David Brooks, Reluctant Tea Partier
I know we're all supposed to have complicated, negative feelings about David Brooks in the NYTimes. Personally, I don't, because I don't read the NYTimes -- except for Wednesday's food section -- and never the editorial page. My life is much richer since I made that a rule.
On the other hand, I'm a huge fan of his books -- Bobos in Paradise, especially -- and when he writes about more abstract social and economic patterns, I'm there. In today's NYTimes (which I never read) he writes about two kinds of businessmen: the Princes and the Grinds. Of Princes, he says:
They are almost always charming, smart and impressive. They’ve read interesting books. They’ve got well-rehearsed takes on the global situation. They can drop impressive names as they tell you about their visits to the White House, Moscow or Beijing. If you’re having lunch or dinner with a prince, you’re going to have a good time.
Grinds, on the other hand, tend to have started their own company or their own hedge fund. They’re often too awkward to work in a large organization and too intense to work for anybody but themselves.
And he makes this important point, which seems to touch a little bit (surprisingly, for David Brooks) some of that Tea Party-revolutionary vibe we've been talking about here:
Since the princes are nicer and more impressive, it is easy to be seduced into the belief that they also are more trustworthy. This is false. During the last few years, for example, the princes at Citigroup, Bear Stearns, Goldman Sachs and Lehman Brothers behaved with incredible stupidity while the hedge fund loners often behaved with impressive restraint....
In finance, as in other realms of business life, social polish doesn’t always go with capitalist success. Often it is the most narrow, intense, awkward people who start the best companies, employ the most people and create the most value.
Now for the class war part:
Sadly, this recovery has been great for princes and horrible for grinds. The people who work at the big corporations are critical of the Obama administration, but the fact is they are doing very well. The big companies are posting excellent earnings. They’re sitting on mountains of cash.
The aspiring grinds, meanwhile, are dead in the water. Small businesses are not growing. They are not hiring. They are struggling to stay alive.
Princes can thrive in a period of slow, steady growth, but grinds need a certain sort of psychological atmosphere. They need a wide-open economy with plenty of creative destruction. They need an atmosphere of general confidence, so bankers will feel secure enough to lend them money, so big companies will feel brave enough to acquire their start-ups, so they themselves will feel the time is ripe to take on their world and show their brilliance to all of humanity.
The princes can thrive while the government intervenes in the private sector. They’ve got the lobbyists and the connections. The grinds, needless to say, don’t.
Grinds vs. Princes. Main Street vs. Wall Street. Tea Partiers vs. Establishment Parties. Entrepreneurial Capitalism vs. Crony Capitalism.
Which side are you on?
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Jun '10
Re: David Brooks, Reluctant Tea Partier
No matter how high up the ladder you get, everything really is like high school, isn't it? :)
Jun '10
Re: David Brooks, Reluctant Tea Partier
We're not supposed to have princes in America. We're a republic, dammit. Ayn Rand had another name for this princely caste; she called them "looters." So David Brooks thinks I'm a "grind," eh? Well, I think Brooks is an elitist bastard. My hands are rough and I have dirt under my fingernails, but I can still pull the lever in a voting booth. Beware ye princes for I am legion!
Jul '10
Re: David Brooks, Reluctant Tea Partier
perfect! i wonder how far down the ladder it goes as well? Is it genetic? did the genetic code inherit that pattern from some other universal predecessor-principle of organization ?
Re: David Brooks, Reluctant Tea Partier
Brooks's main point is spot on, but overly simplistic. As with any binary classification scheme -- are you rich or poor? -- sometimes the critical question is, "When?" We are all actors on the stage of life, each playing his part, to paraphrase NJ Gov. Chris Christy's famous YouTube vid. I'm thinking of a physician I know, today a senior executive at a major medical company and one of Brooks's princes. But a few years back, before the big company purchased his start-up, he was a complete and utter grind. He's still the same person. However, it's amazing how regular hours, adequate funding and the absence of an all-consuming personal Prime Directive enhanced his capacity for sparkling conversation.
True grinds get tired of the prince routine after a while and usually find themselves easing back into the entrepreneurial maelstrom. Eventually. I'm willing to bet that most of today's "bi" execs -- using Brooks's taxonomy -- will be marking time as princes until at least 2013.
May '10
Re: David Brooks, Reluctant Tea Partier
Too pat, too simple, too easy. It's all good vs. evil. "There was that giant problem we failed to see but NOW we are omniscient and we have it all straight." It's the trap of columnist, pundits and Big-C-ontributors.
The business world is not filled with callow, selfish princes and noble grunts. It's filled with varied players all pursuing self-interest according to rules and incentives, too many of which are dictated by government.
You are starting a business Rob and I get how this narrative has appeal. I even get why it might be a savvy political trope and might lead to better outcomes if embraced. But this mess we're in... is not just a story about crony capitalism. And two parties vying to see who can benefit most from populist rage is just a bad development.
Re: David Brooks, Reluctant Tea Partier
Maybe, George, but I don't think Goldman Sachs, GE, and the like are filled with entrepreneurial spirits yearning to break free. When Jon Corzine got rich -- or Bob Rubin, or Erskine Bowles or John Edwards -- they didn't suddenly catch start-up fever. They joined another system and rose to the top. (And back down, in Edwards' case.) Joining a system means fitting in, being smooth when called upon, learning how to work it.
To paraphrase Bill Buckley, I'd rather have economic and tax policy set by small businessmen and entrepreneurs than the entire brain trust of Wall Street, as it is now.
May '10
Re: David Brooks, Reluctant Tea Partier
Still don't agree with the "black is white, up is down" simplicity here -- but like I said before -- if the politics lead to the right outcome -- and this quote is certainly that -- then bring on the class warfare! Down with the princes! Torch Nantucket! String 'em up by their Vineyard Vine ties! Tar and feather anyone with bespoke shoes!
Re: David Brooks, Reluctant Tea Partier
Trace Urdan:
The business world is not filled with callow, selfish princes and noble grunts. It's filled with varied players all pursuing self-interest according to rules and incentives, too many of which are dictated by government.. But this mess we're in... is not just a story about crony capitalism.
Of course it's not "just" a story about crony capitalism. But that's a big part of it. And by "crony" I mean the very stuff that's usually celebrated by the orthodox, NYTimesy, "moderate" crowd -- public/private partnerships. Take Fannie Mae and Freddie Mac -- and they are a big reason why we're in this "mess" -- by gobbling up sub-prime mortgages, which they did in "partnership" with Princes and sub-prime lenders, backstopped by the unlimited credit and resources of the American taxpayer, they created a massive debt bomb that's still exploding. On the Grinds.
True, it's simplistic and easy. And it's not a question of good vs. evil, ultimately. (Although the Obama DoJ is investigating everyone -- except Barney Frank and the Fannie/Freddie crooks...) But you've got to start somewhere, right? Paint a bold line, then start the argument.
Re: David Brooks, Reluctant Tea Partier
Well, let's not get too hasty, here. I mean, um, ahem, it's just that....well, some of us are in the media, see, and we can be useful to you guys after the revolution in, you know, spreading awareness and what not. No need to go after us. It's the Wall Street fat cats you want! Hey, put down that torch! Hey, ouch! That pitchfork hurts. I'm on your side, fellas, honest!
Re: David Brooks, Reluctant Tea Partier
It is? A bad development? Permit me to acquaint you with the History of the United States of America, 1776 -- July 13th, 2010.
Re: David Brooks, Reluctant Tea Partier
"Princes" versus "grinds" is another way, I think, of getting at the distinction between business figures who devote their careers to managing the status quo, often ascending through big, established, corporations, versus those who engage in (to sound a little pompous at an early hour) Schumpeterian creative destruction, often founding firms of their own. One interesting wrinkle here: the astonishing speed with which (as Dr. Savage notes) grinds can turn into princes. My friend Peter Thiel made this point one day when I made the mistake of breezily referring to high tech companies such as Microsoft as entities that persistently unsettle the status quo. Peter replied that, having failed to introduce any important new technology in years, Microsoft was now, in effect, a marketing company, devoted to milking its operating system and Office suite for cash for as long as it could. "Microsoft is the status quo."
May '10
Re: David Brooks, Reluctant Tea Partier
I think that Rob is closer than Trace in this case- and I have been in both types of organizations (all three, actually- I've worked for the federal government as well) myself. The differentiator is actually a bit different. It isn't necessarily big vs. little or new vs. old, though there are elements of both. It is in many ways "people who make stuff" vs. "people who skim cream off the top while they shift around what other people make".
The Wall Street bigs are the original self-serving skimmers (especially next to an "angel investor"). Amazon and Apple (and Asus in Taiwan) create/produce things. Government is the ultimate skimmer. GE is sliding, under Immelt with his cronyism and carbon credit dreams, toward skim rather than create. Call Immelt a "moribund capitalist", compared with Welch.
Brooks is right in what he says. What he does not acknowledge is his own complicity- he loved and supported Obama, the ultimate prince, based on a hallway talk about Reinhold Niebuhr, and he disparages Palin, the anti-prince, because she has no interest in Niebuhr.
This column looks to me like a well-disguised, face-saving type of mea culpa.
May '10
Re: David Brooks, Reluctant Tea Partier
Microsoft is too easy Peter. Let's try a harder one. Google: prince or grind?
Re: David Brooks, Reluctant Tea Partier
Trace Urdan
Microsoft is too easy Peter. Let's try a harder one. Google: prince or grind? · Jul 13 at 10:30am
Brilliant question. Just brilliant. I'm making this a separate post right now. I'd love to have everyone chime in.
May '10
Re: David Brooks, Reluctant Tea Partier
But no investor, angel or otherwise invests with the idea that they might receive some profit-sharing down the road. They are looking for an exit. And whether the exit is sale to a larger set of investors, another company, or the public -- someone has to assist with that. I object heartily to this simplistic notion that unless you make a physical product (and I suppose that include TV shows ;-) you are a parasite.
I'll entertain your anti-Wall Street argument Duane -- but only if you base it on something other than throwing rocks at the rich guys. There is LOTS wrong with Wall Street -- but it does serve a useful and productive purpose. And as much as we like to romanticize guys tinkering in their garages -- that's really not the basis for a global economy.
May '10
Re: David Brooks, Reluctant Tea Partier
Trace Urdan
But no investor, angel or otherwise invests with the idea that they might receive some profit-sharing down the road. They are looking for an exit.
More power to the rich guys, Trace; may they get richer and richer, doing useful things. I am not a bitter populist- nor am I hostile to venture capital; risk-taking and successful exits are the heart of entrepreneurship. We need Wall Street- we just need to push them back to a place where market discipline applies to them again. And we need exit opportunities- the key is the ability to make a strategic decision to take the best exit, not necessarily the first.
I've been on both sides of this- I've been in a small company seeking and getting start-up capital (including my own savings as part of a PPM), and evaluated opportunities for initial investments for a fund.
There is a difference between the goal of building something and getting rich in the process, versus just getting rich as its own end by any means possible. A good example of the first is Jeff Bezos, or, smaller, Bob Naegele (Rollerblades). The second type is Andrew Fastow.
May '10
Re: David Brooks, Reluctant Tea Partier
I add that this: "guys tinkering in their garages -- that's really not the basis for a global economy" statement is dead wrong. It is about the only basis for a global economy- but sometimes it takes time. Try to short-cut the time that takes and you get Dennis Kozlowski rather than Henry Ford or Earl Bakken. It sometimes takes longer than the get-rich-quick short-cutters want it to. You can't heal an ACL repair in three months by quadrupling the rehabilitation work; the biochemistry of re-forming collagen won't cooperate.
I am sorry- entrepreneurship does not describe the Wall Street "too big to fail" crowd, which I am defining as those who just trade things back and forth with each other under overturned buckets. They are, at best, middling-risk marriage-brokers for large entities and government securities. The parasites on the system are those who gamble with other people's money and end up either very rich or obscenely rich, without ever having real skin in the game. And these corporatist princes- like Rubin or Jon Corzine cry "capitalism!" everywhere as they simultaneously destroy free markets sucking on the public teat.
Re: David Brooks, Reluctant Tea Partier
Most people's behavior responds to incentives -- consider East versus West Germany for my all time favorite example. The Wall Street princes were just as smarmy and self-important ten years ago, but I for one liked them a lot better when they were directing their cupidity at financing Silicon Valley start-ups. Then the government cut the legs out of that business with Sarbanes Oxley -- what to do? Well the Community Reinvestment Act-generated, Fannie/Freddie turbocharged, taxpayer guaranteed mortgages for people who can't afford them were still available. What could possibly go wrong?
Jul '10
Re: David Brooks, Reluctant Tea Partier
Just because someone is clever enough to make a dustinction, it does not follow that it is valid. In my estimation, David Brooks very much enjoys playing Baby Aristotle, tracing analytical distinctions in places where nobody else has thought of them. But take that too far and you end up with worthless duscussions like this. The very value-laden naming convention ("Princes"? Really?) gives the game away. He sets up the game to create a mythical category of people whom he can then lambaste, thereby winning more friends on the left and gaining plaudits for his original thinking. A clever guy - a Prince, if you will.
But this distinction is worthless. Some people and companies make and sell things. Other people and companies create the conditions that allow those things to be bought and sold. Both are essential, and both are full of hard-working folks trying to do right.
May '10
Re: David Brooks, Reluctant Tea Partier
I knew this was coming from you Duane. You misunderstand me. Guys tinkering in their garages are HUGELY important. But not by themselves. Not without the dream of becoming a larger entity and going public or selling to a larger entity. Not without the prospect of scaling, which requires capital. If it were ONLY guys tinkering in their garages the global economy would look like the Philippines.