David Brooks Repeats Himself
By Arnold Kling
I thought that Why Our Elites Stink (I suspect Brooks winces at the headline the editors supplied)
these people are brats; they have no sense that they are guardians for an institution the world depends on; they have no consciousness of their larger social role.
was simply a precis of Bobos in Paradise. So I went back to my own review essay of his book.
Brooks comes across to me as an elitist. His message to Bobos seems to me, “You are an elite, even though you refuse to recognize it. This carries with it responsibility. You ought to become more engaged over big social issues.”
In fact, one could make a case that one of the problems with Bobos is that they are arrogant and isolated from mainstream America. In that case, urging them to seize the elitist mantle seems like an unwise course.
I don’t want to give today’s elites a sense of stewardship. The Obama Administration has enough of that already. Take Steven Chu, for instance.
What I want to give today’s elites is an awareness of their own cognitive limitations. Brooks’ problem with modern elites is that they are not sufficiently aware of their responsibility–they lack noblesse oblige. My problem is that they are not sufficiently aware of their ignorance–they lack a sense of self doubt.
Yes, the financial managers sometimes show a lack of sense of responsibility. Take Jon Corzine, for instance.
But a sense of responsibility is not a sufficient condition for good financial management. A sense of responsibility is of no help if you have an inflated sense of your ability to manage risk. That is what afflicted bankers and regulators during the run-up to the financial crisis. I think that Enron is perhaps the most interesting example to think about in this context. One view is that it was all a hoax to begin with. I suspect that this was not the case.
My view is that the top executives at Enron were convinced that they had found a new way to make money, even though what they had discovered was yet another strategy for writing out-of-the-money options (in some sense, the fancy off-balance sheet entities were a way to have Enron write out-of-the-money options on its stock). Then, things began to go sour. At that point, dishonesty set in. Perhaps some executives understood what was happening and deliberately tried to cover up the problems. Others (most likely including Ken Lay) did not really understand why the firm’s finances were unraveling. This latter group became “honest liars,” so to speak.
One of the things I most appreciated about Leland Brendsel, who was chairman of Freddie Mac in the days when the firm avoided high-risk lending, is that he always worried that he might not know enough about how the company was making its money. He did not operate under the assumption that profits reflected his personal brilliance. That is what I like to see. I will take personal humility over a sense of noblesse oblige any day.