who are the real victims of the financial crisis?

I'm a little busy, but I figured I'd post 2 interesting articles providing interesting perspectives on the role of populism and merit in the financial crisis.

New York Magazine has an interesting human interest piece wondering if modern bankers are being victimized by the financial crisis:

A few weeks ago, I had drinks with a friend who used to work at Lehman Brothers. To her mind, extreme compensation is a fair trade for the compromises of such a career. “People just don’t get it,” she says. “I’m attached to my BlackBerry. I was at my doctor the other day, and my doctor said to me, ‘You know, I like that when I leave the office, I leave.’ I get calls at two in the morning, when the market moves. That costs money.”

Now, a lot of people in New York have BlackBerrys, and few of them expect to be paid $2 million to check their e-mail in the middle of the night. But embedded in her comment is the belief shared on Wall Street but which few have dared to articulate until now: Those who select careers in finance play an exceptional role in our society. They distribute capital to where it’s most effective, and by some Ayn Rand–ian logic, the virtue of efficient markets distributing capital to where it is most needed justifies extreme salaries—these are the wages of the meritocracy. They see themselves as the fighter pilots of capitalism.

My tendency here is to say, "Horsefeathers." (and not just because its fun to say.) If the elevated wages are justified because the efficient distribution of capital resulted in economic growth (and in the 80s and 90s it certainly did), why are the same employees not subject to paycuts when their companies' investments result in enormous economic contraction, so much so that many of these companies are, in fact, insolvent and dependent on government assistance?

On the flip side, Jeffrey Golberg in the Atlantic has a unique piece on the road ahead for the individual investor. Ignored in the grand scheme of the crisis is how a normal person making an average, or even above average salary should modify their investment plan. I'll just include a few salient quotes from the famous value investor Seth Klarman, whom Goldberg asks for personal investing advice:

“Everybody these days is a just-in-time investor. People say, ‘I’m going to leave my money in the market as long as possible, and then pull it out of the market just before I have to write the tuition check.’ But I think we’re seeing that the day you need to pull it out of the market, the market might be down 50 percent. It’s critical not to be greedy. Avoid leverage and don’t invest money that you can’t stand to lose. In the aftermath of this financial crisis, I think everyone needs to look deep within themselves and ask how they want to live their lives. Do they want to live close to the edge, or do they want stability?

Klarman went on, “Here’s how to know if you have the makeup to be an investor. How would you handle the following situation? Let’s say you own a Procter & Gamble in your portfolio and the stock price goes down by half. Do you like it better? If it falls in half, do you reinvest dividends? Do you take cash out of savings to buy more? If you have the confidence to do that, then you’re an investor. If you don’t, you’re not an investor, you’re a speculator, and you shouldn’t be in the stock market in the first place.”

I think its a pretty interesting perspective, if only because the common sense advice: don't invest money in the market that you need to keep yourself afloat on a short-term basis would have been extremely sound advice for the banks to take.

It's very interesting to me that populist anger is sort of pouring out from all political parties and economic classes, and everyone is trying to marshall populist anger for their own purposes (tea parties and lower taxes, government regulation and universal health care). But, can populist anger even be marshalled? And is stirring the pot necessarily a good idea? I'll let way, way smarter minds duke this one out: Suzanne Garment vs. Susan Lee! (Enjoy the 'comments' section in Susan Lee's article for the duel, pt. 2)