A toast to the downfall of Lehman brothers,

As a wine drinker and wine lover it has been hard not to be rather cheered up by the images of Lehman Brothers employees walking out of their office with boxes in hand shouting trite like ‘you’re watching history, man’ at journalists. Call this bitter, jealous or misunderstood – but is wine not about sour grapes? And if it’s true that wine is sour grapes then it is also true that it is sour grapes that become more palatable over time, and like my seemingly cynical cheer at the demise of City bankers such an opinion will also become more palatable over time. The reason I believe this is because of one thing that society has temporarily forgotten: value.

My grandfather was a banker and probably spent his entire life working for the same profit a single banker a third his age would have made in bonuses over the last five years. The key difference between my grandfather and the modern banker however, is that my grandfather valued his society, his customers and the – whilst the banker of today has merely intellectualised greed with a series of financial instruments used to justify the unjustifiable and create as much personal gain in as short a span of time as possible. So much has the plague of greed and lack of value spread that Rhodes Scholars and top intellectuals have been wooed into studying finance, whilst in today’s times of real challenges , their skills would be better employed in engineering, medical research and civil society.

The old institutions were even built with materials of substantial value – marble, granite slab and steel – whilst today’s modern building, like the ‘Gherkin’ in London or many other modern institutions seem to have chosen a material that reflects the high-risk, short-term gain and quick-buck mentality of modern business: glass. Today’s institutions are primarily made up of transparent and easily shattered material – how apt a metaphor.

Listening to a debate on torture the other day I was struck by one of the key tenets of the argument against torture being that it dulls our intelligence community and our ability as a society to ask proper questions and gain reliable information honourably. The strength of the argument for me was that it did not appeal to human suffering but rather appealed to the of our society – saying that torture makes our institutions lazy and therefore weakens our society. Surely that also holds for using high salaries and bonuses as an incentive to work, and the same argument can be made against the high-risk/ high-return mentality that has been in fashion for a time – not on the basis of an argument against greed, but rather on the basis of long-term and the value to humankind. Paying signing bonuses and giving large profits doesn’t make people work harder, it just makes them want more for less, and in a slew of defaulting banks one has to wonder where all that money for all those bonuses was coming from in the first place. What will impact the future of society more: the downfall of Lehman Brothers or major headways into stem-cell research? Stem-cell research is the obvious answer. Given that, think of all the wasted talent the job-losses that Lehman represents – intelligent minds distracted by greed who, instead of getting lost in the complexity of derivatives and materialistic pursuit could rather have been adding actual value to society trying to make their mark on history.

In these times of financial uncertainty, three things have actually gone up in value: wine, art and mineral resources. These are all things with perhaps the exception of oil that our grand-children will one day see (assuming the world is still around of course.) Society demonstrates its true wisdom in times of adversity as was the case during FDR. Only when great societies are ascendant do they lose judgement and overextend themselves (think Rome and post-Clinton America). Adversity forces us back to the basics, while opulence encourages indulgence in the superfluous.

If we as a society are to succeed, and our civilization is to continue prosperously and sustainably, then we must focus our efforts on those things that create value for more than ourselves – but for generations to come. Wine is such an area – it enriches families, creates a profitable supply chain, puts focus back into the environment and provides pleasure to the consumer. Whilst old Lehman employees may have hit bottom, they can always get up and dust themselves off and try again –taking comfort with a few friends and a couple glasses of wine. At this time when their employer no longer exists – it will prove that the only thing valuable in their lives is their friendships and their family. The failure of their institution discredits their chosen career and hopefully when the hurt of Monday’s events subsides and the lens of greed is lifted, they can refocus on what matters and ply their brains to creating sustainable value in an industry our grandchildren and children the world over will one day benefit from. Let us not fear economic uncertainty, but merely reflect on the causes of it and then go back to the thread of that which runs through history and continues to last today: art, wine and all that which thousands of men throughout the ages have laboured away at –not for profit or wage but merely for the love of civilization and society. Let us say cheers to the death of Lehman and hope their employees will emerge with a desire to help society and not just themselves…

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Posted in Art, Business, Culture, Events, Lifestyle, News, Passion, Wine, Wine Review | 8 Comments »

  • Doug Cress

    Despite trying to make as much money as possible, Lehman’s downfall had less to do with greed and more to do with inadequate risk management.

    A bad economy (and I know many good people – Lehman employees included – who have have recently lost their jobs) is bad for everyone – including the wine industry.

  • Doug Cress

    Despite trying to make as much money as possible, Lehman’s downfall had less to do with greed and more to do with inadequate risk management.

    A bad economy (and I know many good people – Lehman employees included – who have have recently lost their jobs) is bad for everyone – including the wine industry.

  • http://www.tastevine.com Ruarri

    point taken – I know someone who joined Lehman 2 months ago and is now out of a job. The problem is that when they signed they got a £40k signing bonus, so losing their job wasn’t such a bad thing – but that signing bonus must have come from somewhere… and perhaps that’s not ‘risk management’ its just from the self-congratulation fund.

    yes – a bad economy is bad, and the job losses are awful. hopefully we don’t lose the lesson though. I think an economy that focuses too much on service and self-enrichment and not on building long-term value is a bad thing. Many people at Lehman and on Wall Street didn’t bat an eyelid for people in Katrina and wined about tax-increases…

    we need to look at having more ‘green-collar’ jobs – jobs in agriculture, sustaining the environment and building a better future. we’ve just been caught in a little lapse of greed where we all lived credit-fuelled lifestyles and its come back to bite us.

    I think that the restaurant and leisute industry may suffer – but we are seeing share prices of Dominoes Pizza and such franchises go up, and subscripitions to Netflix and retail of bottles of wine are also on the increase… a bad economy is not ideal – but people going home to drink a little wine and spend time with the family, and perhaps eat a pizza is not the worst thing either.

  • http://www.tastevine.com Ruarri

    point taken – I know someone who joined Lehman 2 months ago and is now out of a job. The problem is that when they signed they got a £40k signing bonus, so losing their job wasn’t such a bad thing – but that signing bonus must have come from somewhere… and perhaps that’s not ‘risk management’ its just from the self-congratulation fund.

    yes – a bad economy is bad, and the job losses are awful. hopefully we don’t lose the lesson though. I think an economy that focuses too much on service and self-enrichment and not on building long-term value is a bad thing. Many people at Lehman and on Wall Street didn’t bat an eyelid for people in Katrina and wined about tax-increases…

    we need to look at having more ‘green-collar’ jobs – jobs in agriculture, sustaining the environment and building a better future. we’ve just been caught in a little lapse of greed where we all lived credit-fuelled lifestyles and its come back to bite us.

    I think that the restaurant and leisute industry may suffer – but we are seeing share prices of Dominoes Pizza and such franchises go up, and subscripitions to Netflix and retail of bottles of wine are also on the increase… a bad economy is not ideal – but people going home to drink a little wine and spend time with the family, and perhaps eat a pizza is not the worst thing either.

  • Draano

    As a former employee of Lehman, I’m glad you enjoyed our misfortune. Not everyone was a banker there, and not everyone was making an outrageous fortune there. I received a better salary in the banking industry than I would have made in my previous job, but if you factored in the 60 – 70 hour high-stress work weeks, my per-hour rate was the same or lower than I received prior to coming to the street. And as you were feeling good about yourself, you weren’t imagining the college funds or savings cushions that evaporated before our eyes while a firmwide moratorium was in place on our trading the firm’s securities, preventing us from getting out 5% of years of the bonus money that was paid in firm stock.

    Will you also sit outside families’ houses while they are evicted due to loss of work in this down economy? You better buy a few more cases of wine and prepare to be hammered constantly. Perhaps you’ll be decent enough to share a glass with the departing occupants…

  • Draano

    As a former employee of Lehman, I’m glad you enjoyed our misfortune. Not everyone was a banker there, and not everyone was making an outrageous fortune there. I received a better salary in the banking industry than I would have made in my previous job, but if you factored in the 60 – 70 hour high-stress work weeks, my per-hour rate was the same or lower than I received prior to coming to the street. And as you were feeling good about yourself, you weren’t imagining the college funds or savings cushions that evaporated before our eyes while a firmwide moratorium was in place on our trading the firm’s securities, preventing us from getting out 5% of years of the bonus money that was paid in firm stock.

    Will you also sit outside families’ houses while they are evicted due to loss of work in this down economy? You better buy a few more cases of wine and prepare to be hammered constantly. Perhaps you’ll be decent enough to share a glass with the departing occupants…

  • http://tastevine.com Jake

    There will certainly be cases in which it is unfortunate, and for those I feel their pain.. however, there is much to say about a company that hands out $2.5 billion in bonuses after having the largest bankruptcy in history – http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4795072.ece

  • http://tastevine.com Jake

    There will certainly be cases in which it is unfortunate, and for those I feel their pain.. however, there is much to say about a company that hands out $2.5 billion in bonuses after having the largest bankruptcy in history – http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4795072.ece

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