Monday, May 24, 2010

Blinded by Delusion

We take our Ivy curtain as a norm here. Graduate from Harvard or if you must Yale or shudder from Williams, and you're in.

I had thought the silly and fairly dumb Bobby Travaglini was as arrogant as connected Bostonians get. I hadn't become aware of his Harvard alum brother, Michael. As showoff obstructionist city councilor and then senate president a few blocks away, Bobby put the duh in dumb. On a council with such blowhards as Jim Kelly and Dapper O'Neil, Bobby sat alone as the epitome of boastfulness without knowledge. Those other two clowns at least knew their constituents and the issues. Bobby just thumped his chest.

In 1994, relatively new mayor Tom Menino appointed the connected brother, Michael, as exec of the Boston Retirement System. The crimson grad was only four years out of Georgetown Law and an underling at a second-tier Boston firm. While brother Bobby moved into the senate, Michael used his connections wisely and well.

He switched to Putnam Investments and in 2004 became head of the commonwealth's Pension Reserves Investment Management (PRIM) board. He's the highest paid MA employee, making at least three times what the governor does at $400,000, plus bonuses.

So now is the time for libertarians and Randists to say, "Ah, he earned every dime. This is proof of his superiority and the efficiency of the free market."

Well, switch back to the real world to hear that he's carrying that pretense to its logical conclusion. Mikey is quitting next month. He wants millions, not hundreds of thousands. He'll head to Chicago to a big investment bank.

This is really not a tale of the connected getting handed treasurers and proclaiming how the deserve it all — by their superior wit, wisdom and work. Oh, yes it it.

Little Mike says that the poison pills the governor and legislature are asking him and his minions to swallow are simply too bitter. The proposals in the works would limit their salaries to the governor's ($143,000) and limit bonuses for years when the pension fund (in the nature of $40 billion) loses value, even relative to market performance.

In other w0rds. that theoretical free market is great...when it means unlimited income for him. It sucks when he has to perform for it.

Mega Mike put it this way to the Globe:
"Someone else can hang around for that, but it's not going to be Mike Travaglini," he said. "Most people will say, `Good riddance. If you want to make more money go do it in the private sector,' and that's what I'm going to do. But there's a real threat to not being able to recruit and retain competent people here."
We heard this from the incompetent boobs at the big investment banks that crushed our economy recently. They are undoubtedly the best and brightest. If they are not allowed multi-million dollar bonuses, regardless of investment outcomes, the system would suffer. These allegedly brilliant clods who make years of terrible market bets will be forced, forced I say, to leave. Then where will we hoi polloi be?

Résumé Does Not Equal Reality

The fact remains that in the centuries these aristocratic buffoons have pulled this crap, they have illustrated not their innate superiority but their marginal, highly over compensated, incompetence. Far, far too many average or inferior sorts are legacies at Ivy schools and their equivalents. Far, far too many of those are given jobs they really can't perform adequately. Sorry, pretenders, CV does not equal ability.

So Bobby's brother will leave because he can't make a half million or a million or two million a year. Lackaday.

He was in charge when those funds under his direction took nearly a 30% dive. It seems he got a reduced bonus rather than being ridden out of Beantown on a rail. Poor guy.

I say let every one of those pretenders slither away. We may not be able to replace the current friend-of-friend promotion system we use that serves us so badly quickly. However, the gross incompetence uncovered in our latest great recession has at least made the regulators aware that they can't buy into the fantasies of the self-delusional sorts.

Investment banks and fund performance are measurable. You may have a connected brother. You may be from a famous college. What have you done for us...or to us?

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