Maurice R. Greenberg, ex-C.E.O. of A.I.G., saw the value of his holdings in his former company change — in one day — from $15.8 billion to $911 millio

The Harder They Fall, the More I Smile
Daniel Vasconcellos

* Sign In to E-Mail or Save This
* Print
* Reprints
* Share
o Linkedin
o Digg
o Facebook
o Mixx
o Yahoo! Buzz
o Permalink

Article Tools Sponsored By
By JOHN SCHWARTZ
Published: October 11, 2008

THINGS are bad. Very, very bad. The markets are still seesawing crazily, and financial institutions are folding and being taken over so quickly they’ll have to replace their signs with Jumbotrons to keep up with the name changes. Our own president noted last month that “If money isn’t loosened up, this sucker could go down,” meaning — I think — the economy. But nobody seems to know if the huge bailout plan will work.

How does all of this compounded badness make me feel?

Not so bad, surprisingly.

You see, I was never able to make much money in the markets. I agree with Daniel Waterhouse, a character from the 17th century in “Quicksilver,” Neal Stephenson’s brilliant novel, who says that even though he is a knowledgeable “natural philosopher,” or scientist, he has given up on understanding money. “If money is a science,” he states, “then it is a dark science, darker than Alchemy.”

I couldn’t agree more. My own 401(k) plan has already slipped so far that I might have invested more productively over the last few years by burning the cash for heat. Meanwhile, to hear the financial press and the cable channels describe it, everybody but me — especially in the financial industry — was getting rich.

Now we’re even.

There is, of course, an element of schadenfreude at play, but it’s not simply that I’m happy because others are sad. That’s sick; I would never rejoice at the suffering of my poor and middle-class countrymen who have fallen on hard times, or of the retirees looking at dwindling investments at the moment they need them most. True joy, my friends, is the feeling that comes from knowing that the right people are sad.

If you became obscenely rich riding this bubble, I’m taking pleasure in your fall. Of course, you are still undoubtedly richer than I will ever be. But it’s also clear that being rich means much more to you than it has ever meant to me, so I know you’re in pain. Which is good.

I’m not the only one who feels this way. I recently received a note from Dr. Michael Stone, a psychiatrist in Manhattan who is a professor of clinical psychiatry at Columbia University. “In America it’s every boy’s dream to one day become a millionaire,” he wrote, adding that the subprime mortgage craze and debacle have “made that dream come true for more people than we could ever have imagined before.” He continued: “Only yesterday, it seems, Maurice R. Greenberg, ex-C.E.O. of A.I.G., saw the value of his holdings in his former company change — in one day — from $15.8 billion to $911 million. Where else but in America can even a billionaire become a millionaire?”

The upside of this financial crisis, then, is that everybody and his uncle are beginning to investigate what went wrong. Some of them even have subpoena power. Delicious.

ANOTHER group that I don’t mind seeing break out in a sweat are the stock market analysts who claim that the news industry is dying because the corporate leaders were too stupid to meet the challenge of the Internet. Admittedly, I have a personal bias here. But guess what, guys? Change comes to every industry; it’s how you react over time that makes the difference.

The story of newspapers is undoubtedly grim. Now that many of the analysts’ own shops are being put in a blender, though, would it be unkind to point out that those at the helm of the newspapers didn’t play in the subprime securities market and thus drive their companies off a cliff? Hope you like dealing with change, baby!

Then there are the people whose judgment is so horrifyingly bad that those of us who have honed our sense of schadenfreude must stand back in awe, as if we have been presented with a kind of once-in-a-lifetime performance art. That artist, that visionary, is Gabriel Nathan Schwartz, a lawyer from Denver who had a bit of trouble in August at the Republican National Convention. Mr. Schwartz — no relation — seems to have met a nice lady at a bar during the convention and taken her back to his hotel room.

Here’s what happened next, according to The St. Paul Pioneer Press, in a report that reads like blank verse:

“Once there, the woman fixed the drinks and told him to get undressed.

“And that, the delegate to the Republican National Convention told police, was the last thing he remembered.”

According to the initial police report, when Mr. Schwartz, who is 29, woke up, he was $120,000 poorer. He had been relieved of a great deal of cash plus a $30,000 watch, a $20,000 ring, a $5,000 necklace and a belt worth $1,000. Prada.

In a statement he released once the story of his misadventure started making the rounds of the Internet, Mr. Schwartz said, “I used poor judgment.” A spokeswoman for Mr. Schwartz said that his losses actually amounted to $63,050, and that he has worked with the police to correct the misunderstanding.

In his statement, he said he was “joking around” when he proclaimed during an interview earlier in the convention that he wanted “less taxes and more war,” and that the United States should “bomb the hell” out of Iran.

I might not have the kind of money that gives me expertise in this area, and I don’t own any Prada. But I feel I know a thing or two about wealth. And let me tell you that anybody who wears a $30,000 watch can afford to lose $30,000. Prada goeth before a fall.

Still, let’s not be small about this. It’s easy to joke about a guy who gets himself into a mess, but Mr. Schwartz has ascended to the level of a metaphor. Look at it this way: perhaps he was actually visited by Fortuna, the goddess whose bailiwick includes the realm of investing.

The Romans saw Fortuna as the goddess of luck, but she was also the goddess of fate. Maybe she was giving Mr. Schwartz a preview of the economy to come. Maybe what she put in his drink was a little dose of irrational exuberance — the thought that meeting a woman in a bar and taking her back to a hotel room is a perfectly reasonable thing to do. What could possibly go wrong?

AS a nation, haven’t we been on a somewhat similar misadventure? The nation’s financial institutions smiled at the nice lady in the bar and invited her up to their collective hotel room, hoping for the best. And they got rolled. And, by extension, so did we.

The difference between Mr. Schwartz and the financial institutions is that he didn’t expect the government to bail him out.

The rest of us, clearly, just need to get too big to fail.