Monday, July 18, 2005


HatTip to Power Line. Ben Stein is a new columnist for The New York Times' Business section. This week's article is solid:

AS should be clear to anyone who reads these columns, I am fascinated by finance. I have been since I was a lad. Finance distributes risk. The smart, aggressive, tireless men and women in it allocate capital. In many ways, this efficient allocation of capital - sometimes more efficient than others - explains why capitalism so thoroughly trounces socialism and communism.

Finance guys take risks that would terrify most of us. They carry immense burdens of fear and retribution on their shoulders. It is a wonder to me that the managers of hedge funds and the people who trade derivatives can even sleep at night. I know I wouldn't be able to catch one wink.

Still, when I read the daily news I am often struck by something that has nothing to do with the finance classes I took at Columbia or Yale, but in a way has everything to do with them.

Maybe I can summarize the dissonance in this little example: In the financial section of the newspaper or the business magazine, there is an article about a man, Philip J. Purcell, who has just left a huge financial services company after his performance was deemed subpar, and he's taking home a $113.7 million severance package.
Then I turn from the financial news to the general news section of the paper, or to the barrage of e-mail messages I get from people in the Army and Navy and Marines and Air Force, and I read about men and women who are taking fire from insurgents in Iraq and being blown up by homemade bombs that the Pentagon refers to as improvised explosive devices. The people being blown up are maybe corporals, and they get $1,900 a month, including combat pay.

Or I read a letter from a buddy of a member of the Navy Seals who was killed recently in Afghanistan when his helicopter went down, and he was getting maybe $1,950 a month, fighting the Taliban and fighting Al Qaeda (which killed 3,000 innocent men, women and children on American soil on Sept. 11, 2001). That means the guy at the hedge fund is getting as much as, say, 10,000 of these corporals per annum.

What keeps going through my mind is that there is a big, yet always unstated, connection between these two groups of men and women - on one hand, the megastars of Wall Street and corporate boardrooms, with their vast paychecks, yachts and horse farms in the Hamptons, and, on the other, the grunts in body armor chasing down terrorists half a world away in 130-degree heat.

The link is that the men and women of Wall Street and of corporate America do their very important work - and it is vital work, indeed - inside a box of security and safety created by the courage of the men and women who wear battle dress uniforms and ride down the highway of death in Iraq in armored personnel carriers handling machine guns.
(full article)

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