An ER Doc’s Diagnosis of Wall Street Idiocy

john-thainI’m starting to think narcissistic disorder is a relatively common affliction among the powerful. See my recent post on Rod Blagojevich. Perhaps there is a functional business or political advantage gained by this particular personality disorder.
CEO of Merrill Lynch John Thain recently had to resign after it was discovered he had spent 1.2 million dollars redecorating his office. Doing that in the best of times seems insane to me, especially since the toilet alone cost $35,000. But to spend so frivolously when Merrill Lynch was completely imploding, and needing to be bought out by Bank of America is pathologic. Normal people would not ask the federal government for billions of dollars while their company was completely falling apart, and then spend that much on decorating. Oh, and he also bonused out several billion dollars to Merrill Lynch executives prior to their take over by B of A.

As a doctor, I am pathologically motivated to explain this insane behavior by making a diagnosis, so we’ll go with narcissistic personality disorder. But why are these narcissistic people (Thain, Blagojevich, Bernie Madoff, etc) so successful? I mean they’re running companies, getting elected governor, and people are handing over their life savings to them. What gives?
Well, this can’t be coincidence. I put forth that their success is in fact due to their narcissism. Situations that would make the normal person nervous, and cautious, have no effect on these individuals. They simply charge forward to face whatever challenges life throws at them, and in so doing, appear heroic. At least initially. Then at some point, their heroism is recognized for what it really is–Hubris, foolishness, and narcissistic personality disorder.

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{ 5 comments… read them below or add one }

cardiogirl 01.28.09 at 10:54 am

I have to say, now that I know there is a $35,000 toilet in existence I really want to use it. Just once to be able to say I’ve done that.

Your ER Doc 01.29.09 at 5:56 pm

Actually, I just found out on the Daily Show that you can’t actually use the toilet. It’s apparently decorative. So the whole thing actually makes even less sense now.

Erica 01.30.09 at 9:50 am

I’ve had the dubious honor of working for several people with similar traits. Often, besides being narcissistic they’re also very charming. I agree that they have the ability to be successful in some ways because they’re completely unhampered by social expectations. They’ll tell you whatever you need to hear to close the deal – that there might be repercussions never crosses their minds.

Their employees are not people, they are tools. The smarter ones will surround themselves with tools who will insulate them by making the correct social gestures that they have no comprehension of. You’ll also find that these folks have a consistent pattern of great success before great falls, but they’ll be right back up on top before a normal person would even get of the shock of it.

They’re really only possible to work for if you recognize that you as a person have no meaning to them, but you can draft in their upward wake if you make yourself a useful tool, and maintain enough distance to avoid getting dragged down when they crash.

Liz A. 01.30.09 at 12:10 pm

I think would enjoy your analysis.

Rogue Medic 02.01.09 at 2:29 pm

My first thought was, for a a $35,000 toilet, what do you use, when it is backed up. Since it is an ornamental toilet, that wouldn’t matter, but what is the appeal of an ornamental toilet?

Erica makes some good points about these leaders. Another is made by Nassim Nicholas Taleb in Fooled By Randomness, where he points out that we attribute their success to character qualities, but their failure is explained as a failure to stick to these character qualities. The reality is that many are just lucky, the stories of all who behaved the same, but were unlucky, are ignored in the worship of these lucky fools by less lucky fools. His more recent book, The Black Swan gives a great description of the problems with the banking system. It was written in 2006, when the banks were still doing well.

We have trouble differentiating between lucky, but dangerous people and competent, skilled people.

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