Tuesday, September 16, 2008

Change: Peering through Ancient Ivy

Barack Obama has received the message: "It's the economy, stupid!" In Golden, CO, earlier today, he reminded us what we "feel in our own lifes", how "the pain has trickled up", and that "it's time for change that makes a real difference" in our lives.

Somehow he ties John McCain to the Chapter 11 bankruptcy filing of Lehman Brothers, the failures of Fannie Mae and Freddie Mac, the difficulties facings other large U.S. investment banks, and the collapse of the nation's housing market.

"Old institutions cannot adequately oversee new practices. Old rules may not fit the roads where our economy is leading," he said. "This time – this election – is our chance to stand up and say: enough is enough!


He pointed out Sen. McCain's 26 years in Washington serving financial institutions instead the their customers. However, Obama shares a link to old institutions and old rules with 42 percent of Lehman Brothers senior management. They received "Lux et Veritas" behind the ivy shroud of Harvard, Yale, Brown, Dartmouth, Columbia, Princeton, Penn, and Cornell.

For fellow rednecks who own more guns than pairs of shoes, "Lux et Veritas" is the non-Pig Latin phrase for "Light and Truth".

The Yale Daily News published a story today detailing the worries of Yale graduates who may or have already lost their jobs with Lehman Brothers, Bear Stearns and Merrill Lynch, former "financial giants" and "popular destinations for Wall Street-bound Yalies." Current students who worked on Wall Street this year as summer analysts now face impossible odds of being hired. In the past, 80 percent were hired after graduation. Earlier this year before the bail-outs and failures, the rate had dropped to 40 percent.

"Retired Managing Director of JP Morgan Chase Tracy Williams ’79 said people had been talking about the precariousness of Lehman’s future as a “bulge bracket” — or top-tier — firm for a long time. There was a general belief on Wall Street, he said, that Lehman could weather the storm through resilient leadership and a pattern of overcoming past difficulties. That belief, though, is now being questions.

'Markets move too fast,” he said. “Faster than [Lehman could] put a plan in place.' ”

"Another senior who worked in sales and trading at the New York office said while he valued the opportunity with Lehman, he saw bankruptcy looming on the horizon as early as this summer. The senior asked to remain anonymous so he could discuss his internship.

'I wasn’t necessarily angry or frustrated because finance is a high risk, high reward job,' he said. 'People need to be cognizant of that.' ”

Harvard's president, Drew Gilpin Faust, addressed the topic of graduates discounting potential careers outside of the financial sector in her June 2008 commencement address. In a June 23, 2008, New York Times story, Dr. Faust said the first question of Harvard students she's met with is, "Why are so many of us going to Wall Street?"

Obama's first job after graduating from Columbia was working in a Manhattan "consulting house to multinational corporations." He wore a suit and tie, carried a briefcase, had a secretary, interviewed "Japanese financiers or German bond traders" and "felt pangs of guilt for my lack of resolve."


Like 10 of the last 26 treasury secretaries and the past three presidents, Obama is a graduate of the "Ancient Eight." It is something he shares with 43 percent of the chairmen of standing committees in the U.S. Senate.

Maybe getting out of the ivy is the change we need. Surely there are more diverse and experienced public servants to be plucked from graduates of at least 2,400 other four-year colleges and universities. Perhaps we should question the growing endowment and power gap between the alumni of eight exclusive, hoary institutions and the rest of us.

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