Obama and the Anxieties of the Financial Meritocracy

In the New Republic, Alec MacGillis has a brilliantly insightful article (behind a pay wall) about the growing hostility towards Obama of many former supporters among the wealthiest hedge fund managers in the country.

MacGillis describes what these guys liked about Obama during the 2008 campaign, and what they now despise–not too strong a word–about him. Back then, Obama seemed like almost a mirror image of themselves to the hedge fund crew: he was a meritocrat, like them. He didn’t come from “old money” and neither did most of them. He was president of the Harvard Law Review because he was genuinely, measurably brilliant–just like them. The test scores, the excellent schools, the demonstrated achievement proved it. Just a bunch of brilliant guy who manipulate money admiring another brilliant guy that some of them actually went to school with.

Then he started talking about raising their taxes, especially by ending the “carried interest” tax loophole, and he called them “fat cats” once, and they even claimed that they were worried about excess government debt. And so now most of them hate him, a crazy hate that, as MacGillis notes, doesn’t seem quite rational, given how mild most of Obama’s rhetoric and policies have been, and given that, as Obama himself has noted, a lot of voters think that he has been way too accommodating of financial sector. And they’re raising money hand over fist for Romney–even those of them who, famously, supported same sex marriage in New York. Now, as Barney Frank is quoted as saying in the article, they want to put in power the party that fanatically opposes gay rights.

MacGillis has a lot of astute explanations for all of this, some of them materialist, and some of them psychological. You should get your hands on the piece and consider all of them. But one that I found particularly arresting and convincing is that the very thing that helped Obama win their support originally–his intellectual/demographic similarity–now threatens them. Right, Obama might have been their classmate. Was their classmate in some cases (as he reminded some of them during a meeting in 2010). And that was the problem–Obama was asking them–in his cool Obama way, not in FDR’s almost maliciously naughty, “I welcome their hatred” way–to demonstrate some social solidarity, some noblesse oblige. And this pushed all the wrong buttons. As MacGillis writes, “That, in between his relatively measured lines about tax codes and financial reform, he was delivering an unmistakable moral judgment about the worth of the profession they had chosen. That the story they were telling themselves about their own lives was highly questionable.” Yes, they had chosen one life. And this guy they had played basketball with at Harvard had done just fine–he was president!–but he had chosen another life. He taught law, did community organizing, and didn’t dedicate himself to making a billion bucks per year or more (literally in the case of the top 40 or so hedge fund managers, something Obama also pointed out to them at the 2010 meeting). By liberal blogospheric lights, Obama isn’t enough of a lefty. But by the standards of his old hedge fund buddies, Obama enrages them because he shames them.

And it is interesting to compare this dynamic to what FDR confronted from the superrich of his presidency. Back then, old WASP wealth dominated the banking and financial industries. It wasn’t, for the most part, “earned” meritocratic wealth. And thus oddly enough, FDR, like Obama, knew these guys from the school–he was from the old money WASP aristocracy, too. He blew off his Harvard classes to go sailing–just like a lot of them must have. After all, they were going to stay rich, no matter what–they didn’t need to graduate Harvard with honors. FDR thought most rich people were, like himself prior to polio, fatuous, lazy toffs. The rich had never impressed him, he thought they were sort of lazy fools. But then, after he became governor and then president, his laughter became more cutting, and he realized he couldn’t let them smugly continue to destroy the country.

Today, the rich are very impressed with themselves based upon self-perceived merit, not their families of origin. And they thought that Obama, being a fellow meritocrat, would be impressed with them, too. They earned it–just like the president–so, surely, he would admire them, and would never call them fat cats (verbal criticisms stings these guys as much or more than policy proposals that affect their wallets). So, yeah, they thought Obama was like them–and he is, sort of, that’s the funny thing–and now they’re mad he called them out in the pretty minimal way he did. What the hedge funders don’t seem to realize is that, while Obama doesn’t respect them all that much, he respects their meritocratic achievement–and, therefore, his own–just enough not to have the full throated, glib contempt for them that FDR had for his wealthy peer group.

If you think you worked hard and plus have a superior intellect that all the good schools and all the good grades and test score ratify, then you’re going to be, at least, minimally empathetic, to those who took a different path than you did after Columbia and Harvard. Obama gets these guys, finds them wanting, but, ultimately, like he does with almost everyone from John Boehner to Bibi Netanyahu– understands and contextualizes them. It’s his great strength and his great weakness all rolled into one.

On the other hand, if you think you’re just a lucky sob born into money and you’re not a particularly analytical type to begin with–and, then, you’re humanized by a crippling disease, and a empathetic spouse—you’re going to think your peers are just lucky sob’s born into money, too. So you’re not going to be very kind to your old Harvard classmates. You’re going to view them, at best, instrumentally, and, at worst, as everything that’s wrong about America.

Leon Cooperman and the rest of these hedge fund guys should thank God they were born when they were, and that they can comfort themselves with their meritocratic badges of honor. This president at least understands them, and, yes, he’s not all that impressed, but he sees their are reasons why the are the way they are. But it could have been much worse. They could have gotten FDR, remembering what lazy bozos they all were during their college days. He would have just laughed in their faces–at least, Obama’s never done that.


Alec MacGillis sends along a pass-thru link to his terrific article: