Some FTX Data Points

Above is a screen shot from the evaluation of Sara Fisher-Ellison at ratemyprofessors.com . She is the wife of Glenn Ellison, the Gregory K. Palm Professor of Economics at MIT. Although she's listed as a Senior Lecturer in the Economics Department at MIT, as far as I can tell, this is not a tenured or tenure-track position, and in the sort of arrangement I discussed yesterday, she's on the faculty primarily to pad the compensation for her powerful husband. I quote from a student evaluation that dates from June 19, 2021, before the FTX scandal broke:

Very nice but can't teach. She makes a lot of mistakes and seems nervous. When she's solving a problem she often has to back peddle because she made a mistake, which leads to a lot of confusion. Biggest critique is that she doesn't show her work for a lot of the problems she works through. She does a lot of solving in her head... sorry not sorry

My experience from my brief academic career is that non-tenure track faculty are expendable, and an instructor with such bad reviews is usually not renewed after a limited number of semesters -- EXCEPT. The except is either if the instructor is female and married to a powerful male dean or tenured professor, or she is in bed with him. Barring evidence to the contrary, I've got to assume something like this is the case with the Ellisons. Her MIT faculty thumbnail is suggestive as well:

She has spent most of her career at MIT, but has also held visiting positions at institutions such as the Centre for Economic Studies in Munich, the Institute for Advanced Study in Princeton, the Hoover Institution, the National Bureau of Economic Research, and the Paris School of Economics.

So, why hasn't she advanced beyond senior lecturer at MIT if her vita is so astounding? Or indeed, if it would somehow violate MIT's ethics standards (cough, cough) to have two married tenured faculty in the same department, why couldn't she just move over, say, to Harvard or Northeastern or UMass or Tufts or Brandeis, just as examples, and get promoted there? I think the answer is pretty clearly that she's at MIT to collect baksheesh for husband Glenn and has nothing else to contribute anywhere.

Why would all those other prestigious institutions have her, an apparent mediocrity, as a visitor? Because Glenn could, at minimum, block peer review for publication by members of those other places, or alternatively, smile on their careers. This is also how their daughter Caroline, by all indications an airhead with neither talent nor social skills, got into Stanford and why Stanford professors would give her glowing recommendations.

Intriguingly, there is no ratemyprofessors entry for Glenn. Either he's so powerful, no graduate student would dare rate him, or he's so powerfu;, he can keep his ratings off the site.

Consider as well that the Ellisons, Caroline's father in particular, are prestigious authorities on economics, but now they're hovering in the background of a major financial scandal. In fact, the YouTube video below suggests that Caroline was likely selected by Sam Bankman-Fried as CEO of Alameda Research not because she was a whiz at finance but specifically because she was not up to par intellectually.

In other words, Caroline was quite possibly more like a special-needs child who'd never matched the hype that was built up for her. Certainly that's what you see in the video clips. What I hear is that since the FTX collapse, she's disappeared and can't be located. What role are Glenn and Sara playing in this phase of the story? They're going to have to turn her over when she's indicted or face felony charges on their own.

Another data point on which I've been musing is the actual short life of the FTX fraud. Looking at the broad outlines of Enron, it was founded in 1985 by Kenneth Lay. Jeffrey Skilling joined the company in 1990. Enron filed for bankruptcy in 2001. It took over a decade for the full range of the fraud tro develop. Bernard Madoff founded Bernard L. Madoff Investment Securities LLC in 1960:

In 1999, financial analyst Harry Markopolos had informed the SEC that he believed it was legally and mathematically impossible to achieve the gains Madoff claimed to deliver. According to Markopolos, it took him four minutes to conclude that Madoff's numbers did not add up, and another minute to suspect they were fraudulent.

Reported admissions by Madoff to his family indicate that his financial operations had always been a Ponzi scheme, which suggests he had evaded detection for 40 years. Yet somehow Sam Bankman-Fried managed to steal amounts comparable to Enron or Madoff only between 2019 and 2022, but the bubble popped within three years.

This is David Brooks's new American upper class. Heck, Madoff and Kenneth Lay were smarter. The Bobos aren't even good at hype.