The term “92ers” traces its origin to the fact that at the time Harvard considered eliminating its Dean’s List, 92% of Harvard undergraduates were on the Dean’s List! A Dean’s List is supposed to represent students who have gone above and beyond their peers, and thus merit some sort of special recognition. How could a Dean’s List comprised of 92% of students represent students who have gone above and beyond their peers? Does Harvard have a single class in statistics, or is anyone there even remotely familiar with the concept of a Gaussian distribution?* More significantly, and from the standpoint of the financial crisis, there seemed to be an enormous gap between all the plaudits received by Harvard undergraduates, with the enormous havoc they then wrought as Harvard alumni.
While Harvard has been singled out here, the concept of “The92ers” is applicable to the other Ivy League and “elite” schools whose alumni then provided the industrious idiocy that fueled the financial crisis. After all, Harvard alumni needed a lot of help to bring the financial word to its knees, and the Confederacy of Dunces proves they got it! However, the main animating factor of the financial crisis was not industrious idiocy. If it was, the problem with preventing another similar crisis would be much more tractable. Instead, the main animating factor of the financial crisis was based in human nature and psychological. The term “92ers” is designed to capture the human factors and psychological defects at the root cause of the crisis.
It will be a dominant theme of this website that it was all the unmerited praise they received as undergraduates - along with the enormous sense of self-importance that is obviously inculcated and nurtured at elite universities – that produced the human factors and psychological defects at the root of the financial crisis. What else could it be - but a completely false sense of self-importance and omnipotence - that allowed otherwise completely average people to confidently exert enormous influence over a future they couldn’t foresee, and to unleash forces they couldn’t comprehend? As the events and leading actors of the financial crisis show, the enormous sense of self-importance and omnipotence that lies at the core of many elite school graduates is both the distinguishing feature of - and common denominator among -the Confederacy of Dunces.
Here are just a few examples of how the elite university bred psychological defects of self-importance and omnipotence fueled the industrious idiocy that then fueled the financial crisis;
- President Clinton, and his housing secretaries, establishing an unprecedentedly high homeownership goal for the US, 67.5% - and to three significant digits no less!
- The Fed - exerting more influence over the economy than any tyrannical Soviet commissar ever did - and slashing interest rates to the unprecedentedly low level of 1%.
- The notion that a group of people – much less a group dominated by people with PhDs in economics - can set interest rates for the entire economy in the first place.
- The academic elite buttressing the financial elite by claiming that completely new, highly leveraged and difficult to value “derivative” investments increase financial stability.
- The belief - held by both the Fed and the academic elite - that the enormously complex US economy can be modeled with great accuracy by computer calculations.
- Wall Street’s belief that their enormous salaries are a reflection of the importance of Wall Street finance to the economy and the singular abilities of the people working in finance.
In the charts below, the Confederacy of Dunces have been disaggregated and organized by the schools that awarded them degrees. The first thing that jumps out – even before the sheer number of Ivy League degrees, 57 – is the number of Harvard degrees; 28! (Note - MIT is included with the Ivy League for discussion purposes here.) In the next blog post, we will review just what it is all these dunces do.
*The fully fraudulent statistical aspects of 92% of Harvard students making the Dean’s List - and then bringing the world to its knees when a huge fraction of these students went on to work in Wall Street, the Federal Reserve and government - will be discussed in an upcoming blog post.
04 MAY 2018