Michael M. Thomas | The New York Observer

Panic in Detroit

Thu, 18 Jun 2009 12:57:27 -0400

Let's talk Detroit for just a minute.

Forget the brouhaha the media have blown up around the head of "car czar" Steven Rattner. It doesn't bother me and shouldn't bother you. He happens to be one of those people it's too easy to dislike on principle: (a) because he's so obviously on the make it makes one's teeth hurt, and (b) he seems to have delivered performance sufficient to substantiate his flagrant...

A Claptrap to Lure the Groundlings

Tue, 09 Jun 2009 18:51:13 -0400

This seems like a good time to step back and see where we are and how we got that way.

In last Sunday’s Times, William Cohan and Sandy Lewis laid out a very convincing debunking of what many people with a grain of common sense and market experience believe to be a rosy propaganda barrage about the state of the economy and Wall Street, a barrage that is essentially delusional.

What Cohan...

Life, Liberty, and the Pursuit of the Great Giveaway

Tue, 26 May 2009 15:10:13 -0400

I think we have to be realistic. The people who brought us this mess, beginning with the failure of securitized loans that led to a credit crisis that has culminated in general economic conditions that are proving dire for a great many people around the world and in this country, those people … well, they’re going to get away with it, and—as I have written over and over again in this space—they’re going to...

The Great Geithner Giveaway, Part II

Tue, 12 May 2009 19:04:18 -0400

For today’s sermon, let us return to the always popular subject, Your Dollars and Mine at Work and Play. I doubt that 1 in 10,000 of We the Taxpayers (and 0 in 535 on Capitol Hill) has a grasp of what has really been going on in the Great Geithner Giveaway, so let me lay it out for you before moving on to the relevant texts. After reading this, you might care to have...

Friendship in the Land of Lost Content

Tue, 05 May 2009 18:39:56 -0400

The lengthy lead story about Lehman Brothers in the Business section of last Sunday’s Times appeared to confirm a theory I’ve been trying to put across for some time now (including to some well-known Times business writers): namely, that Lehman’s portfolio of commercial real estate assets was the real problem at that firm. I laid out the bones of the hypothesis on Forbes.com last October 7, within weeks of Lehman’s fall; permit me to...

Of Goldman, Geithner and Grifters

Tue, 28 Apr 2009 19:27:26 -0400

Last week I turned 73. In all that time (as it seems to me), I cannot recall seeing anything in a newspaper that filled me with as much disgust and outrage as this, which appeared on the front page of Sunday’s New York Times: “After Off Year, Wall Street Pay Is Bouncing Back.”

I brooded on this a good part of the day. The Times piece reported that average (not median, average) pay at...

Yes, Virginia, There Is a Goldman Sachs

Tue, 21 Apr 2009 19:12:11 -0400

When one looks at the financial/economic mess, one cannot help but be moved and saddened by the “collateral damage,” as functionaries call innocent bystanders killed and maimed in a terrorist or counterterrorist assault. Among the victims, start with the people who owned good stocks in 401(k) and investment accounts who’ve seen their retirement accounts down by 40 percent, even after the recent rally. For that we can thank the hedge funds and the shorts....

Who Will Be Left Holding The Bag?

Tue, 14 Apr 2009 19:30:00 -0400

Unless I’m mistaken, it was only seven months ago that Lehman Brothers slipped beneath the waves and others of this great republic’s signature financial institutions were poised to follow—unless upwards of a trillion dollars in Public Capital were quickly transfused onto their balance sheets.

Now, suddenly, banks are talking about robust and satisfactory first-quarter profits (largely, I suspect, by shoving the bad stuff below the line, as we bankers say) and complaining that the...

Dance to the Music of Geithner

Tue, 07 Apr 2009 13:09:40 -0400

Let me begin this week’s sermon by quoting from myself, from a piece I wrote for Forbes.com last October:

“Most halfway educated people know about idiots savants, people who are dyslexic, autistic or otherwise gravely impaired by ‘normal’ cognitive and psychological metrics, but who can reel off complex algorithms and theorems or intuit great scientific truths. I submit that there is a corollary genus, the savant idiot: festooned with credentials, diplomas, laurels and prizes...

Three Little Words Tell You Civilization Is Collapsing

Tue, 24 Mar 2009 19:33:03 -0400

We frequently identify the shaping forces of human affairs as “isms”: communism, fascism, capitalism, mercantilism, socialism and so on. In looking over the wreckage-strewn landscape of global finance, however, it seems to me that words ending in “ity” should have their turn at bat. “Rapacity” and “duplicity” are too easy, too obvious. “Timidity” works, but my inner jury is still out on Geithner, so I’m going to let it pass. The three little “ity”...

The Bear Facts

Tue, 17 Mar 2009 13:48:17 -0400

House of Cards: A Tale of Hubris and Wretched Excess on Wall Street
By William D. Cohan
Doubleday, 468pp, $27.95

Four years ago, on a grayish morning in late May, I left my Brooklyn home and made my way to Central Synagogue on Manhattan’s East Side. I came thither to pay my last respects to an old friend, Mickey Tarnopol, whose life had finally been claimed by a long...

My Own $2.5 Trillion Stimulus: $25,000 to Each Taxpayer: Three guys hatched it at Three Guys—it’s better than World War III!

Tue, 10 Mar 2009 18:20:07 -0400

A trillion here, a trillion there.

A trillion for TARP, a trillion for TALF.

Throw in what’s in the “stimulus” package and you’re probably at close to $3 trillion.

So why not simply distribute $25,000, tax free, to every U.S. taxpayer? There are 100 million of us, in round figures, so we’re talking about $2.5 trillion, give or take.

Stop Whining About The Dirty Word: Nationalization Is Just Equity

Tue, 03 Mar 2009 18:52:57 -0500

In stringing together the daisy chain of flawed risk analysis in which we are now all entangled—I am reminded of poor daft garlanded Ophelia drifting downstream to her sorry end—no one played a more heinous part than the rating agencies. That they are still in business, let alone regarded as minimally credible, I find amazing, yet even as I write, WNYC is reporting market apprehensions that AIG may be further downgraded and that this...

Why Didn't Warren Buffett Blast Moody’s?

Tue, 17 Feb 2009 18:48:00 -0500

On Wall Street, and on parts elsewhere concerned with Wall Street, the non-news snows thick and fast. On last week’s Daily Beast, the engaging online “aggregator” edited by Tina Brown, Edward Jay Epstein wrote in revelatory dudgeon about the fact that Berkshire Hathaway owns roughly 20 percent of Moody’s. The big rating agency is certainly one of the principal villains in the present crisis, and there is a certain tasty irony that a big...

My Personal Tax Plan to Save the Economy

Tue, 10 Feb 2009 18:49:48 -0500

In 1992, a major New York publisher commissioned me to write a book that reflected my take on what was going on in the country. In 1993, I handed over a manuscript of approximately 200 pages titled The Overclass, because that’s what I thought the big problem would be: the emergence of a self-regarding elite whose lack of moral and intellectual distinction was offset by wealth and the political clout that wealth could buy,...

My Economic Solution: Send $6 Million Men 25 Percent Unbonuses

Tue, 03 Feb 2009 18:42:12 -0500

When Yeats wrote of a “rough beast” slouching to be born, I doubt he expected that his apocalyptic monster would turn out to be a pig.

Well, it has. And I want blood. I want sausage. And so should anyone whose modest mite has been decimated by the hoggishness of Wall Street and the fanciful monetary and regulatory theories of the fools in Washington notionally charged with keeping an eye on the...

Round Up the Usual Suspects!

Tue, 27 Jan 2009 18:33:12 -0500

Suddenly, everyone’s discovered that Paulson’s original thrust—to use TARP to buy “toxic” assets off bank balance sheets—was right, and that the subsequent tack—to use TARP money to bolster bank capital accounts—was wrong. Everyone has also seen the light with regard to Lehman: that letting the big investment bank fail was an error of terminal proportions.

Hindsight’s wonderful, isn’t it?

It’s also crap.

The crux of any asset-purchase scheme,...

The Onerous Oenophile

Thu, 22 Jan 2009 13:23:21 -0500

Bordeaux: A Novel in Four VintagesBy Paul TordayHoughton Mifflin Harcourt, 308 pages, $24

Let me begin with a caveat: I greatly enjoyed Paul Torday’s first novel, published two years ago, Salmon Fishing in the Yemen. It mixed charm, expertise and a fine sense of place, and it dealt with its cast of obsessives with wise good humor in a smooth, agreeable writing style. I therefore looked forward to Mr. Torday’s second novel, Bordeaux—but I have...

Detox Aggregation: Buddy Up With Beijing

Tue, 20 Jan 2009 18:03:24 -0500

“De mortuis nihil nisi bonum …” “Of the dead speak aught but good.”

The ancient admonition seems the only way to hedge the reflection that as bad as Citi’s problems are, how much worse might they have been had Walter Wriston still been running the bank. It was the late Citibank CEO who, when he took over from George Moore in 1967, contrived to implant the go-go gene in...

Murdoch the Magnificent

Mon, 01 Dec 2008 13:43:30 -0500

The Man Who Owns The News: Inside the Secret World of Rupert MurdochBy Michael WolffBroadway Books, 446 pages, $29.95

Among people in what’s called “traditional media,” a genre that today ranges in intellectual and commercial standing from the indifferent to the near-extinct, it’s a commonplace to think of Rupert Murdoch as the Great Satan—as a cur, a pig and monster of the lowest order, a vulgarian whose acquisition of The Wall Street Journal in 2007...

Everything You Ever Wanted to Know About (Goldman) Sachs

Wed, 08 Oct 2008 12:10:03 -0400

The Partnership: The Making
of Goldman Sachs
By Charles D. Ellis
The Penguin Press, 729 pages, $37.95

Around 1990, I read somewhere that over half the graduating class at Yale had signed up to be interviewed by Goldman Sachs. I found the thralldom to Mammon that this bespoke by turns amazing, discouraging and in its way disgusting, and I said so in the column I was writing at the time for this paper.

At that point,...

Massive Portfolio’s Platinum-Plated Debut

Wed, 18 Apr 2007 09:58:29 -0400

So here it is at last, the distinguished thing.” Thus spake Henry James when the old boy with the hooded cloak and scythe cocked a bony come-hither finger from the foot of the great novelist’s bed. And exactly my sentiments when into my trembling hand was pressed a copy of the premier issue of Condé Nast Portfolio, the new magazine about which Manhattan’s media navel-gazers have been in a positive lather...

Resurrected by the Wrath of Liz Smith

Sun, 25 Feb 2007 19:00:00 -0500

In New York, the way we live now, to relinquish or be denied one’s boldface identity, whether in the form of a column mention or a byline, is to incur invisibility or social death (which amount to the same thing). I discovered this when I gave up writing in this space regularly. On the other hand, an instant’s boldface resuscitation is a Lazarus charm: People start calling again. Take the other day. I was...

Gad! Why Wasn’t I Asked to Schwarzman Party? Hell, I Won’t Grovel

Sun, 11 Feb 2007 19:00:00 -0500

Other readers of The Times of Jan. 27 were doubtless as fascinated as your correspondent by Landon Thomas Jr.’s account of the plans for a party to be held on Feb. 13 to celebrate the 60th birthday of private-equity pasha Steve Schwarzman. Fascinated, may I say, on several counts. For someone my age, who knew a time when businessmen moved mountains to keep their private lives and personal pleasures out of the newspapers, this...

A Mesopotamian Proposal: Restore Chaos’ ‘Dread Empire’

Sun, 21 Jan 2007 19:00:00 -0500

In the 15 years during which I more or less regularly conducted a column for this newspaper, I can’t recall presuming to address issues of foreign policy more than once or twice. I suppose this is because I’ve always found the question of what kind of country we want this one to be more interesting and pertinent in both the short and long run than what kind of a country we want Iraq or...

Spotlight on the Wealth Gap: Goldman’s Wretched Excess

Sun, 07 Jan 2007 19:00:00 -0500

In 1992, I wrote a short book about a number of things going on in this country that I thought we as a polity would be well advised to take a hard look at before they got hopelessly out of control. My focus was mainly on what I saw as the developing takeover of what I called “The Public Capital”—the right to draw on the full faith and credit of We, the People, the...

Sag Harbor Summer: After Many Sunsets, Artie Gimlet Returns

Sun, 20 Aug 2006 20:00:00 -0400

Never say never. So I’m reminded, in an acidly genial manner, by friends who’ve learned that for most of August I’ve rented an apartment in Sag Harbor, the village in which I’d lived from 1993 to 2000 and to which, on removing to Brooklyn, I’d vowed never to return. But here I am. This was not part of my original intention for the summer of 2006. As I have for the past few years,...

A Puzzling Inflation Fight- The Worst of Both Worlds

Sun, 16 Jul 2006 20:00:00 -0400

A fortnight ago, the Federal Reserve raised its base rate for the 17th time in two years, to 5.25 percent. The purpose of the hike was to fight inflation, classically defined as too much money chasing too few goods. Higher interest rates are thought to suppress the demand for credit, and with it, the specter of too much liquidity baying after goods, services and transactions.

Reaction to the Fed move was less than...

A Puzzling Inflation Fight— The Worst of Both Worlds

Sun, 16 Jul 2006 20:00:00 -0400

Hurray for Bloomberg, A One-Man Third Party

Sun, 21 May 2006 20:00:00 -0400

I wonder if other readers of the Times Op-Ed page are as aware of the mighty struggle that seems to be taking place in that venerated temple of received wisdom. It would appear that David Brooks has thrown down the gauntlet and seeks to unseat Tom Friedman as my-lips-to-all-asses, all-things-to-all-men purveyor of regime-justifying bromides. Personally, I think Mr. Friedman stands no more chance head to head with the odious Mr. Brooks than Salieri did...

Hurray for Bloomberg, A One-Man Third Party

Sun, 21 May 2006 20:00:00 -0400

I wonder if other readers of the Times Op-Ed page are as aware of the mighty struggle that seems to be taking place in that venerated temple of received wisdom. It would appear that David Brooks has thrown down the gauntlet and seeks to unseat Tom Friedman as my-lips-to-all-asses, all-things-to-all-men purveyor of regime-justifying bromides. Personally, I think Mr. Friedman stands no more chance head to head with the odious Mr. Brooks than Salieri did...

Hamilton Project Revisited: Foxes Guard the Henhouse

Sun, 07 May 2006 20:00:00 -0400

In the April 24 issue of The Observer, there appeared a letter of mine to Roger Altman with respect to the Hamilton Project, of which he’s a sponsor and a member of the Advisory Council. He replied the next day with the courteous, mature good humor typical of him. He expressed his personal fondness for me, which I appreciate; rejected my plea to cease and desist with the Project, not that (as he...

Hamilton Project Revisited: Foxes Guard the Henhouse

Sun, 07 May 2006 20:00:00 -0400

In the April 24 issue of The Observer, there appeared a letter of mine to Roger Altman with respect to the Hamilton Project, of which he’s a sponsor and a member of the Advisory Council. He replied the next day with the courteous, mature good humor typical of him. He expressed his personal fondness for me, which I appreciate; rejected my plea to cease and desist with the Project, not that (as he properly...

The Big Ugly Story of Our Time: Corruption Threatens the Dollar

Sun, 30 Apr 2006 20:00:00 -0400

My father had a very good war—he spent 1942-46 on carriers in the South Pacific, making him part of the first generation of American men at war to have to deal with suicide bombers—so I took it that he knew whereof he spoke when, in answer to my question as to what he considered the single greatest quality of the American fighting man, he answered without hesitation, “His common sense.”

We could use...

The Big Ugly Story of Our Time: Corruption Threatens the Dollar

Sun, 30 Apr 2006 20:00:00 -0400

Gad! Roger Altman: 'Hamilton Project' Is Spinach, Hell!

Sun, 23 Apr 2006 20:00:00 -0400

Mr. Roger C. Altman

Evercore Partners 55 East 52nd Street New York, N.Y. 10055 Dear Roger: You may recall that I wrote you a couple of years ago in connection with some ideas for the Kerry campaign. I didn’t hear back, which didn’t surprise me, although now that I think about it, the fact that I gave you your first job in investment banking, from which you have springboarded to ever greater visibility...

Gad! Roger Altman: ‘Hamilton Project’ Is Spinach, Hell!

Sun, 23 Apr 2006 20:00:00 -0400

Mr. Roger C. Altman Evercore Partners 55 East 52nd Street New York, N.Y. 10055 Dear Roger: You may recall that I wrote you a couple of years ago in connection with some ideas for the Kerry campaign. I didn’t hear back, which didn’t surprise me, although now that I think about it, the fact that I gave you your first job in investment banking, from which you have springboarded to ever greater visibility and prominence, might have...

The Miller Problem as Symptom: Institutional Rot at The Times

Sun, 30 Oct 2005 19:00:00 -0500

Remember the old Herblock Watergate cartoon? A circle consisting of Nixon et al. pointing fingers at each other. Well, sic transit the Judy Miller affair at The Times. The thing is, however, that when so many fingers can with even vestigial justice be pointed, there’s enough legitimate blame to go around. If this were a one-way street, the signage would have sorted itself out by now.

This seems to be one of these...

The Miller Problem as Symptom: Institutional Rot at The Times

Sun, 30 Oct 2005 19:00:00 -0500

Remember the old Herblock Watergate cartoon? A circle consisting of Nixon et al. pointing fingers at each other. Well, sic transit the Judy Miller affair at The Times. The thing is, however, that when so many fingers can with even vestigial justice be pointed, there’s enough legitimate blame to go around. If this were a one-way street, the signage would have sorted itself out by now. This seems to be one of these situations...

Who'll Clean Up the Bush Mess? Gore and Clinton (Bill, That Is)

Sun, 16 Oct 2005 20:00:00 -0400

In the past, faced with the Hobson’s choice of voting for a bunch of crooks or a passel of idiots, I’ve generally preferred the former. They cost less in the end; few crooks are capable of causing as abiding and wide a circle of damage as a bunch of idiots suddenly handed the levers of real power.

A longstanding contempt for the Bush family, to which I am related in a vague Episcopal...

Who’ll Clean Up the Bush Mess? Gore and Clinton (Bill, That Is)

Sun, 16 Oct 2005 20:00:00 -0400

The Story of the Hurricane

Sun, 11 Sep 2005 20:00:00 -0400

Dogs that don’t bark in the night have always captured my attention, and I suppose the same can be said of voices in the whirlwind that speaketh not. In all of the static that has followed the terrible catastrophe in New Orleans, the finger-pointing, the imploration, the keening and rending of garments, the blame-ducking, the grief and recrimination equally felt and equally justified, the one player most central to all that has been, is...

The Story of the Hurricane

Sun, 11 Sep 2005 20:00:00 -0400

The Story of the Hurricane

Sun, 11 Sep 2005 20:00:00 -0400

The Story of the Hurricane

Sun, 11 Sep 2005 20:00:00 -0400

As Time Goes By, You Can Call 2005 Year of Schwarzman

Sun, 07 Aug 2005 20:00:00 -0400

The other day, contemplating a couple of more or less recent news items, I had a thought. As we all know, the Chinese Zodiac consists of a 12-year cycle of which the segments are variously designated as the Year of the Monkey, the Year of the Pig, the Year of the Snake and so on. It should come as no surprise to readers of my stuff that I was born in the Year of...

As Time Goes By, You Can Call 2005 Year of Schwarzman

Sun, 07 Aug 2005 20:00:00 -0400

As Times Guy Keens, Durand's N.Y. Paean Abducted by Arkansas

Sun, 22 May 2005 20:00:00 -0400

The latest edition of The Oxford Dictionary of Quotations contains 46 gems from the pen or throat of Winston Churchill. Of these, among the best known is his 1939 characterization of Russia as "a riddle wrapped in mystery inside an enigma."

Churchill's neat tripartite apothegm fairly flew into my mind the other day as I contemplated certain aspects of the process by which Asher Durand's Kindred Spirits will be translated-in the manner of the Holy...

Fighting Misery With Memory, A Widower Hopes for Healing

Sun, 15 May 2005 20:00:00 -0400

Rules for Old Men Waiting, by Peter Pouncey. Random House, 210 pages, $21.95.

A week or so ago, John Saumarez Smith, who runs the great bookshop Heywood Hill in London, called to tell me that I must read Peter Pouncey's Rules for Old Men Waiting. It was less a recommendation than a mandate, so I did as I was told. John and I have been friends, and reciprocal reading mentors, for a long time, and...

Pound-Foolish Public Library Brass No Kindred Spirits to New York

Sun, 01 May 2005 20:00:00 -0400

Much has recently been made of the complaisance of boards of directors with respect to outrageous goings-on within the enterprises they're supposed to watch over on behalf of the stockholders: fun and games encompassing everything from looting and fraud to weight-in-gold pay packages that the late Aga Khan would have considered excessive.

We all know the names: Enron, Hollinger, the New York Stock Exchange and so on. Hanky-panky, thy name is legion. Well, I have...