One of the odd things about popular history books, especially those covering recent events, is that the principal actors of the story are still alive. This presents a thorny problem for a writer—being sued for slander or libel—and generally when interacting with someone face-to-face they (almost always) engender some form of empathy. For David Foster Wallace, his Rolling Stone piece on following the McCain campaign trail (“Up, Simba!”) wound up being “not so much the campaign of one impressive guy, but rather what McCain’s candidacy and the brief weird excitement it generated might reveal about how millennial politics and all its packaging and marketing and strategy and media and Spin and general sepsis makes us U.S. voters feel, inside, and whether anyone running for anything can even be ‘real’ anymore—whether what we actually want is something real or something else.”
This is one way of approaching the problem—to essentially sidestep who the subject is as a person, and instead look at the crowd and the floodlights and ask what people think of a particular figure and why. Hunter S. Thompson did this in Fear and Loathing on the Campaign Trail ‘72, which (while ostensibly about the Democratic primary) also stretches to cover the manufacturing of scandal and the pack mentality of journalists, along with the strong conflict of interest in how they relate to candidates. On the other hand, there are what JG Ballard termed “Chain-saw biographies” in his review of Kitty Kelley’s Nancy Reagan: The Unauthorized Biography, which focuses on Nancy Reagan as a vain, histrionic, emotionally cold and purely irrational woman whose ruthless social climbing was propelled by frigidity (even towards her own children), a can-do attitude regarding the casting couch, and a manipulative streak a mile wide. What the book offers is an evisceration of the “greed is good” 80s, centering on a barely-human conflux of Darwinian Social climbing and the Mommy Dearest school of parenting. When applied to politics, this is an immensely gratifying style, stripping away layers of shmaltz to give us a view of a Nosferatu in designer clothes maintaining a facade of human emotions and values over an amoral center of corruption and salacious details of sex, drugs and other vices. In this sense, business should be a ripe topic for either school of writing, yet Barbarians at the Gate: The Fall of RJR Nabisco leaves its readers wanting, and before delving into the book itself I want to digress and talk about why.
Books about business can cover the business event itself, what the event means, and the loathsome people surrounding the event. Michael Lewis (author of Liar’s Poker, among other books) has made a career out of showcasing that the people involved in Wall Street are less erudite professionals and more grotesquely chauvinistic bullies motivated by greed and a playground-bully-level understanding of social interaction. He is also, in his book on Wall Street trading in the 1980s, insistent on the fact that the Wall Street bubble was unique in how “so many unskilled twenty-four-year-olds made so much money in so little time as we did this decade in New York and London. There has never before been such a fantastic exception to the rule of the marketplace that one takes out no more than one puts in.” In essence, his autobiography and analysis of Wall Street highlights the sophomoric nature of the people who involve themselves in high return finances. The people involved in this business are, in some way, the story in and of themselves—a sort of highly evolved parasite obsessed with wealth, status, and making a quick buck; immune to reflection, empathy or long term thinking. There is a reason that Donald Trump’s Trump: the Art of the Deal is less about any particular deal, and is rather about the dancer—inseparable from his dance—Donald Trump. And that reason is that finance is inherently somewhat boring, and a highly arcane and technical field on paper.
This is where Barbarians at the Gate falls apart: it tries to be a simple reporting of events, but gets caught up in false starts and moves in bits and spurts towards a crescendo that feels immensely drawn out. It tries to be a warts-and-all account of the people involved in a staggering act of greed and shortsighted bidding, but because Burrough & Helyar are reliant on the subjects of their book for access, they avoid being too cruel or too critical. The end product is a book that feels like someone telling you about a bunch of Sims being forced to simulate Wall Street culture. People are described in ways that highlight their tastelessness, opulent wealth and narcissistic self-absorption, but this is passed over without judgment. The book provides backstories for both businesses and individuals, but the reportage is dry and feels like the Horatio Alger story on a gargantuan dose of oxycontin: bland, flat and hazy. Everything seems sanitized and weightless, except for the comedic drama of a gaggle of bankers, lawyers, financiers and corporate boardroom members squabbling in a race to spend 25 billion dollars ($50,869,150,779.90 in today’s money, somewhere between the GDPs of Lebanon and Ethiopia in a single transaction) on RJR Nabisco. This is a group ripe for skewering—or at least highlighting absurd qualities—by Burrough & Helyar, but instead the principles are treated with, if not reverence, at least enough respect to where the only features of any particular character that come through in the narrative are the firm they are loyal to, their annual income, some absurdly expensive object they own, and (provided they are married) who their spouse is. The closest the narrative comes to a measure of judgment are flashes of self-awareness from various individuals involved in the deal and Henry Kravis’ near fight with Billy Norwich (a society columnist) at the Literary Lions party (an event so star-studded it features the Trumps, Kissingers and Jacqueline Onassis). Kravis calls Norwich an asshole and threatens to “break both his kneecaps,” which is commented on by a British attendee as “shocking”—“you would expect that kind of behavior at a low-life party but not at the Literary Lions” (361). And, to be clear, this is a book about loathsome people—let’s dive in.
Barbarians at the Gate is ostensibly a book about the leveraged buyout (LBO) of RJR Nabisco, engineered initially by Ross Johnson, CEO of the conglomerate, to raise the stock price of the company (something he was deeply unhappy with). Johnson launched a plan to construct an LBO of his company, assisted by Peter Cohen of Sherson, a firm desperate to produce an LBO and the associated fees. In his desperation, Cohen allowed Johnson to construct a package that included 2.5 billion dollars for him and other executives, and gave him veto power over Sherson when they took over his company via the LBO.* Kohlberg, Kravis, Roberts & Company cofounder Henry Kravis launched a competing bid and started a bidding war that drove the LBO price of the stock to over $100 a share (RJR was trading at about $50 a share). Kravis eventually wons the bidding war, and that is roughly where the book ends. Deals have an inherent narrative quality—the balancing act between the wants and needs of various parties and the backroom deals and backstabbing are gripping, and the characters involved in the negotiation can be interesting or have a compelling set of values or be so horribly loathsome that you root for them to fail. In a warts-and-all story, perhaps the ways that bribery, weird Illuminati sex games, or astrology motivate the deal might get thrown in too. While the second sort of narrative has never been built in, the Yalta Conference is a great example of the first (and i would be immensely pleased for a version of the second narrative about FDR, Churchill and Stalin doing mountains of blow while eating caviar and trashing a palace like some sort of heads-of-state hair-metal supergroup). The problem with the featured narrative of Barbarians is that there are no real extended negotiations as an edifice from which to launch this sort of narrative. Because what few negotiations there are almost immediately break down under the weight of enormous egos, this is instead a character-driven piece.
*LBOs are just absurdly complex and boring. The basic idea is that a bunch of people with real and fake money get together and buy a company, additionally using the company they are buying as collateral on the loan and paying off most of the loan by immediately auctioning off assets of the company (either spinning off subsidiaries to other companies or dissolving the subsidiary and selling all of its assets). This video sort of explains the process, but doesn’t delve into the fact that once you pay off the loan (and own all of the company or at least a controlling stake), the sale of the stock is often a huge profit (provided the price agreed to for purchasing a controlling stake is pegged properly—otherwise the crushing interest payments require you to declare bankruptcy, although the banks making bridge loans still collect their fees). Johnson wanted to raise the price of stock (and make a huge profit) while simultaneously avoiding cuts to the operating costs of things like his fleet of airplanes, which are usually junked in this sort of acquisition to increase revenues for debt servicing.
Driving this particular narrative is Ross Johnson, a man who rose from obscurity in Manitoba to obscurity at GE marketing lightbulbs to eventually become a sort of new-management type of leader, who utilized politicking, profligate spending and what was essentially bribery via quid pro quos with various board members to ascend from being the CEO of Standard Brands to the head of RJR Nabisco through a series of mergers and his capacity to take control of corporate boardrooms. Johnson’s overwhelming motivation is to be rich (or to enrich shareholders and members of the board so he can in turn enrich himself) and his business tact involves consistent reorganization of his companies because of an enduring belief that order breeds decay. Johnson’s management (what business books are ostensibly about, one way or another) is composed of luxurious spending and a fraternity sense of business order. I think I am supposed to be impressed that Johnson opens meetings with a question of “whose cock is on the anvil on this one?” (21) and see a contrast between him and his former boss at Standard Brands when he upgrades the building from linoleum and steel and waives a prohibition on first-class travel while netting himself a corporate jet and a company-owned Jaguar—that is apparently all intended to paint him in a positive light. Honestly, I’m baffled as to why I should enjoy spending a 516-page narrative reading about a man whose motivations are to hang out with professional athletes, acquire corporate planes and be well-compensated. While there is not a strong sense of character depicted here (other than that Johnson is the sort of person who supremely enjoys being rich and spreading money around), there is a strong sense of the sorts of things he likes owning. This is a man whose sense of interior decorating and company perks is well illustrated in the narrative. We get descriptions of how:
“RJR executives lived like kings. The top thirty-one executives were paid a total of $14.2 million, or an average of $458,000. Some of them became legends at the Waverly for dispensing $100 tips to the shoeshine girl. Johnson’s two maids were on the company payroll and Johnson’s lieutenants single-handedly perked up the upper end of Atlanta’s housing market. No expense was spared in decorating the new headquarters, highlighted by the top-floor digs of the top executives. The reception area’s backdrop was an eighteenth-century $100,000 lacquered Chinese screen, complemented by a $16,000 pair of powder blue Chinese vases from a slightly later dynasty. Visitors could settle into a set of French Empire mahogany chairs ($30,000) and ogle the two matching bibliotheque cabinets ($30,000) from the same period. In each was an English porcelain dessert service in a tobacco-left pattern ($20,000). The visitor might be ushered in to see Bob Carbonell and pad across his camel-colored $50,000 Persian rug. Or, if the visitor was lucky enough to see Ross Johnson, they could jointly admire the $30,000 worth of blue-and-white eighteenth-century porcelain china scattered throughout the office.” (92-93)
These objects are valued for their eye-popping monetary value rather than anything resembling historical significance or artistic style, yet they are still given a more meaningful core than human beings in this book. For Ross Johnson, this is best exemplified by his love of corporate aircraft. Johnson’s goal as the CEO of RJR Nabisco seems less to make money from selling cigarettes, Oreos or Premier cigarettes (smokeless cigarettes later sold as a smoking cessation method—Johnson’s own brainchild) but on accumulating a truly staggering number of corporate jets. This project involved him crafting “the Taj Mahal of corporate hangars” which included a quarter of a million dollars in landscaping, a 3-story atrium and almost a million dollars in furniture and artwork, and took up 27,000 square feet (making it fundamentally unsellable when the future owners attempted to auction off assets that provided no revenue stream)—on top of purchasing 2 brand-new aircraft valued at 42 million dollars. Johnson is thus only unique in his love of collecting corporate aircraft (as other individuals are by their love of limousines or artwork), contrasted with the more traditional corporate values of RJ Reynolds, a company that disliked ostentatious displays of wealth.* I think there is supposed to be a contrast between Johnson as a me-first businessman, loyal to himself and wanting to live the good life at corporate expense, vs. more traditional managers, who made their wealth from innovation and pluck and wanted to pass something on to inheritors. But this secondary plot doesn’t really go anywhere; we aren’t treated to a question about why there was a shift in the way that corporate management conceptualized itself, we’re just given the fact that it did (and, I guess, left to draw our own conclusions).**
*Also a company whose racism is glossed over pretty quickly? For example, the fact that a member of the family donated a “Whites Only” park in his name is essentially glossed over as, “welp, it was the South.”
** The last page briefly mentions how the founders of the companies which merged into RJR Nabisco would be deeply confused by the machinations of Wall Street, but less than a paragraph in a 516-page book isn’t really analysis per se.
This is really where a central problem of the narrative lies: the deal was (at the time of publication) a foregone conclusion, so the interesting narrative lies in the dueling bids of Kravis and Johnson (as the faces of their respective gaggles of people wishing to enrich themselves on fees via the buyout). Two other firms enter the race but quickly bow out (eating roughly 100 pages with their respective backstories and the details of their bids), which leaves us with the clear possibility of a book about some truly loathsome people seeking immediate gain via a questionable financial proposition—but Burrough & Helyar seem content to list people’s social calendars, occupational backgrounds and general wealth, and while everyone comes across as genuinely unlikeable, the lack of judgment on the authors’ part leaves everyone seeming sort of the same (it is impossible to keep track of who is who unless institutional affiliation is listed). And these are the sort of people who go to swell parties featuring a glorified landlord (Donald Trump) and a war criminal (Henry Kissinger), who enjoy being photographed with Ronald Reagan, and whose conspicuous consumption indicates less a sense of erudition than a gaping hole where decency goes. Skewering these people as egotistical, greedy, tasteless assholes would go a long way to make this a more interesting piece—the New York Times unfavorably compared True Greed, a book on the same topic, to Barbarians, on the grounds that the “prose of True Greed is clear and concise but uninflected; there is no tension, no climax. The RJR Nabisco drama is devoid of heroes, and one senses that Ms. Lampert does not share Mr. Burrough and Mr. Helyar’s enthusiasm for the narrative possibilities presented by avarice, malice and egomania.” Maybe this is a product of the era (the book was published in 1990), but outside of Johnson’s growing awareness (that, were this a novelization, would be basically the breaking of the fourth wall) of the absurdity around him, the book is absent any real judgment of the people within, deploying prose like:
“In the late seventies, with the proliferation of hostile takeovers, there rose a new breed of investment banker. They were mercenaries, warriors clad in $2,000 Alan Flusser suits, form-fitted Turnbull & Asser shirts, Bulgari watches, and Hermes silk ties from the airport shops at Paris and Brussels. To men like Shearson’s Tom Hill and to their cousins the takeover lawyers almost any takeover is a good takeover, for every takeover produces a fee. To say Wall Street’s merger advisers have shifting allegiances is a misstatement. They have no allegiances, period—except to their firms and themselves.” (187)
This is the sort of description that Bret Easton Ellis exploited in American Psycho, before having the elegantly-dressed* narrative focus do a bunch of cocaine, talk about the boring way in which he makes money and then murder someone or film himself having sex with prostitutes while watching The Texas Chainsaw Massacre. Instead, we are here treated to characters with amoral, selfish qualities which are treated as neutral facts of life. Occasionally, dialog seems like the authors are in on the joke (that these people are immensely hateable), when people utter things like “[interviews are what] you do when the deal is over… [a profile of the deal is] going to look like a bunch of silly fucking yuppies” (294). Or when Linda Robinson, basically a sane person who wants to merge the two takeover groups, sums up the entire bidding war as having “nothing to do with shareholder values or fiduciary duties. It was all a test of wills among an intensely competitive clique of macho, Park Avenue bullies in pinstripes” (311). Or when rival banks almost scuttle the deal in a fight over whose name goes on the left vs. the right of the announcement in the stock tables of The Wall Street Journal or the New York Times (326). This is the sort of material that could be spun into the story of how a bunch of cocaine-addled**, Ayn Rand-worshiping (by implication if not outright confession) children could create such an absurd, complicated financial mess.
*Fun fact: Ellis’s characters are literally dressed like clowns if you actually put together the outfits he describes.
**Technically, no one in this story is explicitly stated to be using cocaine, but the paranoia and aggression along with 72+ hours of being ambulatory would seem to imply its use.
The material for that story is in here: the escapades of Ross Johnson, who, worrying about the result of his German Shepherd attacking a security guard at a celebrity golf tournament, uses a corporate jet to fly the dog to another state so as to avoid potentially having the dog quarantined or euthanized. Kravis gauges where the board is leaning between the two bidding groups by having interns hang out outside of a bathroom and harangue people attempting to use the urinal about how the meeting is going. A man eats a gifted box of dog biscuits (a play on his nickname being “Mad Dog”) to impress people. A man temporarily traps another man in a revolving door as a sort of power play. People are dismissive about human cost issues involved in the transaction (such as how far an employee must be relocated before becoming eligible for reimbursement) because it is “chickenshit stuff.” A “shrewd negotiating tactic” is blowing cigar smoke in someone’s face. Even the people who are friends with Wall Street types find them to be loathsome—even Donald Trump (a man who never physically appears in this book but who is continually renting people plush conference rooms and showing up at parties) states in campaign speeches that “some of these people are horrible human beings. You wouldn’t have them to dinner. They’re vicious. They’re crude. They’re unhappy. They treat everybody badly. Who cares?” Everyone in this story is motivated by greed and self-aggrandizement—the ultimate crux of landing RJR Nabisco for either firm is to generate massive fees and have the distinction of pulling off a 25-billion dollar deal. The previously-mentioned Liar’s Poker describes how the greatest honor among bond traders was to be awarded the sobriquet Big Swinging Dick, and that this particular crowd finds replacing the contents of someone’s luggage with wet paper towels and calling phone sex lines on the intercom system to be the height of humor.* And I think that is ultimately the problem—while Burrough & Helyar probably have some great stories to tell about a bunch of people fighting over owning a company in order to be famous within the insidious world of Wall Street (almost all of them fairly openly loathe being profiled outside of it, because of the slightly-lesser value placed on greed in other media outlets), they are also journalists with the Wall Street Journal and probably would crater their careers if they just came out and stated that everyone they interacted with for the purposes of this story is, most charitably speaking, unimaginably awful to be around.
*Here is a Business Insider list of their top 18 moments from Liar’s Poker.
Ultimately, this book being written by journalists rather than an ex-bond trader makes for a bad narrative. The authors convince themselves that their readers are interested in the financial minutiae of an LBO, ignoring that no one involved understands or even seems to care about the whole process—other than a bit player who desperately wants people to read his WSJ editorial about why junk bonds are bad (maybe). They have nothing substantial to say about the shift of a workplace from someplace you devote yourself to (even if it can treat you callously) to a platform to seek personal enrichment (provided you are management—and they heavily assume you identify with management). People generally do not read these sorts of accounts to get better insight into the business world, but rather to get better insight into the scandal-ridden nature of Wall Street. There are interesting stories about unlikeable people buying expensive things and treating corporate aircraft like a family minivan, spending ludicrous sums on houses and cars and (hopefully) doing herculean amounts of cocaine and cheating on their spouses (another aspect of the weirdly sanitary nature of the narrative is that, even aside from the lack of drug use, no one really has a body other than to occasionally get married to someone else wealthy or go to a urinal and be pestered by someone’s subordinate). This is an attempt to make soap opera out of a playground dispute between children over what is mostly other people’s money, an attempt to add an air of gravitas around people screaming “fuck you” at each other repeatedly in fancy rooms over press releases that are only decipherable to a small esoteric cult. This is an attempt to humanize vapid people obsessed with joining elite country clubs, whose worst life outcome is being paid millions of dollars to be fired from a job they mostly spend hanging with golf stars and brainstorming terrible ideas. I hate the people featured in this book, and I hate this book for not giving me adequate fuel to ridicule their puerile antics.
Art by Rilo Harris.