At the World Economic Forum in Davos, I realized I hadn't seen so much silver hair since the 5 p.m. early-bird special dinner at Le Rivage in Boca Raton, Fla. The presence of all these wizened professionals should have instilled a good deal of confidence. When you're trying to bring a massive tanker to port in stormy seas, the last thing you want to see is a 12-year-old steering the tugboat.
Yet in these turbulent times, Wall Street traders are behaving like toddlers. They're staging public tantrums, screaming and yelling and writhing on the floor until they get what they want. Since the markets began to buckle last summer, what traders want is interest-rate cuts and other government measures to bail out banks from reckless lending and disastrous investment decisions. In response, Federal Reserve Chairman Ben Bernanke has done what any exhausted parent does when a child screams for three hours straight: He gave in. In the past two weeks, the Fed cut interest rates sharply twice, taking the Federal Funds rate down from 4.25 percent to 3 percent.
Not bad, right? But Gross takes it to its logical conclusion, committing all the way. First, he interviews child psychologists on why giving in to toddlers is a bad idea. Then, he extends it. "Investment bankers—and the CEOs they report to—are the tweens of the system, plagued by attention-deficit disorder. As we speak, your typical Wall Street managing director is glancing at CNBC in his office, intermittently checking six computer screens, thumbing out e-mails on his BlackBerry, barking out orders to a personal assistant, all the while furiously working out on the elliptical machine." Davos, with its mix of economist brains, CEO jocks, and celebrity stars, is high school. And the U.S. Government? "[R]ather than force consumers, borrowers, and bankers to face the consequences of their own actions, Washington is functioning as a helicopter parent."
It takes wit to hit on a metaphor that's striking, knowledge to realize on one that's descriptive, wisdom to shape one that's prescriptive. But to run with it as far as you can go, without losing any of the virtues above, takes art and gusto. Well done, Mr. Gross. If you were in my freshman writing seminar, you'd get the gold star today.