The Bloatocrats

The New York Times, perhaps out of zeal to ensure equal time for everybody, has afforded some of the richest CEO types a chance to sound off about themselves. One of the bloatocrats quoted in the piece is Kenneth C. Griffin, the head croupier at a hedge fund called the Citadel Investment Group. Last year he was rewarded for his labors with compensation in the billion-dollar range.

He says in explanation of why we are lucky to have him as a fellow citizen that, "We have helped to create real social value in the U.S. economy." The money he has made from social value creation has little or nothing to do with his endeavors which put him on a higher plane than the rest of us (Mother Teresa excepted) who go to work every day to earn a salary.

Mr. Griffin, wise beyond his 38 years, told the newspaper that in his experience those in business for the money "soon discover that wealth is not a particularly satisfying outcome." The countryside, it may come as a surprise to learn, abounds with hapless, dissatisfied billionaires wandering around mumbling about their disappointing outcomes.

At his own casino, the Citadel Investment Group, Mr. Griffin says "money is a byproduct of a passionate endeavor." He team, he claims, "loves the problems they work on and the challenges inherent to their business." May he and his team be a role model for us all. Rather than Mr. Griffin's moonshine, give us Gordon Gekko every time.

"I think there are people, including myself at certain times in my career," quoth Leo J. Hindery Jr., "who because of their uniqueness warrant whatever the market will bear." Mr. Hindery got a lot of what the market would bear by putting together a TV sports network--a piece of real social value creation if there ever was one.

Another proud bloatocrat interviewed by the newspaper is Robert C. Pozen. Of him the Times writes, "He made a name for himself--and a fortune--rejuvenating mutual funds, starting with Fidelity.... 'In every organization there are a relatively small number of really critical people,' Mr. Pozen said. 'You have to start with that premise, and I made a big difference.'"

Some of the "critical" men figuring prominently in the article are like celebrities who are famous for being famous. Mostly these guys are rich for being rich. Their names are not linked with much more than backroom manipulating money and companies.

Sanford I. Weill, the ex-big man at Citigroup and a billionaire, reflects that, "I once thought how lucky the Carnegies and the Rockefellers were because they made their money before there was an income tax.... I felt that everything of any great consequence was really all made in the past.... That turned out not to be true and it is not true today." Carnegie made steel, Rockefeller gave us kerosine to light our lamps and then gasoline to drive our cars. Mr. Weill got to be the head of a bank which he did not start. He got his money, but what the ordinary person got is not so obvious. He made the bank a lot bigger, but with the trouble our financial institutions are in at the moment that is not much of a boast.

Lately there has been grumbling about what polluters the big rich are with their private planes and their Sasquatch-sized carbon footprints. That is only half of it. The writer of the Times story, the very capable Louis Uchitelle, points out that "only twice before over the last century has 5 percent of the national income gone to families in the upper one-one-hundredth of a percent of the income distribution--currently, the almost 15,000 families with incomes of $9.5 million or more a year."

Money is mansions and servants and private jets, but money is also power. CO₂ aside, the luxuries do not matter. What matters is the power money buys. That upper one-one-hundredth of a percent not only own this country of 300 million, they run it.

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