Bobos In Paradise, Impostor Syndrome, And Affinity Fraud

At the end of yesterday's post, I said I was still mulling over the question of how the latest crop of famous white-collar crooks had suddenly sprung from the authentic American upper class, or at minimum the prestigious gentry represented by Ivy League faculty, when their earlier equivalents like Ivan Boesky. Jeffrey Epstein, and Bernard Madoff had been middle-class Jews or other ethnics who'd gone to public school and often hadn't finished college.

I'm nowhere near done with that task, but I think I've found three directions from which to approach the problem, outlined in the title here: bobos in paradise, impostor syndrome, and affinity fraud.

The first refers to David Brooks's ploddingly obtuse 2000 book, Bobos In Paradise: The New Upper Class and How They Got There. Its thesis in brief is that the Ivy League and other top-level universities were traditionally bastions of wealth and privilege, but after World War II, for reasons Brooks never quite explains, they dropped Jewish quotas, adopted the Scholastic Aptitude Test for admission, became selective with a wave of new applicants in the 1950s, and turned the US into a meritocracy. Just like that!

One of my favorite topics over the years I've been blogging has been how the Ivies never did any such thing. I revisited the topic in this post from 2021, where I asked why I found, once I arrived at Dartmouth in the fall of 1965, that so many of my classmates, guys of 17 or 18, were already superficial, psychologically disturbed, alcoholic, or drug dependent. One answer I came up with in that post was that a remarkable number had come from prestigious prep schools, where they'd already gotten that way, which was simply to say they were rich kids from the upper class. As a public school kid in the early 1960s, I knew nothing about marijuana; as soon as I got to Dartmouth, I was encountering experienced stoners from private schools, where the problem was already well established.

Huh? I thouight the SATs would have weeded those guys out and replaced them with achievement-oriented middle-class public school boys -- or did David Brooks have this all wrong? The short answer is, of course, yes, David Brooks had it all wrong. The table at the top of this post illustrates another approach to the same problem, that across the Ivy League, an applicant's chances of admission are three or four times greater if the applicant is a legacy, i.e., someone whose parent or other relative is an alumnus of that school. Harvard, at the top of the table, accepts 40% of legacy applicants, but only 11% of non-legacies. Thus Alissa Heinerscheid.

I've already cited many times Berkeley sociologist Jerome Karabel's 2005 The Chosen: The Hidden History of Admission and Exclusion at Harvard, Yale, and Princeton, which goes into detail on the many other paths by which the Ivies and equivalent prestige schools jigger their admissions to favor generational upper-class wealth, newer money, and political influence. He outlines how admissions offices categorize applicants into "baskets", which can include legacies, graduates of favored prep schools, offspring or proteges of major donors, and recruited athletes -- remembering that Ivy athletes are recruited for sports like rowing or lacrosse, for which only prep schools normally have programs.

Karabel's point is that prestige-university admissions policies have never been meritocratic, so why is anyone objecting to new policies that privilege minorities in admissions? That's an intricate question. Writers like Alan Dershowitz maintain that the Ivies never actually dropped Jewish quotas, they just disguised them by favoring middle class walk-on applicants from outside prosperous suburbs while continuing to admit rich WASP legacies and preppies. More recently, Asians complain that policies favoring politically correct minorities discriminate against their expectations for merit-based admissions.

While the Ivies have recently been providing -- or have been forced to provide -- glimpses into just how many applicants from their traditional market of old family money continue to be admitted vis-a-vis achievement-oriented public school students, espeically those from Jewish, other ethnic, or Asian backgrounds, the actual total numbers and percentages are still a closely guarded secret. My 2021 post above linked to an Atlantic article that said that from 25 to 30 percent of Ivy entering classes are from prep schools, but this leaves out other "baskets" like legacies, politically correct minorities (who segregate themselves once they arrive on campus), and offspring of other favored groups like politicians, celebrities, and major donors. My surmise is that those from outside these "baskets" are actually a minority in Ivy entering classes, and that this is apparently a deep secret reinforces my impression.

Thus David Brooks's "bobos", the bourgeois bohemians that form a "new upper class" are pretty much the old upper class that has remade itself in the image of a meritocratic, selective Ivy League that's been a fiction from the start. An Ivy degree since the 1950s has been marketed as a seal of approval, a sign that someone has advanced on merit, when a substantial portion of those with such a degree have been skating on the prestige of a much smaller number of achievement-oriented and talented students and graduates, while the skaters themselves continue to be the same old dilettantes, idlers, drunks, druggies, psychopaths, and psychotics.

But this brings me to the next head of my discourse, impostor syndrome:

a psychological occurrence in which people doubt their skills, talents, or accomplishments and have a persistent internalized fear of being exposed as frauds. Despite external evidence of their competence, those experiencing this phenomenon do not believe they deserve their success or luck. . . . they may think that they are deceiving others because they feel as if they are not as intelligent as they outwardly portray themselves to be.

Alissa Heinerscheid, in the wake of the Dylan Mulvaney fiasco, has scrubbed much of her social media, but I recall soon after the episode first broke that she said in an interview that she herself suffered from impostor syndrome. As I recall, she reported that once in a corporate environment, she found herself surrounded by marketing geniuses, and her own capabilities would never measure up. I think this is the inevitable result for Ivy types who skate into prestigious corporate positions based on their Ivy degrees, when quite a large proportion of these are awarded to people who were never qualified for admission to their undergraduate, graduate, or professional programs to start with -- and based on the record we have, this included Ms Heinerscheid and likely her Harvard graduate lawyer father as well.

But let's recall that nobody at Bud Light thought to double-check Ms Heinerscheid's choice of the agency-sponsored program that featured Dylan Mulvaney as a brand partner. One may certainly argue that Ms Heinerscheid herself never dreamed up the Mulvaney campaign or the can with their face on it, but she looked at the pitch from the agency and approved it, because she didn't have a clue -- she just thought it might be the non-fratty sort of thing she thought would fly. And her peers and superiors, right up to Harvard MBA Brandon Whitworth, greenlighted the choice. Because all of them came from the same Ivy environment, and like so many of their Ivy forebears, none of them had a clue.

And this brings me to my last point, affinity fraud:

Affinity fraud is a type of investment fraud in which a con artist targets members of an identifiable group based on things such as race, age, religion, etc. The fraudster either is or pretends to be, a member of the group. Often the fraudster promotes a Ponzi or pyramid scheme.

The best known affinity fraudster up to now was Bernard Madoff,

Madoff’s victims were not a random assortment of the well-off; he decimated a segment of the wealthy Jewish community and several Jewish charitable organizations.

Such crimes would not have been possible without the cultural ease and social entre Madoff enjoyed in the Jewish community. To put a name on things, this was one of the worst affinity frauds in Americans history, whereby unscrupulous people exploit their cultural connections and people’s communal identities to rip them off. In that sense, Madoff’s crimes were a warning to everyone about how in-group feelings of trust leave people vulnerable.

What we've seen with FTX, Theranos, and OceanGate has been an Ivy-based version of affinity fraud. A similar dynamic operated with Alissa Heinerscheid and Bud Light, whereby a widespread clique of Harvard and Groton alumni assumed everyone else knew what they were doing because they were from Groton and Harvard, whether or not any of them individually had any confidence in their own abilities -- thus corporate disaster. Elizabeth Holmes exploited a veneer of cultural ease and social entree she'd picked up at prep school to bamboozle a remarkable meagerie of the US upper class into joining the Theranos board and both endorsing and protecting the swindle.

Stockton Rush's target market was something very like the traditional Ivy population, rich, well-traveled dilettantes, skewed perhaps toward a proportion of nouveau wannabes. The world is very slowly coming around to a recognition that this was somewhere between an impossibly hamartic overextension on Rush's part and an outright con, but the efforts he made deliberately to avoid any type of independent review, regulation, or certification for his subs suggest it was closer to a criminal enterprise that he knew, as Madoff also knew, was bound eventually to collapse.

The odd thing is that Sam Bankman-Fried, Caroline Ellison, Elizabeth Holmes, and Stockton Rush either felt the need to, or simply had to, rely on authentic Ivy credentials to perpetrate affinity frauds on the wealthy, when earlier outright frauds like Jeffrey Epstein and Ivan Boesky had no need to do this. But this is just one among the many puzzles I still see in this story.