Too Big to Fail - the sociology

In the interview Leslie Stahl, famous TV personality, did with Andrew Sorkin, author of runaway best seller, "Too Big to Fail", documenting the near death of Wall Street, there was this gem of an exchange about the top few men running Wall Street including Hank Paulson, then Secretary of Treasury, former Chair of Goldman Sachs:

..."LESLEY: What one really gets out of your book is what a closed little fraternity those guys at the top were.

ANDREW: It’s remarkable. It’s really 10, 20, 30 people who were involved in all of this. I mean … 30 people running the world, and they are all mostly men, with very few exceptions.

LESLEY: And even though they had competed, it’s almost as if they were on a football team together, or something. They’re in close with each other. They can pick up the phone and call each other at home. They can get in a car and go to each other’s houses. I had no idea.

ANDREW: I have to tell you, I found the intimacy among them very surprising. The idea that they were going to each other’s homes and calling each other every ten seconds, and that they all had past histories and relationships"....

IF you out there do not remember what Simon Johnson at MIT said in a controversial article here about the sociology of Wall Street, you may wish to reread it.

In that article he wrote, among many things, about a small group of people sharing similar backgrounds and values and acted as if they had all belong to the same eating clubs at Princeton or fraternities at Dartmouth and Harvard (Paulson). That group would include Geithner (Dartmouth) and Summers (MIT and Harvard). When that article came out, he was criticized widely for being "conspiratorial" which, by definition, should not be taken seriously by serious people.

Sometimes you do not even have to talk to one another all the time to act as if in concert -- if you share the same world outlook. But when you actually do share the same outlook and do talk to one another, then it would be as if one Jesuit priest trained in Rome talking to another trained at another Jesuit monastery even if separated by a generation 20 plus years ago or later.

The entire interview is here. It is a good read.