Friday, October 17, 2008

Undermining the Cult of Authority

As Star Trek got right years ago, the United States is a primitive, authority-driven society. So, too, its marginally more civilized clones to its east.

Authority, of course, is more accurately termed "received authority". Thus, quite a few people correctly predicted the current financial absurdity, just as many predicted the disasters of the Iraq war. We might suppose they would now (even if not then) be recognized as authories. But they aren't. They remain largely ignored because they did not and do not enjoy the ear of The Idiots In Power, the Power Elite.

In the case of Wall Street, the naysayers of two or five years ago were typically liberal or progressive, did not have the Official Degree, especially a Harvard or Chicago or Wharton MBA. (Some like Elizabeth Warren, of Harvard Law School, did have the Harvard association, but not the relevant one. A Harvard or Yale law association becomes relevant, audible, and thus Authoritative, when justifying torture or mass killing of civilians. Consider Gonzales, Yoo, and company — the architects of the Iraq/Afghanistan war crimes.)

The point is that to undermine such a structure, it helps to be in a position that commands respect or a hearing. In the 1960s, Kim Philby and other Britons spying for the Soviets were allowed great and prolonged access to secrets because "No Oxford man" would do such a thing — "We were at school together!"

In the US, universities can bring such kneejerk acceptance. The war criminal Caspar Weinberger was known to be particularly keen on fellow Harvard lackwits. But in the US it is money that really talks. So the following Financial Times story (quoted in its entirety) is particular yummy. The Harvard MBAs get their noses rubbed in it by one who outdid them at the one thing they really value — amassing wealth.

Comical, or in this case, rich:

Hedge fund manager slams ‘idiot’ bankers
By James Mackintosh in London
Published: October 17 2008 21:13 | Last updated: October 17 2008 21:13

A hedge fund manager who made what is thought to be one of the biggest percentage profits of all time bowed out of the business on Friday with a fierce attack on the “idiots” running big banks who were willing to take the other side of his bets.

Andrew Lahde, founder of California’s Lahde Capital, used his farewell letter to investors to round on the US “aristocracy” able to pay for their children to gain a top-class education.

Mr Lahde, who has made tens of millions of dollars from his highly successful bets against the financial and property sectors during the past two years, also called for the legalisation of cannabis and said he was now dropping out to spend time with his money.

Saying he was “in this game for the money”, Mr Lahde went on to mock those who traded with him.

“The low-hanging fruit, ie idiots whose parents paid for prep school, Yale and then the Harvard MBA, was there for the taking.

“These people who were (often) truly not worthy of the education they received (or supposedly received) rose to the top of companies such as AIG, Bear Stearns and Lehman Brothers and all levels of our government.

“All of this behaviour supporting the aristocracy only ended up making it easier for me to find people stupid enough to take the other side of my trades. God bless America.”

Mr Lahde is one of the few hedge fund managers to have correctly predicted the subprime crisis. One of his funds made a return of 870 per cent last year. Money is now being returned to investors as the remaining business is shut down.

On Friday, Mr Lahde said he would no longer run other people’s money, preferring to concentrate on managing his own, and urged wealthy hedge fund managers and corporate chieftains to “throw the Blackberry away and enjoy life”.

“I will let others try to amass nine, 10 or 11 figure net worths,” he said.

“Meanwhile, their lives suck . . . What is the point? They will all be forgotten in 50 years anyway. Steve Ballmer [Microsoft chief executive], Steven Cohen [founder of hedge fund SAC Capital] and Larry Ellison [chief executive of Oracle] will all be forgotten.”

See also the full letter of Andrew Lahde.

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