JUNK - Lincoln Center Theater Review by Lincoln Center Theater

Fall 2017 Issue No.70

JUNK

Lincoln Center Theater Review A publication of Lincoln Center Theater Fall 2017, Issue Number 70 Alexis Gargagliano, Editor John Guare, Anne Cattaneo, Executive Editors Strick&Williams, Design David Leopold, Picture Editor Carol Anderson, Copy Editor The Vivian Beaumont Theater, Inc., Board of Directors Eric M. Mindich, Chairman Kewsong Lee, President Marlene Hess, Leonard Tow, and wWilliam D. Zabel, Vice Chairmen Jonathan Z. Cohen, Chairman, Executive Committee Jane Lisman Katz, Treasurer John W. Rowe, Secretary André Bishop Producing Artistic Director Annette Tapert Allen Allison M. Blinken James-Keith Brown H. Rodgin Cohen Ida Cole Ide Dangoor David DiDomenico Shari Eberts Curtland E. Fields Dr. Henry Louis Gates, Jr. Cathy Barancik Graham David J. Greenwald J. Tomilson Hill, Chairman Emeritus Judith Hiltz Linda LeRoy Janklow, Chairman Emeritus Raymond Joabar

Eric Kuhn Betsy Kenny Lack Memrie M. Lewis Ninah Lynne Phyllis Mailman Ellen R. Marram John Morning Brooke Garber Neidich Elyse Newhouse Augustus K. Oliver Robert Pohly Stephanie Shuman David F. Solomon Tracey Travis David Warren Robert G. Wilmers Kenneth L. Wyse Caryn Zucker

John B. Beinecke, Chairman Emeritus, Mrs. Leonard Block, John S. Chalsty, Constance L. Clapp, Ellen Katz, Victor H. Palmieri, Elihu Rose, Daryl Roth, Lowell M. Schulman Honorary Trustees Hon. John V. Lindsay Founding Chairman

Financialized by Michael Thomas

The Importance of Being Jewish by Malcolm Gladwell

Victims of Our Own Success An Interview with Ayad Akhtar

The Collectibles of the Magi by Chris Bachelder

Money by Dana Gioia

Money Talks An Interview with Anonymous

Enough Is Enough by Amanda Steinberg

Bernard Gersten Founding Executive Producer The Rosenthal Family Foundation—Jamie Rosenthal Wolf, David Wolf, Rick Rosenthal, and Nancy Stephens, Directors—is the Lincoln Center Theater Review’s founding and sustaining donor. Our deepest appreciation for the support provided to the Lincoln Center Theater Review by the Christopher Lightfoot Walker Literary Fund at Lincoln Center Theater.

Cover art: John A. Parks. Detail of Stock Exchange, 2015. Courtesy Thomas Jaeckel Gallery. Photograph, top of page: Barbara Alper/Archive Photos/Getty Images.

Poster by Seth Tobocman. Courtesy of the artist.

TO SUBSCRIBE to the magazine, please go to the Lincoln Center Theater Review website—lctreview.org.

Desire. Ambition. Failure. Triumph. Ayad Akhtar’s new play, Junk, examines the rewards and the human cost of making money. The author of the novel American Dervish and the plays Disgraced, which opened in New York City at LCT3 and went on to win the 2013 Pulitzer Prize for Drama, and The Invisible Hand, Akhtar explores issues of identity, belonging, and cultural values—both moral and material. His work thrums with humanity, and now, in his newest play, turning his attention to recent history, he offers a unique look at how the finance industry drives our world and also reflects fundamental elements of human nature. In this edition of the Lincoln Center Theater Review, Akhtar spoke with our editors about spirituality, capitalism, and what power looks like in the world today. The issue also features a poem about money by Dana Gioia, the poet and former chairman of the National Endowment for the Arts, and a look at the financial world of the 1980s by the veteran reporter Michael Thomas. Chris Bachelder has richly imagined a sequel to O. Henry’s short story “The Gift of the Magi.” A playful piece by Amanda Steinberg, the CEO of DailyWorth, questions how much money is really enough in our world. An excerpt from Malcolm Gladwell’s celebrated book Outliers helps explain the rise of the hostile-takeover business and the role it played in placing Jewish lawyers at the top of a financial world from which they had largely been excluded. An anonymous billionaire talked with us about the psychology of working on Wall Street, Michael Milken, and the pleasure of winning. These rich and varied articles capture the complexity and significance of money and its effect on our lives, then and now. —Alexis Gargagliano

junk bond jə NGk ˌbänd Noun A high-yield, high-risk security. Bonds are a type of debt. They are loans, where you, the investor, serve as the bank. You lend your money to a company, a city, or a government and it agrees to pay you back the money you have loaned in the form of regular interest payments. A government may sell bonds to raise money for an infrastructure project or to fund debt. A company may sell bonds to raise money to expand its operations or to take over another company. The most secure bonds are Treasuries, which are issued by the U.S. government and are deemed virtually risk-free. A Treasury bond will pay a lower yield than a bond issued by an established (investment grade) company and the bonds of an established company will pay lower a yield than a bond issued by Crooked Carl’s Crocodile Farm, for instance, or in this play, Izzy Peterman’s company, Saratoga-McDaniels. In Junk, Robert Merkin is the financier—or financial advisor—underwriting the bonds that Peterman’s company is issuing in order to take over Everson Steel and

United. He has a stable of investors willing to lend Peterman the money in the form of bonds and receive in return an attractive rate of interest. Conservative investors are often drawn to the safety of bonds instead of stocks. That doesn’t mean that bonds are free of risk. If the risk factor is high, the bond will pay a higher yield, or interest rate. So you stand to make more money, but you are at greater risk of losing that money as well. That’s why the riskiest issuers—fledgling companies or unstable foreign governments—offer what are called high-yield or “junk” bonds, which carry a credit rating of BB or lower by Standard & Poor’s Index, or Ba or below by Moody’s Investors Service. They are called “junk” because they are more likely to default and end up worthless.

Bettmann/Getty Images

FINANCI ALIZED m i c ha e l t ho ma s

When John Guare asked me to contribute some reflections and recollections on the financial upheavals of the 1980s, I followed my usual practice of mulling over the matter, checking a number of names and dates, and getting the material straight in my head before actually touching the keyboard. Then, just as I was ready to sit down and write, an unusual bit of serendipity intervened. I was notified by my landlord that my wife and I would have to relocate to another of his properties. All very amicable, mind you, but involving a fierce winnowing of books and papers, in the course of which I came across an essay on Wall Street that I had written in 1985 for Esquire. 4

I had forgotten that I’d ever written the article. Rereading it, I found it useful, even revelatory, in the sense of comparing what I saw and thought then with how—looking back—I see the 1980s now: what they were, what really mattered, where they’ve led. Here’s some of what I wrote thirty-two years ago: Until about ten years ago, [Wall] Street’s business was still split up and parceled out by its principal competitors as a compact among gentlemen, some real, some would-be. There were as many unspoken rules in force as there were stipulations and regulations set down

in cold type by the powers that were on The Street and in Washington. As seems true of much of American life, the way things were on Wall Street in, say, 1970 was on the whole more similar to what we know of 1870 than to 1980. Deals were still done on handshakes; firms were smaller; a bit of nineteenth-century archaism—a touch of wrought iron and mahogany—impressed the customers and distracted them from the fact that the yachts they had been promised were moored at their brokers’ docks. Available technologies were relatively primitive, and they enforced a pace more human in scale. Today (1985), after a decade that has had the evolutionary effect of a millennium, those ways seem remote, back in an age, perhaps golden, when Adam delved and Eve span. . . . The computer has made possible a variety, volume and velocity of transactions unimaginable with the machinery of the past. The calculator and slide rule I used twenty-five years ago were nothing more than fancy abaci, different only in degree from their Oriental ancestor. . . . The Street works now to machine time and machine habits. Machines need no sleep, hence the imminence of the twenty-four-hour marketplace, which promises . . . levels of profit that ten years ago would have seemed ridiculous. . . . It’s a nice marriage, this mating of the machines and The Street, and intellectually convenient too. Machines are neither moral nor, other than mathematically, judgmental. By reducing everything to pure numbers, they make the magic even more glittering, they speed up the proliferation of new and seductive forms of wagering. In the old days, there seemed to be something more to the game than simple win-lose. The New York Stock Exchange’s public-relations rallying cry, “Own Your Share of America!” hinted of higher verities: thrift, proprietorship, common cause. One saw behind the stock certificates, the shadowy forms of mills and factories, things being made, earth being mined, jobs and enterprise. It’s somehow different now. . . . In my working lifetime, Wall Street has essentially recapitalized commercial America from an equity-rich industrial capitalism owned by individuals into a highly leveraged investment game board dominated by fiduciary institutions and their brokers. . . . Clouds lower over the steelmaking valleys; assembly lines lie halted and silent; buzzards circle above the copper pits of the West; crowds gather by Iowa courthouses to watch the auctioning of family farms; on the Texas plains, stacked drilling rigs rust in the spring drizzle. And yet Wall Street goes from strength to strength. . . . I go to Wall Street very seldom now. . . . Now and then I’ll walk by the eccentric building on William Street that housed my old firm for nearly a century. It’s an Italian bank now . . . . Tragic, I think, how awful (but) the sad thought lingers only for an instant, however. It was getting and spending then, and it’s getting and spending now. The name above the door doesn’t matter, since it’s more of the same. After all, this isn’t a neighborhood, this is Wall Street. No one lives here. Or perhaps everyone does, which comes to the same thing. Even though the words globalization and algorithm don’t appear in the article, I’m happy to say that, on the basis of what I wrote back in 1985, I didn’t miss what still seems to me what we might call “the main theme” of the 1980s: the Darwinian struggle, whose outcome would not be inarguably clear for another twenty years, between, let us say, the trading floor and the factory floor—between Wall Street and Main Street—

to ultimately determine who would get the lion’s share of the blessings of American capitalism. There’s no mystery about who came out on top. As I once put it elsewhere, “When the 1980s began, General Motors was selling cars with loans attached. A decade or so later, General Motors was selling loans with cars attached”—which is an oversimplified way of describing what happened. In the 1980s, Wall Street broke free of postwar inhibitions and, with flags flying and brass blaring, with Reagan acting as drum major, began its long march through the great institutions of the American political economy, converting it from “industrialized” to “financialized.” To revisit the 1980s with the intention of understanding how “financialization” came to pass, to develop a grasp of the key episodes and individuals who shaped the fray and its outcome, is rather like signing up for a battlefield tour of, say, Gettysburg or Waterloo. You start out knowing the outcome: who won, who lost. Then, as you follow your guide around the bloody ground, learning about the key skirmishes and combatants—was the S&L crisis equivalent to La Haye Sainte or Devil’s Den; was Michael Milken the decade’s Napoleon or its Wellington?—you come to appreciate why the battle went the way it did. My own revisit of “Battlefield ’80s” has left me convinced that it was a decade so crammed with Wall Street malfeasance and federal idiocy, with one simply awful occurrence following on another and short-sightedness elevated to a fine art, with instance after instance of breaking faith, at least ethically, with the past, that it left many of us shell-shocked. Too blinded and deafened to sort out what was merely a fraud of the moment and what might have real and lasting consequences, intended or otherwise, for the future of this great republic and its people. With thirty years’ hindsight, that may be possible. A simple litany of 1980s events is pretty horrific. It takes away the mystery of how we’ve arrived at the miserable, amoral, unequal condition we find ourselves in today. To begin with, there was Milken and his web of junk-bond connections and catamites; there was the failure of Continental Illinois Bank, the fourth-largest in the country, brought to its knees by wild-eyed lending to the sort of Oklahoma bank that operates out of truck stops; there was the savings-andloan crisis, a debacle in which sharp operators and Uncle Sam engaged in a game of Regulatory Go Fish that ultimately cost taxpayers $150 billion and shuttered a third of the nation’s S&Ls. This was an episode that, to my thinking, proved the utility of the epistemological tool known as Hanlon’s razor: Don’t attribute to malice that which can just as easily be explained by stupidity. Speaking of which, it was during the 1980s that a business-school professor published a hugely influential paper asserting that the main, indeed the sole, responsibility of corporate management is to do what’s best for the stockholders. Screw the labor force, screw the community! A more toxic notion, with worse long-term effects on the industrial and commercial well-being of the country, I cannot think of. 5

In August 1987, the stock averages achieved a new all-time high. Just three months later, in October, on Black Monday, the markets experienced the worst one-day crash in their history. Men I knew to be hardened speculators or patient, unflappable long-term investors threw up their hands, shuddering, and declared the end of the world. Well, not quite, as it turned out: within two years, the game was afoot again. But Black Monday represented an ominous first: computers, not human beings, were calling the shots, mainly through a program called portfolio insurance. Given their capabilities, the machines had moved out of the back office and onto the trading desk. There would be no going back. But something else happened in 1987 that I think had more dire long-term consequences for our economy and the integrity of our systems than Black Monday: Ronald Reagan’s appointment of Alan Greenspan to chair the Federal Reserve Board. To put it bluntly, the 1987 crash was over and done with in a couple of years, but Greenspan’s ideology-driven miscalculations ruled the financial roost for almost three decades and linger still. You might say that his time at the Fed amounted to the Chernobyl of American capitalism. But, back then, who cared about Greenspan when there was so much else to captivate us? There were the insider-trading scandals, for one thing, with a marvelous cast: Dennis Levine, Ivan Boesky, the whole Den of Thieves crowd, even— ultimately—Michael Milken and Drexel Burnham. I was then writing a column for the now defunct magazine Manhattan Inc., and I commented that it seemed obvious that in postmodern capitalism “the scum rises to the top as readily as the cream.” Money lust overwhelmed institutional integrity in one sphere after another. Tradition and discretion went out the window as the partners of one venerable house after another took their firms public and chased after business that fifteen years earlier they would have spurned without a thought. Somewhere near the middle of the decade, it became known, and widely wondered at, that more than half of the graduating classes at elite colleges like Yale and Harvard, long thought—long proclaiming themselves—to stand for traditional values, were signing up for job interviews with the likes of Goldman Sachs. That, for me, was the clincher; it was clear that something had gone terribly, terribly wrong. Invocations of the 1929 crash and the Great Depression, which had acted as brakes to sheer greed when I worked on Wall Street (1961-75), all but ceased to be heard. Money, always a pugnacious participant in social and political discourse, now shouted down every other voice in the room. Which brings us to Junk. While one might sensibly argue that the real damage was being done elsewhere, it was hostile-takeover bids, pitting old-line companies with a strong community presence against arriviste financiers with unlimited access to high-risk credit, that got the ink and captured the public’s interest. No wonder the definitive history of the biggest of these deals—the 1988 takeover of RJR Nabisco by the private-equity buccaneers KKR—would be entitled Barbarians at the Gate. 6

Ayad Akhtar’s play is only the third important play to come out of a time that seems so rich in theatrical possibility. It joins two well-regarded plays that opened some thirty years ago: Caryl Churchill’s Serious Money (1987) and Jerry Sterner’s Other People’s Money (1989). Churchill, being English, concentrates her fire on the class angle, on “barrow boys” and “Essex men,” and, of course, on that all-purpose bogeywoman, Margaret Thatcher, whereas Sterner anticipates Akhtar in depicting what a Wall Street chum liked to characterize as “oldveau vs. nouveau”: Every man for himself, and damn tradition, damn history, damn the community! So much has happened since the 1980s that I look forward to seeing whether, after the crisis of 2007-08 and the associated bailout, the earlier decade packs the same wallop it had for those of us who were there to see it in stereo and living color. I suspect it will, especially for audiences who are curious about antecedents and linkages, and who try to learn from history. And I am fascinated to see what a later generation—Ayad Akhtar was a mere kid when these fun and games were being played—makes of the 1980s. That was some trip! After stints on the curatorial staff of the Metropolitan Museum of Art and on Wall Street, where he was an investment-banking partner of Lehman Brothers and Burnham & Company, Michael M. Thomas turned to writing in 1980. He is the author of nine published novels, the most recent of which is Fixers, published in 2016 by Melville House, and from 1987 to 2009 wrote “The Midas Watch,” a column that appeared weekly in the New York Observer.

THE IMPORTANCE OF BEING JEWISH An excerpt from “Outliers” b y ma l c ol m g la dwe l l The old-line Wall Street law firms had a very specific idea about what it was that they did. They were corporate lawyers. They represented the country’s largest and most prestigious companies, and “represented” meant they handled the taxes and the legal work behind the issuing of stocks and bonds and made sure their clients did not run afoul of federal regulators. They did not do litigation; that is, very few of them had a division dedicated to defending and filing lawsuits. As Paul Cravath, one of the founders of Cravath, Swaine and Moore, the very whitest of the white-shoe firms, once put it, the lawyer’s job was to settle disputes in the conference room, not in the courtroom. “Among my classmates at Harvard, the thing that bright young guys did was securities work or tax,” another white-shoe partner remembers. “Those were the distinguished fields. Litigation was for hams, not for serious people. Corporations just didn’t sue each other in those days.” What the old-line firms also did not do was involve themselves in hostile corporate takeovers. It’s hard to imagine today, when corporate raiders and private-equity firms are constantly swallowing up one company after another, but until the 1970s, it was considered scandalous for one company to buy another company without the target agreeing to be bought. Places like Mudge Rose and the other establishment firms on Wall Street would not touch those kinds of deals. . . . The work that “came in the door” to the generation of Jewish lawyers from the Bronx and Brooklyn in the 1950s and 1960s, then, was the work the white-shoe firms disdained: litigation and, more important, “proxy fights,” which were the legal maneuvers at the center of any hostile-takeover bid. An investor would take an interest in a company; he would denounce the management as incompetent and send letters to shareholders, trying to get them to give him their “proxy” so he could vote out the firms’ executives. And to run the proxy fight, the only lawyer the investor could get was someone like Joe Flom. The white-shoe law firms would call in Flom as well whenever some corporate raider made a run at one of their establishment clients. They wouldn’t touch the case. But they were happy to outsource it to Skadden, Arps. “Flom’s early specialty was proxy fights, and that was not what we did, just like we don’t do matrimonial work,” said Robert Rifkind, a longtime partner of Cravath, Swaine and Moore. “And therefore we purported not to know about it. I remember once we had an issue involving a

proxy fight, and one of my senior corporate partners said, Well, let’s get Joe in. And he came to a conference room, and we all sat around and described the problem and he told us what to do and he left. And I said, ‘We can do that too, you know.’ And the partner said, ‘No, no, no, you can’t. We’re not going to do that.’ It was just that we didn’t do it.” Then came the 1970s. The older aversion to lawsuits fell by the wayside. It became easier to borrow money. Federal regulations were relaxed. Markets became internationalized. Investors became more aggressive, and the result was a boom in the number and size of corporate takeovers. “In nineteen eighty, if you went to the Business Roundtable [the association of major American corporate executives] and took surveys about whether hostile takeovers should be allowed, two thirds would have said no,” Flom said. “Now, the vote would be almost unanimously yes.” Companies needed to be defended against losses from rivals. Hostile suitors needed to be beaten back. Investors who wanted to devour unwilling targets needed help with their legal strategy, and shareholders needed formal representation. The dollar figures involved were enormous. From the mid-1970s to the end of the 1980s, the amount of money involved in mergers and acquisitions every year on Wall Street increased 2,000 percent, peaking at almost a quarter of a trillion dollars. All of a sudden the things that the old-line law firms didn’t want to do—hostile takeovers and litigation—were the things that every law firm wanted to do. And who was the expert in these two suddenly critical areas of law? The once marginal, second-tier law firms started by the people who couldn’t get jobs at the downtown firms ten and fifteen years earlier. . . . For twenty years [Flom] perfected his craft at Skadden, Arps. Then the world changed and he was ready. He didn’t triumph over adversity. Instead, what started out as adversity ended up being an opportunity. “It’s not that those guys were smarter lawyers than anyone else,” Rifkind says. “It’s that they have a skill that they have been working on for years that was suddenly very valuable.” Malcolm Gladwell is the author of The Tipping Point, Blink, Outliers, What the Dog Saw, and David and Goliath. He has been named one of the 100 most influential people by TIME Magazine and one of Foreign Policy’s Top Global Thinkers. Gladwell, Malcolm. Outliers: The Story of Success. New York: Little, Brown and Co., 2008. Print. Excerpt reprinted with permission from the author.

Top: Â© Jean-Pierre Kris Graves, Laffont. The Producer, www.jplaffont.com. 2015. Courtesy Bottom: of Sasha Courtesy Wolf of Projects. the Johnstown Flood Museum Archives, Johnstown Area Heritage Association.

Aya d a k h tar

This summer our co-executive editor John Guare discussed capitalism, spirituality, and power with the playwright of Junk, Ayad Akhtar, whose work includes the Pulitzer Prize–winning play Disgraced and the novel American Dervish. John Guare: What sparked

your interest in this moment in American history? Ayad Akhtar: When I first moved to New York, in the mid-nineties, my dad—my parents are both very successful doctors—saw me reading way too much poetry and was concerned about my financial future. He made a deal with me: If you read the Wall Street Journal every day, I’ll pay your rent. And so I started to read the Wall Street Journal every day. I would go to the local library. Eventually, I got a subscription to Barron’s. Tina Brown had just taken over The New Yorker, you had profiles of Allen & Co. and financiers cheek by jowl with

profiles of Mikhail Baryshnikov. And it was the beginning of that bull run of the market. People at cocktail parties, openings, and book parties were all talking about their stock portfolios. Everybody seemed to be talking about money. JG: Did you invest in any small way? AA: I did. I think my dad wanted me to have skin in the game so I could feel the pain of losing money, and so that I would understand a little bit better what the real world was made of. I became quite interested in economics, and I quickly began to see how decisions on an individual and a collective basis were not made in accordance with things that I’d been taught in school. JG: What were the rules you had been taught that were being broken? AA: That somehow there was something like a public good. It became increasingly clear to me that most decisions were economic ones and that the decisions that people made more

often than not, unless they were quite wide-thinking, were short-term decisions. And so the so-called good of any number of things was really at the mercy of whatever the prevailing, usually narrow, economic ideology was. One of the other things that I began to understand was how coded political language was, and that political language was speaking in some superficial way to what we see as values, but at the end of the day, on a fundamental level, politics was really about money. I began to understand that the world was not moral or immoral but amoral. JG: But what you’re talking about could just as easily be the subject of a financial diatribe or an essay. How did you find the humanity in it? AA: Well, my long-standing interest in issues of our economic life began to take on dramatic roots in so many different ways. A very early idea that I had was to put capitalism on trial, 9

which resulted in The Invisible Hand, a play that was done at New York Theatre Workshop. Then I read a story about the CEO of VW, who committed suicide after there was a hostile takeover of his company—that made the human stakes palpable. In a sense, Junk was born then. There was also something about the scope of a history play, a play about kingship, if you will, with CEOs or capitalist magnates as kings and the adviser class—the legal adviser class and investment-banking adviser class underneath that. I didn’t go to business school, but I had a deep familiarity with the kind of iconic histories that operate as myth within the business world, like the RJR Nabisco deal and the Revlon deal and the titanic figures from that era. I started to realize that the play I wanted to write was a battle. It was going to be a war play, and that meant

because all I know about you is money, money, money. AA: One of my long-standing preoccupations has been the nexus of psychoanalysis, religion, and spirituality. I have probably spent more time thinking about that than about money. It’s just finding the way to write about it. One of the major prevailing questions for anybody who’s interested in spirituality is: Why is the world constructed the way it is? It makes no sense. My absolute dumbfoundedness was transformed by my father’s charge into a kind of avid curiosity about the structure of the world. And so my interest in writing about money comes from a deep spiritual interest in understanding why the world is the way it is. JG : Do you think there’s ever been a time when it has worked? When that dichotomy, that incredible battle be-

so many people think that a successful businessman, if he is successful, has all the answers and can run everything. Is that a belief that’s rooted deep in the American psyche? AA: I think that the making of money, the accumulation of wealth, is the expression par excellence of personal will in American life. And I think that the great trouble of our political life as a nation—the great obstacle—is that we all, no matter our condition, aspire to the kind of agency that only the wealthy have. People often talk about what Oprah thinks or what Bill Gates thinks. I’m not sure that I believe either Oprah or Bill Gates has the attainment, in any deeply humanist or spiritual or intellectual way, to justify my spending any time caring about what they think. But we all care about what they think because of how much money they’ve made. And,

“I started to realize that the play I wanto have to be two sides battling it out it was going to have to be two sides battling it out ideologically as well as financially. That was when I started to think about books I had read years prior—The Predators’ Ball and Den of Thieves. All of these things were part of my consciousness for many years; they coalesced into this notion of a play about a takeover. JG : The thing that fascinates me is that in the middle of this daily reading of the Wall Street Journal and the writing of your plays you wrote your first novel, American Dervish, which is one of the most profoundly spiritual novels I’ve read in years. AA: Oh, thank you, John. JG : It opened up a whole world to me that I thought I would be barred from, about the inner life of a MuslimAmerican family. The spiritual depths of it increased my fascination with you, 10

tween the spiritual and the material, has been resolved? AA: Probably not. I think that some of the tensions we see in our culture are exacerbated by this notion that everyone has to be equal. When you look at long-standing, very enduring societies, there’s a deep streak of hierarchical conservatism where the stratification of the society allows for some of these inevitabilities, like income equality, to have a kind of philosophical basis that they don’t have in our society. And so these inevitabilities pit us against ourselves in ways that we find difficult to solve, both because they might be difficult to solve structurally and because we find them difficult to understand how to live with. JG : I was thinking this morning about our president, who is a rich businessman, whose cabinet is filled with rich people, and I wondered why

somehow, the fact that they’ve made that much money accords them an ontological value that no one can compete with. It doesn’t matter how many MacArthurs, Pulitzers, or National Book Awards you win. You can win the Nobel Prize and it doesn’t matter, because we have idealized and legislated the accumulation of wealth as our primary national value. That’s not new. I think it’s worse now than it ever has been, and that’s the deeper reason for the return to the eighties, to the moment when the balance that’s always been tenuous in our national life tipped irrevocably in the direction of wealth. The rule of the mercantile class has meant the vulgarization of national life, which is innate to mercantilism. JG : Do you feel like we’re reliving the eighties—the 1880s, the 1890s, the 1900s—the time of the robber barons?

AA: They say history rhymes. It doesn’t repeat itself but it rhymes. It seems like we’re in a rhyming scheme with certain eras of our own national history. At the same time, the transformations at the heart of America today are deeply unprecedented. The synergy that the twentieth century was able to create, the sort of incredible cohesion that the United States came to represent mid-century and past mid-century as an apex of power in the world—that means the consequences of a return to the era of the robber barons is far more consequential, not only to our own lives but to the life of the world. And, you know, we’re dealing with very significant issues. Let’s not even talk about climate change; let’s just talk about mass migrations that are going to continue over the course of the next forty years and will

money signifies value; we try to turn as much of a profit off that moment as we can. It’s not capitalism in the Weberian sense of the word, and I think it corresponds to an utter breakdown of any religious orientation, actually, Protestant or otherwise. JG : Well, that’s absolutely fascinating. What is capitalism today, then? Will you offer a name for what we have today if it’s not capitalism, or how would you redefine it? AA: Leverage. We are living in an era of debt and leverage, not capital. These are the modi operandi, the blood and lymph of the world’s economy. Both are abstracted dimensions of capital, and not capital in the strictest sense of the word, or, at least, not until the process of transforming debt payments into income was systematized into the financial world’s most lucrative activity.

An enriching of the abstracted activities in our national economic life and a corollary impoverishment of the real ones. JG : Your play heightens the audience’s awareness and makes people look at some places that they hadn’t looked. AA: Well, I was curious about the forces shaping our reality. If there is a death of manufacturing in America, for example, the forces that have brought that to bear may not be what we assume. It’s not really a battle between labor and management. The pressures of capital qua capital have their own exigencies and their own contradictions, and that is what’s creating the world. The world is not being created by evil rich people who are trying to stick it to the good poor people. The world is not constructed

ted to write was a battle. It was going ideologically as well as financially.” completely change the way the world looks. And we’re not positioned to deal with those things, because people in power have come to understand that the only way to retain power is to make money. JG : Do you think that we’ve gone beyond Max Weber and the Protestant ethic and the spirit of capitalism? AA: Weber’s notion is that capitalism comes from a kind of deep orientation within Protestantism. I don’t know that he would recognize what we see now as capitalism, because what Weber was saying was that Protestants tend to save their money and then they put it to use. We’re now living in an era where money doesn’t exist; we’re manufacturing the abstraction of money through debt, and then trying to milk the magic moment when people still believe that

There is an underlying logic here. Thomas Piketty simply demonstrated what any observer of the markets already knew: When your economic growth is based on the making of real things, your economy grows at two percent; capital grows at four to five percent. At a certain point, this becomes a battle, growth at two percent versus growth at five percent, and the path diverges. Finance is the process that transforms real growth into capital growth. GM no longer makes cars to make cars but makes cars to sell the car loans that yield five percent. We no longer sell goods to sell goods but to instrumentalize the tools of debt used to buy those goods, because that debt yields five percent. This is the deeper logic of the kind of centralization and consolidation we have been seeing everywhere over the past forty years.

from the simple story that we want to tell of it. JG : Yeah. And the fact is that Milken today is still wheeling and dealing, just not publicly. AA: But Milken’s done his penance and he has contributed a great deal of good, too. Isn’t this what they all do? It’s what Bill Gates did. He was a hustler. He was a guy who put out an inferior product and took advantage of an opportunity, a negotiation to leverage, time and again, his power and the power of his company to destroy rivals and to promulgate a thoroughly second-class operating system for the American public. And, in the process, became the richest man in the world, came up against the antitrust regulation and departed the arena and became a holy saint who tells us which five books we need to read every year. This is what they all do, and there’s 11

nothing wrong with it. It’s just the way human society is now constructed. I’m not out to criticize people like Milken. I’m not even writing about Milken. I’m taking events from that era and I’m saying these are events that pose some of the fundamental philosophical questions of our time, questions that we don’t seem to know how to talk about substantively. What is ownership? What are shareholder rights? What is value? What is the collective? What is the individual? These questions are more central to our national well-being than we understand. A failure to grapple with questions like these in meaningful ways leads to the kind of thinking that results in a decision like Citizens United, say. JG : Why is it that we feel so passive? That we’ve turned all those market forces over to a few people? AA: One of the challenges of writing this play was not to give in to the fiction that somehow the system could be encapsulated or understood through a single point of view. It cannot be. It is a system. The system operates in accordance with its own logic, and the system creates its own reality. We, as individual subjects, then interpret that system as having individual agency. We then concoct a narrative to help us understand the operation of the system. Unfortunately, when we continue to see things from a single point of view we fail to understand the nature of the system. At the end of the day, the individual without capital is no longer a meaningful citizen anymore. It’s as if the neofeudal order has been restored. A restoration of the landed gentry, if you will—those with land had the right to vote. To have meaningful political agency today, you have to have capital. We tell ourselves that somehow we live in a representational democracy because we get to vote. Sure, there’s some superficial truth to that, but the shape of our nation and our world is not being formed by the exigencies of that story. It’s actually those who are in possession of capital who are the meaningful citizens and makers of the world today. There’s a gap between the stories that we can identify with versus the stories 12

that actually reveal what’s happening in the world. JG : Does that explain why people are paralyzed? They’re saying to themselves, “I can’t do anything about it.” That’s why people vote less, and less, and less. AA: Right. Well, they can’t do anything about it because of what I’m now calling the attention-finance complex. Eisenhower coined the idea of the military-industrial complex. Well, now it’s not the military-industrial complex; it’s the attention-finance complex, in which the process of technology has been able to monetize the very process of consciousness through, for example, smartphones, where we spend hours a day scrolling in some corollary to the movements of the mind, and every single click is generating revenue somewhere. So we have this kind of a neoreptilian, click-bait consciousness. Our pleasure principle is being trained, yoked to the larger order, transforming us into predictable economic agents first and foremost; it doesn’t matter whether we’re white or black or yellow or blue, or whether we’re gay or not gay, whether we use this bathroom or that bathroom, because we’re all participating—even in our arguments with each other!—in generating revenue for the attentionfinance complex.

Kirsty Whitlock, Losses 2009, 2009. Photo: Somayya Patel. www.kirstywhitlock.weebly.com

Increasingly, I’m coming to believe that a granular understanding of why we can’t do anything about all of this is of greater value than understanding what it is that we can do about it. We have to understand how beholden we are to the centralizing forces of finance in our lives. JG : What is the entry into this fortress? What is the Achilles’ heel? AA: This is where spirituality meets all of these questions, John. Because that’s the penetrating point there, where you understand how beholden you are to what the Indian tradition would call a version of Maya. We have become completely beholden, psychologically and in terms of our neurophysiology, to a kind of materialist embodiment of Maya. What’s the recourse? Well, the recourse is quite well detailed in so many ancient traditions, the manifold paths to restoring one’s connection to one’s deepest humanity. One of the things that are so disturbing about the advent of this centralizing finance complex, this centralizing financial totalitarianism, is the way in which it undermines education by making education demonstrate its utility to the economic model. Education is supposed to foster what is most human in us, most invisible, and give us an ability to have some independence from the sort of thing

that we’re talking about. And so at the end of the day it comes back to what’s the Achilles’ heel? The Achilles’ heel is deep thought. The Achilles’ heel is critical thinking. The Achilles’ heel is a commitment to interiority. The Achilles’ heel is human contact. The Achilles’ heel is Thucydides. JG : Thucydides, did you say? AA: Just for example, yes. I’ve been reading the history of the Peloponnesian War again, and one of the things that I’m deeply struck by is the political language. When Pericles addresses the Athenians after their first year of war and they’re burying their dead, the speech that he gives them is true. He is speaking truth. JG : Give a little digest of it for our readers. AA: Here are our strengths, these are the things that we do well, this is why people don’t like us, this is why people are afraid of us, here are the things we don’t do so well. The reason it is important for us to understand who we are is because we are sending our young to die. They need to understand what values they are truly fighting for, not what values they are told they are fighting for. Who are we truly? What are the values that we espouse and that are worth the cost of life to this community? In the history that Thucydides is writing, language still has meaning. The most disturbing development, to me, of this era of Trump is that what tenuous grasp political language had on meaning before his advent to office seems to have been completely eradicated. It’s as if language means nothing anymore. And that, I think, speaks to a deep crisis at the heart of our consciousness as a nation that’s not an abstraction: a crisis of being. JG : What about the role of government, which should be the fulcrum between the financial complex and the individual. AA: At the end of the day, government doesn’t exist in this play except as, like everything else, a tool of the aggrandizement of the individual. You know, the deeper story I’m telling in Junk, I think, is the rise of the unfettered 13

ideology of individualism. And that individualism in the play is at the service of immigrant values. So I think it’s going to be very difficult for people in the audience not to root for those guys, because they have every right to. JG : The character that haunts me is the role of the African-American woman who is the spy. AA: Yes, it was famous in these big deals—there were always advisers who played both sides. Exactly as in Shakespeare’s histories—members of the adviser class who were playing both sides for their own gain. She’s a classic example of that. And what I love about her so much is that we can identify with her drive and we can identify with the way in which she embodies a new ethic on Wall Street. When people have limited opportunities to demonstrate their surpassing excellence, they will take full advantage of the limited opportunities they do have to do that—and our culture is giving people very few opportunities to demonstrate their surpassing excellence other than the making of money. And so we have remarkable people who are committed to utterly hollow values in order to partake of that enduring human desire to set oneself apart. JG : For me, the biggest change in my life was in the seventies, when the draft ended and the armed forces became a volunteer army, and at the same time we were given credit cards. It was as if we were absorbed into the system in a way that paralyzes ninetynine percent of people. AA: I think that’s exactly right. It is important to grapple with the question of the draft and the question of the enduring place of warfare in the life of a nation, or the life of a civilization, or the life of a community. The defining experience that warfare is for a class of individuals who make their place by fighting wars; the rite of passage that killing in the service of the state has been for the development of an individual. In a way, we’re victims of our own success. We’re victims of prosperity and we’re victims of pleasure and we’re victims of safety. And those are all good things, but, at the same time, if you take 14

the long historical view, we are a species that has always made war, and we are a species that has always found meaning in war, and we are a species that doesn’t seem to come to consciousness until we confront death individually. And so all of those things are part and parcel, I think, of what you’re talking about when we talk about the obligatory draft no longer being necessary and then the bounty of credit, the sudden bounty of debt, which is, of course, what the play is about. JG : At the beginning of the interview, you said this is a war play. Do you feel that we have displaced our need for war and just brought it into other arenas, like finance? AA: The play is certainly making that case, that symbolic warfare is wreaking havoc. It’s a kind of civil warfare that we’re engaged with through private equity now, and we don’t seem to recognize it for what it is. And that’s very destructive. JG : You mentioned psychoanalysis earlier—is that how you came to terms with becoming an American? I’m amazed by how you got out of the world that you grew up in and managed to find a new, truer self within you, within America. AA: I feel very seen by that question, and the answer is the subject of another conversation, John. But psychoanalysis has been part of it. I come from a pre-Freudian culture. So how do you bridge existence, how do you come into consciousness coming from a pre-Freudian culture, how do you then find purchase in a world that is not just Freudian but post-Freudian? There is a huge gap. JG : It seems to me that the world you describe in American Dervish is from another century. AA: On some level, it is. And so to somatize that leap is an enormous labor, and it has been the labor of my life. JG : What gave you the strength never to censor yourself in telling that story? AA: I never thought anybody would read it. (Laughs) I was in dialogue with some part of myself and some part of

my race. I didn’t have any prospects. I didn’t have an agent. I didn’t have a publisher or an editor. I’d been writing for so many years, and I had struck out. JG : Do you feel that you have to go into exile from your past? AA: I am in exile. And it’s funny to say that I, an American-born man living in America, am in exile both from my heritage and in some sense from my country, America. (Laughs) It gives you a very good perspective as a writer, because you really are an outsider and you always have to be an observer. So that just becomes your reality. And ultimately, perhaps, there’s nothing wrong with it.

Ray Beldner, All You Need, 2002 (after Robert Indiana’s LOVE 1966).

THE COLLECTIBLES OF THE MAGI c h r i s ba c h e ld e r

“Della,” said [Jim], “let’s put our Christmas gifts away and keep them a while.” —“The Gift of the Magi,” O. Henry Readers may recall the story of Jim and Della Young, those penurious lovers whose fiscal mismanagement and foolish investments culminated in a catastrophic transaction on a Christmas Eve many years ago. Della, remember, sold off her best asset, her hair, so that she could buy Jim a gold chain for his precious watch; Jim, meanwhile, liquidated his watch, his only possession of value, so that he could procure for Della the frivolous hair combs that she had coveted in, yes, a shop window. O. Henry’s moral was clear—the ruthless market is a perilous place for those guided by the profound irrationalities of devotion.

But the Youngs, after all, were young, and very much in love. They were stumbling through a fog of affection and generosity, blind to value. What most people do not know is that this story actually has a happy ending. The Youngs got older, dear readers, and wiser too. One spring day, Della, now in her fifties, took a lowboy to the set of “Antiques Roadshow.” Well, the white-gloved appraiser pronounced the lowboy worthless, but he was struck suddenly by the vintage comb in Della’s hair. He asked her to remove it so that he might inspect it. He turned it gently in his hands, ran a magnifying glass above it, made low noises of affirmation. “Yes,” he said. “Yes.” “See this?” asked the appraiser, pointing at the edge of the comb with the nail of his pinky. “Is it evidence of superior craftsmanship?” asked Della 15

breathlessly. She had been embarrassed and disappointed about the lowboy—she and Jim had quite a bit of credit card debt—but she was now becoming excited. She had only recently rediscovered the combs in a shoebox at the back of her closet. All but one—the one she wore today—was warped or broken. “No,” he said. “The mottled area here—and here—shows us that this comb is made of particle board. Very cheap.” “Oh,” Della said. “And can you see this drip mark? That’s a thin, watery varnish quite sloppily applied. And the tines are crooked and of different lengths. This is an exquisite example of terrible quality.” “But—” Della began. “The company that made these combs went bankrupt within a year,” the appraiser explained. “The founder’s child was kidnapped, but as it turned out he had staged the crime. Quite a scandal. At any rate, there are very few of these combs in existence and they have become outrageously valuable. I honestly can’t believe you were wearing it.” “Well, you see—” “They’re quite fragile. Hair oil will make them disintegrate. Socialites and celebrities typically wear these combs on a necklace. You haven’t seen them? Inside a fiberglass, humidity-controlled egg, attached to a simple silver chain.” “Oh,” Della said. As the appraiser wrote a number on a small piece of paper, Della told him that the comb had been a gift from her husband and it was of sentimental value. The appraiser laughed and laughed and laughed. “Oh, sentiment doesn’t create value, little miss,” he said. “What creates value are clear market forces like scarcity and demand and the patina of time. And socialites on red carpets. And fake kidnappings. And humidity control. And a kind of aristocratic irony. And the outrageous opening bids of idiosyncratic Japanese collectors. It’s a science, really. There are clear principles.” The appraiser handed the paper to Della, who fainted. Jim sat at the dining room table, staring at the piece of paper Della had given him. “I can’t believe it,” he said. “I know,” she said. Jim reached for the comb, which was resting in the dog’s bed atop the table. “Please don’t touch it, honey,” Della said. Jim pulled his hand back, but leaned forward over the comb. “It is a beautiful piece,” he said. “Is it mahogany? You know, I did kind of have a hunch when I bought it that it would be a sound investment. I’ve always had a good eye and a good sense of the principles of the secondary market.” Della nodded. The dog, lying on the hardwood floor under the table, sighed. Then Jim’s face clouded. “But, honey,” he said, “could you stand to part with it?” Della, who was reaching to pull dusty champagne flutes from a high shelf, quickly turned and walked to Jim. She put her hands on his shoulders. “It will be difficult,” she said. “But you had such a good grasp on the principles of the secondary 16

market, and I don’t want to squander the opportunity you have given us.” Jim stood and embraced Della. “Say,” he said. “Do we have any champagne?” — There is just one thing left to tell, dear readers. When the movers came to take the Youngs to their new mansion, they discovered behind Jim’s dresser a small box covered in cobwebs. In the box was the gold watch chain that Della had given Jim for Christmas so many years ago. “Say, look at this,” Jim said to Della. “I wonder”—here he winked—“if it’s worth anything close to as much as the gift that I gave to you.” After some very promising internet research on the value of vintage gold watch chains, the Youngs flew to Indianapolis in their private helicopter for a meeting with an expert appraiser, who was delighted by the chain. “So plain and simple,” he exclaimed. “Made of rich and pure material. How much did you pay for it originally?” Jim turned to Della. “Twenty-one dollars,” she said. “Oh,” the appraiser said, chuckling. “Yes, well, this chain certainly has increased in value.” Jim tried to remain calm. “How much would you say it’s worth?” he asked. The appraiser ran the chain gently through his fingers. “For this watch chain,” he said, now raising it above his head where it glinted in the sunlight from the window, “you could expect anywhere from seventy-five to ninety dollars.” Jim remained at the counter, staring mutely up at the gleaming chain. As O. Henry once instructed, dear reader, For ten seconds let us look in another direction. Della, standing behind Jim, was unable to discern the nature of her husband’s silence. After some time, she touched his elbow gently. “Sweetheart,” she whispered, “I’ll just meet you outside on the helipad.” Chris Bachelder is the author of The Throwback Special and Bear vs. Shark, U.S.!, and Abbott Awaits. His fiction and essays have appeared in McSweeney’s, The Believer, and The Paris Review.

MONEY by da na g i oia

Money is a kind of poetry. —Wallace Stevens Money, the long green, cash, stash, rhino, jack or just plain dough. Chock it up, fork it over, shell it out. Watch it burn holes through pockets. To be made of it! To have it to burn! Greenbacks, double eagles, megabucks and Ginnie Maes. It greases the palm, feathers a nest, holds heads above water, makes both ends meet. Money breeds money. Gathering interest, compounding daily. Always in circulation. Money. You don’t know where it’s been, but you put it where your mouth is. And it talks.

Dana Gioia is an award-winning poet, critic, and librettist. From 2003 to 2009, he served as the chairman of the National Endowment for the Arts, and he currently lectures at the University of Southern California. “Money” is reprinted from 99 Poems: New & Selected by Dana Gioia with permission from the author.

Study for a Head VII by kennardphillipps.

AN INTERVIEW

This summer our co-executive editor John Guare sat down with a billionaire, who will remain anonymous, to talk about the business of finance, working with Michael Milken, and winning. John Guare: You embody the classical ideal of an investor. In the mid-eighties, when junk bonds, which seemed essentially worthless, suddenly became the basis of an economy, what did you think? Anonymous: Well, actually, it made perfectly good sense. I’ll put it this way: about ninety-eight-percent good sense. Michael Milken did an extraordinary valid study of risky bonds, bonds that were not highly rated. He had a business that had some bonds out and they weren’t doing all that well; they had a lot of debt versus their cash flow, and they were yielding. The bonds were trading at a discount and yielding nine percent, and the real good bonds, General Motors, were yielding three percent, and Milken tracked the rewards of all of this. JG : Was anybody using these risky bonds? Was anybody trusting them before him? A: People didn’t issue these bonds as being highly risky. They became risky. Let’s say that this chain of rug stores could raise money at, say, five or six percent, but when they had hard times their bonds would go down and they’d be yielding nine percent. Some of the rug stores made it through the hard times and some didn’t. And what Milken found was that if you take the bonds where you lose all your money, or the face value of the bond is gone, and you don’t collect the money or you collect maybe just a small portion of it in

A nonymous

a bankruptcy proceeding, but you were getting nine percent for a few years, statistically that really actually made up for the loss very often. Over many, many cases, you did better than General Motors, which was always paying off but only gave you three percent. JG : Did you take advantage of this yourself? A: No, I didn’t, because only public companies can list these bonds, and I’m a very private company and I don’t show my balance sheet to anybody, so I can’t do that. JG : Did you know Michael Milken, or did he just call you? A: I met Mike Milken when he had a steel-top desk and he took the bus every morning from Philadelphia to New York with a group of assistants and he sat on the bus doing all his work. He’d get to the office before the market opened. He worked for Drexel Burnham. He was a nobody. When the 1974 recession hit, the REITs [real-estate investment trusts] all went to hell because real estate wasn’t selling, and everyone had gotten really stupid because it was such a hot thing. Everybody, including Chase Manhattan Bank, had a realestate investment trust. And everyone wanted to invest in it, so they had a lot of money to invest in real estate; and, because they had to invest all this money in something, they found stupid real estate to invest it in. So then we had a big bubble. Then the market collapsed and no one could pay off their debt. We were buying their debt at twenty-five cents on the dollar. And we found that the biggest buyer of all this debt is Mike Milken, so we go to see Mike Milken and say, “Hey, who are

you?” (Laughs) “What are you doing?” And he said, “And who are you? What are you doing?” And so we sat down, we discussed things. He said, “Well, look, it’s kind of stupid for us to bid against each other. Why don’t we just pool? When you see something you like in your buying, call us up and we won’t buy any of that; you buy it for us. You buy a share of it, an agreed-upon share. And we’ll do the same thing if we see something great.” And he said, “And I’ll do the buying, because Drexel Burnham has the brokers.” I ended up making money with Mike Milken. He’d say, “You know, our position in this particular company’s debt went up from forty percent—forty cents on the dollar yesterday to eighty cents on the dollar.” I said, “Goddamn. What in the hell happened?” He said, “We finished buying; now we’re sellers.” (Laughs) We’d completed our position. JG : Did he have a talent for seeing the patterns, determining the patterns, in this morass of numbers? A: No, that wasn’t a pattern thing. First of all, he was goddamn hardworking; second, he was the only one who was doing this. Everyone else was saying it didn’t fit. Over in the Credit Department, it was, like, “Hey, we don’t deal with those. That’s a bankruptcy sort of thing, and we don’t do that.” And over in Equity they would be saying, “Well, we don’t do debt.” He’d just man those phones, and he knew who the buyers were, who the sellers were, and he’d call up and he’d say, “You’ve got such and such and you’re stuck with this debt that’s really junk and terrible, and I can bail you out if you want some liquidity.” And they’d 19

say, “Oh, my God. Oh, my God. Yes, we’d love some liquidity. How much will you give me for it?” (Laughs) And he’d quote his price. JG : When I write a play, I finish and think, Oh, I’ve made something. What is the pleasure like when you accomplish such a deal? A: Milken’s pleasure was . . . it’s like winning a ballgame. You put a score on the board: “Hey, I just made $100 million.” He lived modestly in California; he entertained all of these people fabulously because that was on Drexel’s ticket. He even made a deal with Drexel. He said, “I’m going to go to California, I’m going to man the office out there, and I’m going to get fifty percent of the profits. That’s my price.” And his fifty percent of the profits out there was eighty percent of Drexel’s entire nationwide profits. He was the king, and he took fifty percent. JG : How long did his reign last from the time he first noticed the value of this junk until he was king of the bonds? A: I met him in 1975, and it was just after ’85 that he got into trouble. JG : Could you have predicted that he would come to a horrible end? A: In the sense that the SEC, the regulators, were out for him because all these CEOs of big public companies thought he was an enemy, he was a threat, but he was only a threat to their laziness. During the takeover period, and still today, with private equity, there are these CEOs of big public companies who just don’t know what they’re doing, and as soon as they become the CEO they’ve got about eight years before retirement, so they spend most of the eight years designing and building their retirement house. JG : Is making a billion dollars just another aspect of winning today’s ballgame? A: Oh, yes, because there’s tomorrow’s ballgame. JG : Was Mike getting high? A: Yes, it’s an adrenaline high. I have to say that I was susceptible to it. One time I had just made one heck of an amount of money, the biggest deal I’d ever done in my life, and six weeks later I’m sitting in my office and kicking my20

“And then I realized my position, you know? It was, like, ‘Boy, this is sick. I’m crazy.’ I’m hooked on the adrenaline high.”

self, saying, “God, I don’t have anything on the table. I need some ideas. I’m not worth a damn. I’m not doing anything.” And then I realized my position, you know? It was, like, “Boy, this is sick. I’m crazy.” I’m hooked on the adrenaline high. I was a junkie. Each time, it’s the transaction and the excitement of the thing and putting it all together, scheming about it, getting it up. And then it works and you go, “Woo! Yeah! Golly, that was fabulous!” JG : You’ve left this world, for all practical purposes, is that right? A: Well, yes. I got tired of the game. I have a dear friend who is an art dealer, and we’d have dinner and I’d say, “You know, I really envy you because you enjoy so much what you’re doing. And, quite frankly, I think I enjoy winning, but I don’t enjoy what I’m doing. What you’re doing is more fun.” So after a while you kind of say, “I’ve had enough of this and I’m tired of this. There are other things in life. Move on.” All the time while I was doing business, I was studying. I studied various subjects, and that kept me excited about things. Learning. JG : What did Milken get excited about?

A: Mike was the brilliant genius with the incredible ambition and drive. I’ll tell you a story that really explains Mike. Whenever he had appointments and another appointment came up, he would just make it earlier in the day. Now, he’s out in California. You have to be at the office, at the very latest in New York City, at eight o’clock. That means five o’clock in California. So he has already got appointments at four-thirty and at four in the morning, and then, as soon as the market would close he had a long afternoon of appointments. JG : Was he relieved when he was put in prison? Could he finally say, “My God, I can sleep through the night”? A: Oh, no. You know, he’s barred from finance. So when he was diagnosed with prostate cancer he got the fifty biggest experts in prostate cancer in the world and put them together and started creating a research program. And, knowing Mike, he probably designed the whole thing—at least as much as all the experts did. JG : Did he have a family life? Did it survive? A: Absolutely. He is a wonderful family man. He has a wonderful wife, and when they were home they were eating around the kitchen table with the kids and taking them to baseball games and all of that. JG : So it’s all about having the right information. People are saying for the first time the market has no connection to what’s happening in the real world. The market seems to operate on its own energy. Do you feel that at this point that you’re controlling this economy of nations? A: No, no, no. That’s not the point. Maybe Mike got into that, and Mike was also a wonderful performer and, you know, performers love audiences that they can manipulate, and audiences worship the performer and applaud and applaud and applaud. It’s like these motivational speakers. He was also a motivational speaker. He was just so smart doing this. He would have, let’s say Saul Steinberg, who was going to take over Disney. Milken was financing Saul and he was going to issue some junk bonds,

and he wrote a highly confident letter. He invented this whole thing. There was no such thing as a highly confident letter. It’s like being able to create your own currency. He would announce to the newspapers, “We are going to issue a highly confident letter that we can issue junk bonds of $6 billion to support Saul Steinberg’s offer to take over Disney.” And everybody would jump: “Oh, my God! They’re going to write a highly confident letter!” All of a sudden all he had to do was say he was going to do it and the whole financial market would move. JG : This way of doing business doesn’t seem to have anything to do with the classical way of making money? A: Well, it does, like J. P. Morgan financing the railroads. The railroads would come to J. P. Morgan and they’d say, “Hey, J. P., the government has given us a license to run the line from here to here; we almost have it from here to there. And what can we do?” He said, “Great. Right now, you’re halfway, and halfway is not halfway because, you know, it’s like one-tenth of the way. But I’m with you and I support you, so here’s what we’re going to do, boys. We’re going to issue some bonds right now that are going to be highly risky, because you’re halfway there but onetenth of the value there, and we’re going to have to offer them at one-tenth value because they’re risky.” JG : So J. P. Morgan is a legitimate forebear of Michael Milken’s? A: Absolutely. Because there’s a lot of risk. They haven’t built the damn railroads. So then you’d have to say, “Well, wait a minute. There aren’t any people in Minnesota, so who are your customers going to be?” (Laughs) “Oh, they’ll be there by then, because that’s what we’re going to do with their land grants. We’re going to fill up Minnesota with people because they’re going to go out there with their land grants, and so we’ll have customers.” Well, look how risky all of that is; how everything has to be put together and maybe it doesn’t work. JG : What is it like to lose a billion dollars?

“You can cite all the reasons you lost a billion dollars, but the one that’s actually there is that you were stupid.”

A: You feel real stupid. That’s one unforgivable thing. There’s no getting away. You can cite all the reasons you lost a billion dollars, but the one that’s actually there is that you were stupid. JG : Now that Milken can’t operate in the finance world, what has his life been? A: Well, he has been working. Other than his foundation, he can take on private clients. JG : And proceed in the same way? A: Yeah. If I wanted to hire Mike Milken to advise me on something, that’s a private deal between two people. JG : I see. So putting him in prison didn’t change his life that much? A: Well, it did in the sense that he can never run the circus that he ran. But he adjusted. He used to have the most awful wig that was so blatantly false. When he got to prison he took it off, and he’s been baldheaded ever since. He had a Dacron Rayon wig. (Laughs) And he just took it off, and that was that. Let me tell you a couple of Mike Milken stories to give you an idea of how he was crooked and how he wasn’t. I think that it was a political issue and he went to jail for basically

nothing, and, quite frankly, the authorities couldn’t even understand most of what he did. Let’s take John Kluge, for example. Kluge takes his oldest television stations private. If you looked at the cash flow that Kluge had from his stations and you looked at the bonds and the interest they had to pay and the maturity date, you couldn’t get there from here. Those were not going to pay out. And Mike tried, I don’t know how many times, to get us to buy those. Kluge was selling his television stations; he bought his public company, which he was running, he took it private and he took it private with junk bonds that, if you looked at the numbers, could never be paid off. And Mike Milken on three separate occasions would bring it up again: “I still want you to buy some of those bonds.” And he’d already sold them; they were already out floating. And I said, “You’re crazy, you know. Look at the numbers.” He said, “Trust me.” I said, “Mike, we can’t trust you. You tell us how the numbers work, and then we’ll trust you. But you can’t tell us how they work.” He said, “Trust me.” And then all of a sudden, one day, Rupert Murdoch says, “Mr. Kluge, let’s make a deal. I will buy your stations when all the bonds are paid off.” So Kluge had taken his company private, knowing that he was making the deal with Rupert Murdoch. Rupert probably came to him and said, “I want to buy your TV stations,” and Kluge said, “Okay, let’s make a deal. I will first take them private. I will own one hundred percent of the stations. And that’s when you come to me and say you want to buy my TV stations.” Murdoch probably said, “Fine. That sounds good to me.” And that’s Kluge being crooked, because he screwed his shareholders. Mike was in on that. JG : But there are no moral qualms about screwing your stockholders—it’s just part of the game? A: (Laughs) Well, there ought to be. And there are rules against it with the SEC and so on, but the SEC is very stupid at protecting public stockholders. Okay, 21

JG : No kidding? A: They just put them in their own

“I’ve always thought one of the best reasons not to cheat is that what if you won the Olympics and you cheated? The rest of your life you would wonder if you could’ve won the Gold Medal without cheating.”

here’s a deal where Mike got greedy. So Mike is one of the private-equity firms financing the buyout of a company— you know, taking the company private— and it’s all a friendly deal. And Mike calls up and says to the head of the buyout firm, “Look, this isn’t selling well. I either need to increase the interest rates, which is expensive, or attach some warrants to them. I think we ought to attach some warrants to them, and I think that I can sell them.” “Okay, how much? Attach some warrants.” When you attach a warrant to a bond, it says, okay, not only do I buy a bond but I get a warrant, which says that for the next five or ten years I get to buy this stock at a fixed price. So if it doesn’t go up, I don’t exercise the warrant; if it does go up, I exercise the warrant and automatically make a profit. Okay, and so Mike not too long after this has his legal problems and he goes to jail. The guy at the buyout firm finds out that, well, there were two buyers of those warrants, and instead of attaching them to the bonds so that the bond buyers got the warrant, too, those warrants actually went to Lowell and Mike, fifty-fifty. (Laughs) 22

account. JG : Is that stealing? A: What it’s doing is saying you

need to pay me more to do this for you, but I know you won’t like that, so, instead, I’m going to say that I need to do this in order to make it more attractive to the buyer. But I’m actually lying to you, because I’m not going to make it available to the buyer; I’m going to put it in my own pocket. JG : And it’s just for the winning, just for the fact of it? A: Yeah. Now, that’s a case where he really just screwed somebody and lied. I don’t do that. I’ve always thought one of the best reasons not to cheat is that what if you won the Olympics and you cheated? The rest of your life you would wonder if you could’ve won the Gold Medal without cheating. To me, it’d be the biggest torture in the world.

by A m a n da S t e i n b e r g I really only need enough money to: •

Have a healthy spread of basic groceries (food isn’t

my pleasure source).1 •

1. I do like fancy food and will justify paying more for it.

Own a small apartment (I hate cleaning).

•

2. I don’t actually need new clothes; I own twenty dresses and three black blazers.

Buy some new clothes to ensure that I look professional

and polished.2

3. At age forty, I have to dye my gray roots black every four

•

Take a flight to Greece every summer.

weeks or I look like a skunk. I’ve been cutting and dying

•

Provide my children with private-school education.

my own hair for years now to save time and money, much to my mother’s disgust. “You would look so much better if

Everything else is a hundred percent unnecessary.

you just went to a professional,” she says. Really, I’d rather go gray completely, but my friends and family caution me

Oh, except I also need to pay for:

in unison that I can’t be“Amanda, CEO,” the way I want to

•

the legal bills related to my divorce

be, and also gray at forty. So I buy my L’Oréal 10-Minute

•

taxes

Root Rescue for $6.89. I look good enough.

•

savings

•

retirement

4. Less may be more, and simple may be smarter, but

•

529s for two kids

enough seems, still, never to be enough.

•

the $5,000 I owe my sister

•

my hair dye 3

That’s enough.4

How much money is enough money? Enough personal security? Enough

Where do we begin? The economist John Keynes offers a useful

legacy? Enough stuff? What’s “enough” money is highly subjective, and

distinction: “Now it is true that the needs of human beings may seem

thinking about it elicits dark fears surrounding deprivation and loss of

to be insatiable. But they fall into two classes—those needs which are

control. You have bills to pay and children to educate, so why would you

absolute in the sense that we feel them whatever the situation of our

superimpose an arbitrary limit on your money?

fellow human beings may be, and those which are relative in the sense that we feel them only if their satisfaction lifts us above, makes us feel

One reason is that as wealth inequality increases, the world as a whole

superior to, our fellows.”

becomes less stable. Second, gluttony is an itch that can never be fully

In other words, there are two classes of spending: for security and for

scratched, so contemplating personal consumption limits may provide

superiority. What would happen if we focused more on security and less

you with an equally desirable peace of mind.

on superiority? I’m not proposing communism, but capitalism has jumped the shark.

“Enough” is hard to define when we’re culturally, collectively addicted to buying our way through periods of boredom, family expectations, or

Scoff at me all you want. Call my proposal naïve or unrealistic, as

who knows what holiday. Affluenza: The All-Consuming Epidemic, by

humans are humans and we compete in order to survive. But defining

John de Graaf, David Wann, and Thomas Naylor, illustrates in detail the

your own “enough” means prioritizing your peace of mind over the

crushing personal and social impact of out-of-control spending. Affluenza

hamster wheel of superiority. The first step is to think critically about

is “a painful, contagious socially transmitted condition of overload, debt,

what really matters to you versus what you believe you should have.

anxiety, and waste resulting from the dogged pursuit of more.” Its

Chasing the latter leads to “never enough.” There’s freedom in saying,

ultimate threat? To exhaust our individual financial security along with

“No, thank you,” or “That doesn’t make sense to me.” You’ll be judged,

the earth’s resources.

and you’ll probably endure an eye roll or two, but you’ll begin to smile more graciously, because you’re letting go of competition that didn’t

Yet we’re caught in a loop of binge and purge. It’s time to eliminate the

matter in the first place. You and the world will be better for it.

loop. We have to determine our enough. Amanda Steinberg launched digital media platform DailyWorth in 2009 to bring a fresh voice and an outsider’s perspective to personal finance. In 2015, she started digital investing service, WorthFM. Oprah selected her for the exclusive SuperSoul 100 and Forbes named her one of 21 New American Money Masters. She’s the author of Worth It––: Your Life, Your Money, Your Terms. 23

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MICHAEL THOMAS MALC OLM GLADWELL AYAD AKHTAR CHRIS BACHELDER DANA G IOIA ANONYMOUS AMANDA STEINBERG JOHN A. PARKS BARBARA ALPER SE TH T OB O CMAN JEAN-PIERRE LAFFONT KIRSTY WHITLOCK S O MAYYA PATEL RAY BELDNER KENNARD PHILLIPS MARK WAGNER

Very Expensive Push Broom, 2008 by Mark Wagner. Courtesy the artist and Pavel Zoubok Gallery.