
I Crashed a Wall Street Secret Society - siromoney
http://nymag.com/daily/intelligencer/2014/02/i-crashed-a-wall-street-secret-society.html
======
jackgavigan
So it turns out that the wealthy and powerful are just like the rest of us -
they like getting together in private with their friends to have raucous,
alcohol-fuelled fun, and tell politically-incorrect jokes to one another.

I'm shocked! Shocked, I tell you!

It's just as well we don't live in a glass house! It would be pretty
embarrassing if tech industry people were to spend millions on, say a lavish,
LotR-themed wedding. Or if our awards ceremonies attracted protesters.

~~~
yoha
I have to agree with this. All the article have shown is that even
billionaires are people. The fact that they make intolerant jokes or that they
speak of the crisis lightly is not that shocking considering the fact that
they are in a private context. From what I understood, they are here to relax,
and that is actually quite similar to what you could witness in any
conventional meeting in a more modest population.

It would have been way more shocking if it had been done in public speech. Not
because it would have been known, but because it does not convey the same
meaning. In a private context, you can expect people to know you are joking,
or that this is a personal opinion you are able not to impose to others. In a
public context, you are expected to express yourself clearly and to take
position.

In regards to the conclusion of the sting, I can also understand that they
would not like that kind of material to be published. Imagine someone
threatening to publish recordings of you in shameful situations during a
party? From what I read, they were reasonable they seem to have let him go
without much trouble (I think they could have called the police and have his
phone confiscated without too much hassle).

~~~
ItendToDisagree
Agreed they are just people. The difference in this case being that they are
being insensitive (even celebrating) about something they did which had
negative nation wide (world wide) implications. Which is slightly different
than the average person's drunken antics at a party.

For a different (arguably larger) example, if someone is making light of (or
celebrating) genocide/slavery/some atrocity (that they or their compatriots
caused) and it comes out, that is very different than pictures of
Obama/Zuckerberg/Guy down the street being blackout drunk or even doing drugs
at a party.

~~~
rayiner
Most of them don't think "they did [something] which had negative nation wide
(world wide) implications." Most of them perceive the financial collapse as a
structural event caused by nobody in particular, that they couldn't have
personally averted, that they didn't intend to happen, that they are getting
blamed for. A very good analogy would be Google-ers and Facebook-ers getting
together and drunkenly joking about driving up the rents in San Francisco and
pushing out poor people. Possibly in bad taste, but not quite as bad as you're
making it out to be.

~~~
dpcheng2003
I'm a fan of imperfect analogies to prove a point so I can sympathize.
However, your analogy really lets off the bad agents in the financial crisis.

Enough people directly committed acts some would deem fraudulent (sell baskets
of bad loans to unsuspecting municipalities, approve bogus mortgage loan docs,
etc.) that they can't fall on the crutch of systemic breakdown.

It'd be like if these Googlers and Facebook-ers wrote software that inflated
real estate prices, driving out the poor and increasing the value of their
equity in their homes, before an inevitable collapse in which some government
bailout had to occur to prevent urban blight in San Francisco, thereby
creating a safety-net for the rich homeowners.

~~~
dhoulb
To extend and correct your analogy: it'd be like if Googlers and Facebookers,
and 20 other companies had to create and continuously improve software that
unintentionally drove up real estate prices, in order to engage in a highly
competitive market.

Their actions, writing the software, aren't necessarily malicious or risky. To
their mind they're just doing what everyone else is doing and trying to create
the best system.

Then they have an awards ceremony to celebrate the best software. Maybe in
poor taste, but they're not even really considering the real estate market.
Their game is software, and the financiers game is profit.

Like we don't generally think about the lives of people who make our clothes
or computers, because our game is fashion or programming.

It's groupthink that caused the financial crisis (and most other problems),
not necessarily malice.

------
quanticle
The problem isn't with the wealthy. Wealthy and powerful people have been
behaving badly behind closed doors since _at least_ the Roman Empire, and
probably before then as well. The problem is with us. Why don't we hold them
accountable for their misdeeds? Why do we buy into their rhetoric that they
are the job creators? Why do we give equal time to their views that they are
being persecuted like Jews during Kristallnacht, when the events of the last
few years have show that, if anything the opposite is true?

I think articles like this, honestly, are a disservice. They're comfortable.
They're easy. They put the blame on the wealthy -- "Oh look, those
billionaires and plutocrats are at it again!" \-- without asking the real
question: what systemic changes can we work towards today to ensure that
people like Vikram Pandit, Dick Fuld and Jimmy Cayne can't wreak the same kind
of havoc that they did in 2007? What can we do to ensure that people
appreciate the impact that obscure financial regulations have on their
everyday lives?

~~~
RodericDay
It's funny, I think exactly the opposite of this. Something along the lines
about how a sham democracy is worse than no democracy at all, because people
keep blaming themselves although they are being oppressed by plutocrats in
ways not really unlike violent threats in terms of control.

Instead of being starved, the threat is to get fired. Instead of lack of
education, people are blasted with advertisement. I think to say that the
fault is "within us" is a platitude about as banal as "the answer is somewhere
in the middle".

~~~
quanticle
Our founders said that the legitimacy of government comes from the consent of
the governed. Vox populi est vox dei. So why do we continue to consent to a
government that sets up an economic system that ensures that plutocrats can
behave badly and get away with it? I'm talking about cases like Dick Fuld,
where he drove his firm into bankruptcy, nearly upended the entire American
investment banking system, and still walked away with millions upon millions
of dollars. I'm talking about cases like Jon Corzine's, where there was
outright fraud -- M. F. Global was mixing its own proprietary money with its
customers', which is fraudulent -- and nobody went to jail.

I'm not even talking about solutions. I think talking about solutions is
entirely premature at this point. We haven't even identified the problem yet.
Why do a significant fraction of Americans vote against their own economic
best interests, even when they _know_ that their vote is harming them?

~~~
ItendToDisagree
Identifying the problem is actually pretty easy and you mention it in your
first sentence in the parent. It has been going on since at least the Romans.

Money begets power, power protects money.

There really doesn't seem to be much you can do about it... If you 'throw the
bums out' you get a whole new set of bums. Its a terrible thing but also a
possible fact of life.

One thing I would like to see though... Those who get caught actually getting
punished... Even if it is just for 'revenge among kings' purposes. The fact
that no one really gets in any serious trouble, for doing the sorts of things
you mentioned, shows the system is really broken, rather than the things
happening (because they will regardless).

~~~
kelvin0
If only Ayn Rand could see what her 'job creators' were up to these days ...
LOL

~~~
mariodiana
If you were at all familiar with her works, I think you would realize that the
"Bailout King" and his colleagues would be counted among the villains of her
novels -- the "looters."

~~~
quanticle
I'm not sure that anything in Ayn Rand's novels actually corresponds to the
realities of corporate capitalism. I'll take one illustrative example: the
discovery of Rearden Metal. In _Atlas Shrugged_ , Rearden Metal is depicted as
the product of the lone genius of Hank Rearden, who defied his own corporate
scientists and a made a metal that everyone else considered impossible. At the
time, Hank Rearden was not a lone inventor working in his garage. He was
already a plutocrat, with multiple millions to his name, and a large
corporation backing him.

Can you actually think of a case in the real world where that's happened?
Where the CEO of a multi-billion dollar corporation has personally made a
breakthrough discovery in his or her field? Of course not. Billion+ dollar
companies are crazy complex machines, and our hypothetical CEO has far too
much to be doing to be merely mucking around in the lab like a lowly research
scientist. He (and I use the masculine deliberately) has a corporation to run.
He has decisions to make!

No, the closest thing I can think of to Hank Rearden is Tony Stark or Bruce
Wayne. Genius CEOs of multi-billion dollar corporations who, by virtue of
their sheer brilliance come up with discoveries that all their trained
underlings miss, despite having far less time to devote to the topic at hand.
And, for that reason, I find Ayn Rand's scenarios to be deeply irrelevant. Her
characters, plot, and morality are more suited to comic books than novels.
There is no ambivalence, no ambiguity in any of her characters or her
situations, and her books turn into thousand page morality plays that one
reads without gaining any insight into how one should actually behave in the
real world.

To say that a living person corresponds to a character in an Ayn Rand novel is
akin to saying that a living oak tree corresponds to a page in a notebook. You
can argue that there are commonalities. But the commonalities between living
wood and dead paper do more to obscure than clarify. It is the same with
comparisons to Ayn Rand characters. At this point, I'm ready to just throw out
Ayn Rand analogies altogether in my rhetoric, for they seem to add more heat
to the discussion than light.

------
jrockway
I'm tired of hearing the term "the 1%" used for stuff like this. The 1% is
3,000,000 Americans. I've seen income figures for that demographic ranging
between $160,000 and $500,000 a year. The lower end is pretty much in reach of
any professional working in New York or San Francisco with more than a few
years of experience. (This is total compensation, 401k matching, stock, etc.)
All this tells you is that the population mostly lives in expensive areas;
rent in New York City can be 10x higher than elsewhere in the US.

I'll tell you as someone around that income range in New York... I don't get
invited to parties where we discuss how to screw over the working man. I ride
my bike to work, spend half the day there, ride my bike around Brooklyn, watch
some TV on a 720p LCD that I bought 6 or 7 years ago, and then go to bed in my
bedroom that's too small to actually contain a bed. (The mattress fits.)

Admittedly, I've accumulated some savings this way, but still, New York is
really fucking expensive, and it's not hard to spend make what sounds like a
lot of money on ordinary things like food and shelter in non-premium
neighborhoods.

~~~
GFischer
According to this, they also have 10 million in wealth, not only the 160.000 a
year. You're probably not in the 1%:

"The 1 percent threshold for net worth in the Fed data was nearly $8.4
million"

Source: economix.blogs.nytimes.com/2012/01/17/measuring-the-top-1-by-wealth-
not-income/

www.nytimes.com/2012/01/15/business/the-1-percent-paint-a-more-nuanced-
portrait-of-the-rich.html

~~~
twoodfin
That's a convenient (at least for the young, upper-income HN demographic) but
ahistorical definition. The use of "top 1%" in political rhetoric goes back at
least to Al Gore's 2000 campaign for president, as a cudgel against George W.
Bush's proposed tax cuts. Gore is quite clear in his October 17 debate that
he's talking about income when he speaks of the $330,000 (household) earnings
cutoff to be in the 1%[1].

It continued to be a common refrain against upper bracket tax reductions for a
decade, and it was still being used in that sense by politicians and activists
at the time it graduated into the slogans of Occupy Wall Street.

[1] [http://www.debates.org/?page=october-17-2000-debate-
transcri...](http://www.debates.org/?page=october-17-2000-debate-transcript)

------
mrspeaker
Comments on these kind of articles on Hacker News are always more defensive
than I'd imagine. I think we have a weird mix of people where 50% are "hackers
of computers" who'd do this shit for free, and will be doing it until they die
and 50% are "hackers of society" who are here because they see an opportunity
to make it to "big time" without having to have the right parents/schools etc.

It's strange how most of the time the two groups get along so well!

~~~
te_chris
You're giving the audience here too much credit that they're actually hackers.
On most articles like this it just feels like a bunch of doe-eyed,
aspirational men who really want to be rich one day, so don't want to spoil
the fun for their future selves.

Tangentially, this is what struck me about visiting America. We went to Hearst
castle and the reverence which the guides and the people on the tour paid to
the ghost and myth of Hearst was unnerving. Explains a lot about how wall st
gets away with stuff though.

~~~
ItendToDisagree
I get that feeling as well. There seem to be a lot of people responding to
these types of articles who have 'stars in their eyes' and think that they'll
be able to join the 'old boys club' if they just work hard enough, or get
lucky enough (though some also seem to deny that luck has anything to do with
success which baffles me).

The reverence for the wealthy in America really is a whole other weird thing.
America doesn't have the history (in time span) to really have many historical
heros other than those who were wealthy enough to 'do things' so we have to
make due with what we've got.

That is not to say that a great deal of any given place's heros of the past
were not also wealthy in their time though.

~~~
blumkvist
Luck?

Luck is invented to be an excuse for the feeble minded.

There is no luck involved in getting rich. If you want to get rich you have to
1) work hard 2) be smart 3) be unscrupulous.

The 3rd dependency is often misunderstood and the results of it are attributed
to "luck".

~~~
tragic
Yes, Paris Hilton had to put in a lot of hard, astute and unscrupulous work to
get those parents of hers.

In a past life, presumably.

~~~
blumkvist
Your comment just proves my point - people refuse to face the reality and
would rather come up with excuses, exceptions and other self-deceptions, than
admit they don't have what it takes.

And for the record, Paris Hilton did not get rich. She was born rich.

~~~
tragic
Oh, I'm happy to admit I don't have what it takes, according to your little
calculus. I'm lazy. I'm smart, but not that smart. And I find it emotionally
difficult to climb over other people's bodies to get to the cash money. But
that's fine - a life of relative material comfort and intellectual stimulation
is quite enough for me.

The point is, there are many people who _do_ 'have what it takes' in those
terms who will never, ever be rich. Are you seriously arguing that somebody
with a comfortable Orange County upbringing has the same barriers to entry for
riches, wealth and glory than somebody who assiduously grafts out a bare
existence in some Rio slum?

> And for the record, Paris Hilton did not get rich. She was born rich.

Alas, now you have conceded the principle, and we can negotiate over the
price. Paris Hilton was 'born rich'; what about, say, the child of a family
wealthy enough to afford a private education? Who got preferential treatment
in an Ivy League admissions process because they were born to an alumnus?
Whose uncle got them an internship at some bank?

~~~
blumkvist
> _But that 's fine - a life of relative material comfort and intellectual
> stimulation is quite enough for me._

No arguing there. I never said everyone should aim to be a millionaire. I just
find self-deception amusing and sometimes even irritating. Perhaps because I
fall for the same self-preservation techniques in different context at times.

------
netcan
In many ways we are politically a primitive society. Technology evolves faster
than culture. We are still (and this is especially evident on HN) thinking in
mid 20th century paradigms, remnants of half dead ideologies and long dead
political maneuvering. Just because these ideas have evolved over time does
not mean they are not half baked. That doesn't stop people from treating them
like a matter of personal identity.

The "Left" believes extreme wealth will inevitably corrupt the political
process. It's naive to think that billionaires will not use their money to buy
power and more wealth. The "Right" thinks that the state will inevitably
corrupt business and/or be corrupted by wealth. It's naive to think that
bureaucrats with a rubber stamps that adds a zero to the value of land or a
semi legitimate patent into an 8 figure asset asset will not be corrupted by
wealth. They call it regulatory capture.

IMO both these views, if we call them views are impoverished. They rely on
economic and political narratives that have "capital" & "labour" as their
basis. They are based on the idea that trade between Moscow & Vladivostok is
different to trade between Moscow & Milan.

We're always looking for ways to address power & money and their role in our
world. We're still not there.

------
tomp
> The jokes ranged from unfunny and sexist (Q: “What’s the biggest difference
> between Hillary Clinton and a catfish?” A: “One has whiskers and stinks, and
> the other is a fish”) to unfunny and homophobic (Q: “What’s the biggest
> difference between Barney Frank and a Fenway Frank?” A: “Barney Frank comes
> in different-size buns”).

We've got jokes about policeman, about blondes, about the French, about mostly
everybody... So, if the target of a joke is a woman, it doesn't mean that it's
a sexist joke, and a joke about being gay isn't a homophobic joke. If
anything, making fun of something means accepting is as normal, as part of
everyday life!

------
yummyfajitas
I found this the most telling part of the article: _The second thing I
realized was that Kappa Beta Phi was, in large part, a fear-based
organization. Here were executives who had strong ideas about politics,
society, and the work of their colleagues, but who would never have the
courage to voice those opinions in a public setting._

Based on the few I've met, these sorts of people aren't exactly shrinking
violets. Yet they live in fear that the rest of society will learn their
opinions and that bad things will come of it.

Back in the tech world, it makes me think of the attacks on Pax Dickinson and
Paul Graham. No matter how rich, powerful and competent you are, you live in
fear of the opinion makers accusing you of
sexism/homophobia/insensitivity/etc.

Definitely makes it clear where the real power lies in our society.

~~~
pille
> Definitely makes it clear where the real power lies in our society.

It does? I don't think the logic follows. Just because Wall Streeters are
paranoid and sensitive about their public image doesn't mean they are not
invincible.

This will hardly be a blip in the news, because of apathy, and because anyone
who would be mad about Wall Street guys acting like this is already mad and
can't do anything about it anyway. I don't think a few more Rachel Maddow
rants are really going to bring the system crashing down.

------
rjtavares
So people who rule Wall Street are sexist and homophobic. I'm surprised...
that some of those things seemed actually funny (a parody of ABBA’s “Dancing
Queen” called “Bailout King" has to be funny).

On a more serious note: congrats on the reporter for having the balls to crash
that party. Most things were expected, and properly offensive. But I don't
understand the shock at finance themed parody songs.

------
swalsh
I'd bet the articles he would have gotten from these people as trusted sources
would have been exponentially better than this piece.

This is just a bunch of guys hanging out with the only group of people who
understand their pressures. There's no conspiracy here, there's no "great
insight" to be had. I'm angry I wasted my time reading the article.

~~~
scrumper
My thoughts exactly. In the excitement of being caught gatecrashing a pretty
exclusive party, I get the feeling the author rushed to write what must have
felt like an exclusive, bring-the-system-down exposé. Instead, we got a mildly
diverting piece that confirms our suspicions about how the rich and powerful
behave behind closed doors, and the author blew a career-making opportunity
for inside access.

It's a shame, because there's definitely a story to be told about these people
involving the 2008 crisis and the enormous drain on the public purse that the
bailout caused. That story is surely more juicy than 'the rich think the rest
of us are suckers for rescuing them.'

------
ballerindustry
I don't really see the problem with them telling insensitive jokes and acting
like idiots in their time off. How they act at work is more important. Pretty
stupid article.

~~~
pille
We already know their behavior at work is pretty terrible. The article just
highlights that, deep down, they're not actually great guys once you get to
know them.

------
spindritf
Someone told a homophobic joke, that's it? @GSElevator[1] does more hard-
hitting reporting.

If we're going to be upvoting TMZ-style articles, they could at least be
properly scandalous.

[1] [https://twitter.com/GSElevator](https://twitter.com/GSElevator)

------
teddyh
Original title, and current headline: _1% Jokes and Plutocrats In Drag: What I
Saw When I Crashed a Wall Street Secret Society_

------
mercurialshark
I really hope this guys 1% reference is metaphorical. You can be in the 1% and
not be able to afford a weekend stay at the St. Regis.

But you wouldn't expect accuracy from a guy who appears genuinely surprised
that financial executives have a club. Guess what? Sometimes, they play golf
and tennis together too. Someone alert the SEC...

~~~
GFischer
"You can be in the 1% and not be able to afford a weekend stay at the St.
Regis"

I think you're seriously underestimating the wealth of the 1%:

"The 1 percent threshold for net worth in the Fed data was nearly $8.4
million"

So basically, everyone in the 1% has 10 million or more. I doubt a weekend
stay at the St. Regis makes a significant dent.

Source: economix.blogs.nytimes.com/2012/01/17/measuring-the-top-1-by-wealth-
not-income/

www.nytimes.com/2012/01/15/business/the-1-percent-paint-a-more-nuanced-
portrait-of-the-rich.html

~~~
rbcgerard
haha - you should probably read the articles you reference:

"Some readers wondered if the 1 percent by wealth weren’t an entirely
different group of people from the 1 percent by income. But there is
substantial overlap: the Fed data suggests that about half of the top 1
percent of earners are also among the top 1 percent in the net worth
category."

~~~
GFischer
So the grandparent poster is not in the 1% of wealth, but might be in the 1%
of earners :) .

When I think of the 1%, I think of the former, but I guess many are
referencing the latter.

In any case, I am neither :P

------
Cless
The plutocrats are right. Of course they are being persecuted. I guess that's
what happens when you have done everything in your power to redistribute
wealth from the bottom to the top. But then again, trickle-down economics has
worked wonders for society.

------
zacinbusiness
I don't think any of the antics of these guys should be a surprise. I mean
they are all at the top of the finance ladder, and you don't get there without
being a psychopath.

------
yuhong
There was a HN thread that suggested that Eric Schmidt be fired after the anti
poaching scandal.

------
junto
I'll just leave this here:
[http://upload.wikimedia.org/wikipedia/commons/b/bf/Pyramid_o...](http://upload.wikimedia.org/wikipedia/commons/b/bf/Pyramid_of_Capitalist_System.png)

This isn't new and it is unlikely to change unless Tyler Durden comes along.

------
siromoney
I didn't crash the Wall Street secret society :) the article is adapted from
Kevin Roose’s book Young Money

------
taivare
I don't believe the Wall Street bankers of the ' Greatest Generation' would
have displayed such crass, even in private. This new breed far less class, far
less men, far less respect for the countries citizens.

------
etanazir
The rhetoric is competition; the reality a cabal.

------
winn-dixie
Why did he wait two years to publish this article? Did he (attempt to) take
advantage of what was revealed before publishing?

------
bhousel
Can someone in the wall street secret society plz send me an invite? Email is
in my HN profile, kthx.

~~~
snorkel
No invite needed. You can just walk right in! Although they'll probably be
checking invites and ids next time.

------
carlob
This reminds me of the Simpsons' Republican party headquarters.

~~~
snorkel
_Who controls the British crown? Who keeps the metric system down? We doooo!
We doooo!_

------
Cowicide
Megalomaniacs are also sociopaths. Who knew?

------
michaelochurch
Main takeaway: these guys aren't evil in the Sith Lord sense, but they're also
completely not up to leadership. Rather than being cosmically evil, they're
just a bit dumb, a bit insensitive, and a bit sad. Reality, for them, is
emasculating and disempowering, but also humanizing.

