'Predators' Ball' redux: Drexel honors corporate sharks Icahn and Milken
Robert Zaller
Issue date: 9/26/08 Section: Ed-Op
Icahn was a lone wolf, but he found a natural ally in Drexel Burnham Lambert, a securities firm that specialized in junk bonds. The king of this particular hill was Michael Milken. By selling bonds in these dicey investments - the '80s equivalent of subprime loan packages today - Milken acquired immense capital resources (as well as a personal fortune of a billion dollars), which he then put at the disposal of a stable of corporate raiders. Icahn was the prize stallion. According to an arbitrageur who worked closely with both men, "Carl and Mike [had] a very good relationship." No wonder there.
Of course, it all came apart: Drexel Burnham Lambert went belly-up by the end of the decade, and the first of our great taxpayer bailouts was deployed to re-inflate that great Nervous Nellie, the market. Milken, after a stint in prison and a bout with cancer, restructured himself, so to speak, as a philanthropist. Icahn, bless him, is still happily at his old trade, as his recent tussle with Yahoo reminds us.
My question is, what are these two doing at a university commencement? Might as well invite Al Capone to lecture on jurisprudence, or Jack the Ripper to demonstrate surgery.
This isn't just a matter, though, of jaw-droppingly bad judgment. University schools of business and economics have led the way to the current Gilded Age; Michael Milken got his M.B.A. from Wharton, and of course the University of Chicago foisted Reaganomics and its unlovely successors on us. I have always thought that the terms "business" and "education" were an oxymoron, at least as I understand the latter term. Now it turns out that what business schools seem to have been teaching, or at any rate licensing, was stupidity, for there is no other term to describe the behavior of our largest banking, brokerage and insurance houses over the past two to three decades. What is it that makes smart men - let's not kid ourselves, Carl Icahn and Michael Milken are as whip-smart as they come - so stupid? It's the more active of the seven deadly sins, greed, arrogance and the pride that goeth before a fall. It's a berserk gamesmanship that reduces people to pawns and all human value to the common denominator of loot.
Once again, as we face the biggest financial crisis in 80 years, we wait for the wizards to rescue us. But capitalism is a greased pig. Grab it by the snout, take it by the tail, it will find a way to slither away. Regulators won't hold it, nor will Sunday preachers, nor will college professors. It has too much of the devil in it, and far too much of human nature. I'm not sure, personally, how much more of human nature humanity can take, not to mention the planet we are so busy befouling and despoiling. We need to fix ourselves before we are going to get a handle on any system.
For starters, we could invite Karl Marx to be next year's commencement speaker.
Robert Zaller is a professor of history. He can be reached at op-ed@thetriangle.org.
Of course, it all came apart: Drexel Burnham Lambert went belly-up by the end of the decade, and the first of our great taxpayer bailouts was deployed to re-inflate that great Nervous Nellie, the market. Milken, after a stint in prison and a bout with cancer, restructured himself, so to speak, as a philanthropist. Icahn, bless him, is still happily at his old trade, as his recent tussle with Yahoo reminds us.
My question is, what are these two doing at a university commencement? Might as well invite Al Capone to lecture on jurisprudence, or Jack the Ripper to demonstrate surgery.
This isn't just a matter, though, of jaw-droppingly bad judgment. University schools of business and economics have led the way to the current Gilded Age; Michael Milken got his M.B.A. from Wharton, and of course the University of Chicago foisted Reaganomics and its unlovely successors on us. I have always thought that the terms "business" and "education" were an oxymoron, at least as I understand the latter term. Now it turns out that what business schools seem to have been teaching, or at any rate licensing, was stupidity, for there is no other term to describe the behavior of our largest banking, brokerage and insurance houses over the past two to three decades. What is it that makes smart men - let's not kid ourselves, Carl Icahn and Michael Milken are as whip-smart as they come - so stupid? It's the more active of the seven deadly sins, greed, arrogance and the pride that goeth before a fall. It's a berserk gamesmanship that reduces people to pawns and all human value to the common denominator of loot.
Once again, as we face the biggest financial crisis in 80 years, we wait for the wizards to rescue us. But capitalism is a greased pig. Grab it by the snout, take it by the tail, it will find a way to slither away. Regulators won't hold it, nor will Sunday preachers, nor will college professors. It has too much of the devil in it, and far too much of human nature. I'm not sure, personally, how much more of human nature humanity can take, not to mention the planet we are so busy befouling and despoiling. We need to fix ourselves before we are going to get a handle on any system.
For starters, we could invite Karl Marx to be next year's commencement speaker.
Robert Zaller is a professor of history. He can be reached at op-ed@thetriangle.org.
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