocks have collapsed this year have had obvious accounting problems for years. Yet Wall Street analysts and most money managers ignored the problems, while small investors broke an iron law of investing by buying stocks they did not understand, he said.
"For the most part, this stuff was hiding in plain sight," Mr. Chanos said. "Why did people do this? Why did people look the other way? It's a question for psychiatrists, not for economists."
(Poor sociologists. They can't get no respect.)
Another item, examining the success of Nickelodeon's SpongeBob SquarePants, quotes the overly subtle-minded Robert Thompson, a communications professor at Syracuse University, who isn't wearing any clothes:
"I think what's subversive about it is it's so incredibly naive — deliberately," said Professor Thompson. "Because there's nothing in it that's trying to be hip or cool or anything else, hipness can be grafted onto it."
Thompson's reasoning, for those following at home, goes something like this:
Subversive = Cool
SpongeBob = Cool
SpongeBob = Subversive
SpongeBob ≠ Subversive
Not Subversive = Subversive!
Finally, the Times' look at how Alan Greenspan has come to disown (at least some of) the (Ayn) Randian sympathies of his earlier days happens to throw in this passage, which I quote here simply because there is something very right about it:
Rand, of course, also had plenty to say about virtue and integrity, as in this 1944 letter to a friend who asked for advice on how to meet "a worthwhile woman":
One finds worthwhile men and women among people who work. Follow me here very carefully, forgetting the cheap generalities which all our modern minds have been stuffed with. I do not mean LABOR. I do not mean people who have to earn their living. I do not mean proletarians. ... I mean what you and I understand by the term "competent people." People who love to work, who are good at it, serious about it and concerned primarily with it. Bright, creative, productive, ambitious people. People who get money for their work, but who do not work primarily for the money — whether it's a weekly pay envelope or a thousand dollar bonus. People who are ambitious — not to climb socially, not to get wealth and titles — but ambitious to do more and more work of a better and better kind.
July 26, 2002 1:40 PM
Re: "For the most part, this stuff was hiding in plain sight," Mr. Chanos said. "Why did people do this? Why did people look the other way? It's a question for psychiatrists, not for economists."
I don't think you need a psychiatrist to figure it out: the analysts were pumping the stocks so their investment banking colleagues could do more deals. Analyst bonuses were tied to how much investment banking income they brought in! A few accounting problems? Who cares, I need another vacation home. There were few heroes among the analysts. A weak breed, indeed.
Posted by mike m on July 26, 2002 2:44 PM
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