Ferrari worth a Fortune in Fables

When they announced the winning bid for the Ferrari — $38.1 million — the crowd at the Bonham's auction in Monterey, California, cheered the record price.

Sold was a rare, curvaceous, powerful, red 1962 240 GTO Berlinetta.

Bottom line, it is no more than a collection of metal parts. This one had been crashed and rebuilt. Here in Oregon its title wouldn’t be considered “clear.”

My first reaction to the fall of the auctioneer’s gavel was to ask: what might $38.1 million buy besides this?

Scholarships for the talented and gifted poor.

Retirement of student debt.

Care for the sick (think ebola in West Africa).

Wells and water for thirsty, drought-stricken villages.

Homes for the homeless.

The list is endless.

But somewhere, someone with $38.1 million in loose change decided in his wisdom that highest and best use in this troubled world was ownership of this car.

Not surprisingly, the possessor of this “pride of ownership” was not revealed. Somebody knows what hubris is.

No, I did not cheer the sale. I wondered why others would.

We are told that shock turns to anger, then grief, then acceptance.

Now, five days after the sale, I have arrived at “creative therapy.”

The sale of the Ferrari stretches the imagination.

For one thing, $38.1 million is no longer locked up in some bank account. The Ferrari had freed it. The money could go to work.

But doing what?

Who got the check? And what would that person (or persons) do with the money? After all, the the car had been owned by one family for 49 years, from 1965 to 2014. Why did they sell it? Boredom? They got tired of red? They were in the red?

I began to imagine scenarios. Some uplifting, some ironic, some funny, some even more outrageous than the sale itself.

Here are a few:

What does one do with a car like this? Where can one go and not be A, envied, B despised or C shunned? At Walmart they gawk. At the Ritz, they see uncouth ostentation.

What does one say to: “Hey Dad, can I take the Ferrari tonight?”

What does one say to the dying, emaciated ebola patient who is told the news in his crowded death tent in Liberia?

What happens when the owner is “outed”?

Call a press conference? Hire a PR firm? Subject oneself to questions about the homeless, the starving, the thirsty? About those forced to travel on foot, in the heat, without shoes or superchargers?

Auditioned response: “I’ll have to get back to you on that one….”

Too dangerous to park in public. Hire motorcycle escorts and body guards. How about trucking the beast for safety’s sake? After all, Mercedes make really nice trucks. You can even sleep in them. Try that in the GTO.

The shrewd seller, with $38.1 mil in his pocket might use the money to buy, oh 38 new Ferraris at a million a crack and watch them appreciate.

Maybe the buyer is trying to impress a certain someone. Good luck with that. Stay clear of certain someones impressed by a $38.1 million Ferrari. Then again perhaps Ferrari-infatuated couples deserve each other. But wait, who gets to drive the Berlinetta? A stablemate is needed. The Rolls will no longer do.

Suddenly you need another Ferrari.

There’s this guy I know who just bought 38 of them….There’s an auction house crowd eager to cheer as you bid up the price.

Aesop wrote fables. Why not Ferrari?

Greed: The word they dare not speak

As the House takes up the debate about extending tax cuts for the very rich, our elected representatives shouldn’t shy away from the word “greed.” It is central to the debate.

And yet as they stand to speak, they are unlikely to ever use the word. To do so, they may conclude, may be seen as unseemly moralizing. Moreover, talk of greed intrudes on individual rights, the holy of holies.

Further, for elected politicians to raise the question of greed might seem hypocritical. The greedy are the very people who elected them to public office. Massive political donations come from the very wealthy and their political arms. Secret political contributions ensure that political discourse never addresses the question of greed.

Greed is off the table.

It shouldn’t be.

We must free the word “greed” of its moral connotations and look it square in the face as a pathology. Only then can we examine what it is and does. Try treating the word as you would “cancer” or, better yet, “drug addiction.”

Greed, shorn of questions about its morality, is clearly the driver of the vast inequities in our society. It is what compels the susceptible to accumulate vast sums of money they clearly desperately want but, just as clearly, don’t need. And all this is happening at a time when the wealthy live in a society of dire, real needs that their hoarded money could address.

I won’t review the statistics on inequality here. They are well known and documented. Just search “inequality” on your computer. You will not come up wanting.

This is not about numbers. It is about resources wasted on a all-consuming, destructive addiction.

Sure, this can be seen as a moral issue, but arguing about morality narrows the debate to individual moral choices. “Look, if that guy wants to pay himself $15 million a year, that’s his right.” “She deserves that kind of reward.” “It’s a question of what the market will bear.” “Greed is in the eye of the beholder.”

You aren’t going to shame the greedy to change their behavior any more than you are going to shame an addict out of his or her addiction.

To couch the debate in appeals to individual rights misses the point: Greed is a disease that infects and destroys the entire society.

The debate the House of Representatives should have over extending or ending the tax cuts for the wealthy must expose greed as bad for America. It’s a drug. It’s like tobacco or alcohol. It destroys not just the person afflicted with the addiction (in this case some obvious symptoms are obsession, denial, secrecy, need for more, and elitist isolation). Greed damages through “second-hand smoke” those who are nearby. The children of the wealthy become addicted to greed too. With rare exceptions, they display the same symptoms.

The damage caused by greed spreads to the society as a whole. We pay the costs of someone else’s greed, just as our health insurance rates go up to pay for the disproportionate health costs associated with smoking or other addictions.

How so? We live in a society whose health is dependent on rational, open civil discourse. Without it, democracy dies. If we elect our leaders (who set our priorities and create our laws) based on expensive, evocative, emotional, irrational appeals, the foundations of democracy wanes and we are left with a government ruled by those who control and manipulate mass communication.

That control belongs to the very rich, and their goal is to support and protect their habit of greed.

Moreover, the money spent to support their habits and hoarding, is money not spent on the very real problems of our society. Greed’s damage spreads to the larger society. For millions in true need, it slams shut the doors to health, education and opportunity. For a growing number, it denies them food and shelter.

Of course in a democracy we turn to our elected representatives to address those problems, but, as we’ve seen, those representatives aren’t answering to us.

Most elected representatives have been put in office by the greedy, for the greedy.

(A reminder: When I use the word “greedy,” I’m not making a moral judgment. I’m describing a pathology.)

And so our mounting social problems go unaddressed, and society enters a kind of death spiral as the rich get richer and everyone else gets poorer. The failure to see greed as the source of our problem is part of the same self-destructive, avoidance behavior that began with those individuals originally addicted to greed.

This is the state of our nation as the House debate begins. Greed should be front and center in the debate. The issue is ultimately about the social and political health of America.

Top Hedge Hogs of 2008

Holy Madoff with it! Today's New York Times “Business Day” section showed the mug shots of the eight "top" hedge fund managers ranked by what they “made” in 2008.

For an accounting of their nine- and ten-digit "takes," go here. For an account of what they don't pay in taxes, go here.

The numbers, of course, boggle the mind. James Simons leads the list with $2.8 billion. That’s with a “b,” and if you write it out, it looks like this:

$2,800,000,000.

To put Mr. Simons' annual compensation in perspective, $2.8 billion is 56,000 times a salary of $50,000.

Think of it — one person whose compensation is that of 56,000 fellow human beings earning $50,000 each.

The $11.6 billion earned in 2008 by the top 25 hedgers is substantially more than the State of Oregon’s annual $7 billion general fund. What this coterie of cash churners paid themselves last year is nearly quadruple Oregon's annual contribution to all its K-12 schools.

Then there is the question of whether any of the top 25 actually did anything to “earn” their largess besides gamble with other people’s money.

Compare their real contribution and productivity to that of the worker who patches pavement, picks lettuce, teaches school, waits on tables, checks out groceries, manages a store, shingles roofs, nurses the ailing, polices the streets and repairs the plumbing.

I have a friend and former student who actually writes for a hedge fund newsletter. I invite him to enlighten me by responding to the following observation: By comparison to most American workers, hedge fund managers contribute zilch and should be paid accordingly.

UPDATE: Chris Clair, who is referred to in the above paragraph, works for the industry newsletter Hedge World. Chris has passed on a three-part response to this post. The first, with links to the second, starts HERE. The third part will be posted later Friday, April 3.

Joys amidst concerns

Out of silent worship, Quakers often share “joys and concerns.” Someone might cite a birth or reconciliation as a “joy”; another might speak of an illness or dispute as a “concern.”

These days, of course, we’ve focused a lot on concerns that have come with this deepening economic crisis: unemployment, foreclosures, bankruptcies, homelessness, stress, etc. When those are applied to individuals, families or businesses they grow to personal tragedies.

But oddly, we are seeing some unexpected joys as well.

Here are four:

• Discovery of what’s important. In short, friends, family and community. Charity and simple kindness mean so much. Taking the time to listen, to be together. Celebrating nature. Breatheing. The best things really are free.

• The decline of consumerism. We have way too much stuff. We are not what we have but who we are. Advertising seems all the more deceitful and absurd in these times. We see and find joy in simplicity. Tight budgets make distinguishing between needs and wants so much easier.

• "Swamps" are being drained. I think particularly of a corrupt financial system, executive greed and an ethos that chooses short-term rewards and riches at the expense of the environment and the planet.

• We have the opportunity to start anew. When we rebuild, we will do it much more holistically, much more environmentally and even more compassionately. This crisis is re-educating us — refining and redefining our values.