"The Top Of Mount Stupid"

In the aftermath of the midterms and Trump's presidential announcement, the FTX scandal hasn't been a top story, even though some commentators are calling it worse than Enron. So far, in fact, nobody has noticed an odd coincidence that the scandal emerged within days of Elizabeth Holmes's sentencing for the Theranos hoax -- but both Caroline Ellison, the reputed queen of Sam Bankman-Fried's harem and CEO of Alameda Research, and Elizabeth Holmes were products of Stanford University.

I did a quick check; Stanford produced 11 Nobel laureates since Elizabeth Holmes was on campus in 2002, but it's worth noting that Ellison and Holmes must hold ranks equivalent to the Nobel Prize among famous financial hoaxers, up there with Bernie Madoff, Ken Lay and Dennis Kozlowski. Two of them in just a decade! Remember as well that Madoff, Lay, and Kozlowski didn't achieve prominence until they were well into middle age; Holmes and Ellison emerged meteorically when they were much younger.

But it's also worth noting that the Stanford Nobelists weren't undergaduates there; they were largely recruited to the faculty specifically for the Nobel prospects they'd developed in their careers elsewhere. Holmes and Ellison were selected for their unique adolescent promise via the elite-school admissions game and were home grown. And the elite-school connections don't stop there. Ms Ellison is the daughter of Glenn Ellison, the Gregory K. Palm Professor of Economics at MIT, and Sara Fisher Ellison, also an economist at MIT.

I have a question. If she's so smart, and indeed the offspring of such smart parents, how can the YouTuber at the top of this post credibly assert she's reached the peak of Mount Stupid? The video shows clips of her giggling sophomorically and making vapid remarks worthy of the most superficial Valley girl. Yet

Ruth Ackerman, a math professor who taught Ellison at Stanford 10 years ago, called her former student “bright, focused, very mathy” — a challenge, she said, to reconcile with Ellison becoming wrapped up in one of the largest alleged frauds of the past decade.

“The first I heard of the current controversy was when people started contacting me on LinkedIn, telling me to withdraw my endorsement of her skill as a computer scientist,” Ackerman told Forbes.

This carries echoes of Elizabeth Holmes, who also seems to have had a remarkable ability to con otherwise educated adults. As the Youtube psychologist Dr Todd Grande noted a few days ago at the time of Holmes's sentencing,

"Some people have called her extremely intelligent. One of her references said that she was the most intelligent person they had ever met, which means they need to get out more. . ."

There are similar questions about her collaborator, Sam Bankman-Fried. Although he himself went to MIT, his parents are Barbara Fried and Joseph Bankman, both professors at Stanford Law School, an odd mirror image of Ellison's background with both parents at MIT. Both are clearly products of the post-1960s American gentry class, and both appear to have risen with the help of enablers in the same class. Elizabeth Holmes's background is very similar:

Her father, Christian Rasmus Holmes IV, was a vice president at Enron, an energy company that later went bankrupt after an accounting fraud scandal. Her mother, Noel Anne (née Daoust), worked as a Congressional committee staffer. Christian later held executive positions in government agencies such as USAID, the EPA, and USTDA.

All of these notorious hoaxers come from the same prosperous, highly educated backgrounds, and we might almost say they were groomed for their roles throughout adolescence, with Holmes and Bankman-Fried attending prestigious private schools and Ellison attending the controversial Newton North High School, one of the largest and most expensive high schools ever built in the United States. All were treated as prodigies; Bankman-Fried attended Canada/USA Mathcamp, a summer program for mathematically talented high-school students; Ellison represented the US in the 2011 International Linguistics Olympiad (if you ask me, the whole field of linguistics is a hoax); Holmes's parents arranged Mandarin Chinese home tutoring.

These backgrounds are in remarkable contrast to Ken Lay, raised in poverty as the son of a Missouri Baptist preacher; Dennis Kozlowski, raised in a working-class Polish-American family in Newark, NJ; or Bernard Madoff, a Jewish working-class graduate of Far Rockaway High School with a spotty later academic record. Ivan Boesky, a contemporary of Madoff, had a similar background, although the crimes for which he pleaded guilty in 1986 were much less severe, and his reputation has faded.

The Stanford-MIT millennial fraudsters are instead products of what David Brooks in Bobos in Paradise calls the bourgeois bohemians, unlike the boomers and depression kids Lay, Kozlowsi, and Madoff, groomed and entitled from the start, though by no means polished -- and few of their peers had any questions. I'm still digesting this, but I'm wondering if the whole elite-school racket, which the earlier fraudsters avoided, has anything to do with it. David Brooks would likely deny it. Still, how come Ellison and Bankman-Fried look like they've ascended the to the summit of Mount Stupid, while the likes of Bernie Madoff, Dennis Kozlowski, or Ken Lay never came off that way?