If that memory seemed shockingly beside the point, Bloomberg, the unsentimental pragmatist, saw Kennedy’s death as a blip in the real history of his time. “It was like [the death of] Princess Diana, in that everybody thought the world had changed, and the papers were full of it, but a week later people go back to their own work, their own lives, and there was nothing changed, no matter what anybody says.”21
One of his teachers at Johns Hopkins, Willis Gore, recalled the youth’s transformation after a spring semester when Bloomberg got his usual C in Electrical Circuit Analysis. Suddenly, in the next semester he got the sixth-highest grade in class.22 Bloomberg sometimes explained that the shift into a higher gear came when he decided that, after college, he needed to go to graduate school. This was what Hopkins students did. They became doctors, lawyers, scientists, engineers; they were professionals.
There was another reason for this new intensity, of course. He was now the head of the Bloomberg family. His mother was strong, and she would go to work to help out; his sister would do her part, but he would be the man in charge. It would be another reason to head for the top. And for Mike Bloomberg of Medford, Massachusetts, that meant Harvard.
Years later, he said that although he got a degree in engineering, he knew he wasn’t ever going to be a great engineer.23 Being president of his class and head of the fraternity council and essentially running the fraternity world at Hopkins had given young Bloomberg a taste of management. Harvard was mecca for managers, at least in business. It would teach the finer points of running almost any enterprise. Also, it was just down the road from his mother in Medford.
* * *
“Somehow or other, I got into Harvard Business School. Nobody can figure that out, with this grade C average I got in. It was a clerical error, I’m sure,” he said to laughter during a speech to the business school years later. “But it turned out okay for the Business School as well.” (He would go on to give them millions for a library named after his father, a chair dedicated to philanthropy, and a $32 million grant for the business school to create a Cities Leadership Initiative to help mayors with their management skills.)24
When Bloomberg gave the commencement address at Harvard in 2014, a columnist for the Boston Herald looked back at Bloomberg’s grades in high school and college and wrote a column with the phrase “File Under: Not Wicked Smaht.” “If he were a college senior today, Bloomberg would be headed straight to the New England Tractor Trailer Training School, but things were a lot less competitive back then,” sniffed Gayle Fee about the ex-mayor’s middling grade averages in high school and college.25
Perhaps a “smahter” point would be that if Harvard Business School is not on the lookout for a Mike Bloomberg, maybe it’s time to rethink the admissions policies. The places that helped young Mike Bloomberg learn about the world—the Boston science museum, Johns Hopkins, and Harvard University—all fared extremely well after their ex-student became one of the richest men on the planet.
In almost any of Bloomberg’s versions of his life, Harvard gets a brief, almost dismissive mention. It was like punching a ticket on his way to the moneyed class. While the student world convulsed with protests and LSD and assaults on the establishment, Bloomberg had his head down. Did he sample the free sex? Of course, he told friends and later even some of his employees. Did he do drugs? Marijuana, a bit.26
But overall, Bloomberg’s years at Harvard were “well spent,” as he said later, learning the basics of business. Harvard’s methods were brutal. “There’s nothing as educational as the instantaneous feedback of a hundred classmates shouting you down when you’re caught unprepared or can’t justify a position,” he wrote.27 Anybody who worked for Bloomberg was wise to have that quote pop up when they turned on the computer in the morning. Bloomberg, as mayor, as businessman, as philanthropist, could be merciless when somebody came to him unprepared. City officials quaked when the mayor began to squint at their chart or printout of the latest data. The questions would be direct, and they seemed always to aim at the weakest point on the page. That was perfect Bloomberg, perfect Harvard.
Decades later, Bloomberg remembered a day when he had not read the daily assignment, a case study about a business problem. When the professor asked who wanted to talk about the details of the reading, Bloomberg figured that if he raised his hand, this particular professor would not call on him.
The professor called on him.
Bloomberg quickly moved into high gear: “I’m so thrilled that you called on me,” he remembered saying. “I want to thank you so much. It really is a great honor and a great experience to be here with all these smart people and have so many great professors like you, and I thought this particular case was so important you might want to ask others around the room to first lay it out and I would come and pull it all together and give it all the import that it really needs.”
Around the room, fellow students were rolling their eyes. Some were chuckling out loud. “It was so obvious that I hadn’t read the case. I had no idea what we were talking about,” he said years later.
So the professor gave him and the class the day off and told them to come back the next day with the right analysis.
“I had a moral issue that night, no, a risk-management issue. There was no reason if this guy was smart that he was going to call on me the next day, because he would have known I had read the case. So did I have the balls to not read the case?”
He read the case.
It was about the Masland carpet company, which had warehouses and showrooms around the country. Young Mike told the class that he would recommend that the company close the warehouses and just have showrooms and ship from one place.
“This was before FedEx and DHL,” Bloomberg recalled. And when he laid out his plans, “they laughed at me, literally laughed at me.” The professor told him it wasn’t very practical, not smart, Mr. Bloomberg.
Some time later, the professor came into the class with a newspaper tucked under his arm. “I guess we owe Mr. Bloomberg an apology,” he said. Masland had decided to consolidate its warehouses and keep its showrooms. Bloomberg, who clearly loves these stories that show him besting the established wisdom, was so thrilled he was still telling the story a half century later. Even so, he always added at the end, the professor only gave him a passing grade, nothing special.28
If Harvard’s technique provided him a “superior” but not “outstanding” education, as he described those years, it gave him the first brush with big names. He later laughed about his misspent awe as a student, but throughout his business and political years he also would court and clearly enjoy being around the rich and famous. “Embarrassingly, I remember being more impressed by whom I was matriculating with than by their abilities. As a kid from working-class Medford, never before had I met people as close to the limelight,” he wrote years later. Just as quickly, however, he dismissed these heirs to the bold names of the day. “Did I think they’d rise to the top just because their dads did? (Generally they didn’t.)” Few of their companies would even survive by the end of the century, he added.
“The bullshitters faded away,” he said.29
When Harvard asked him to give that commencement address, the Harvard Crimson chastised those on campus who wanted to stop Bloomberg from speaking. Bloomberg had just left city hall, and some students objected to his police commissioner’s overuse of stop-and-frisk policies in black and Hispanic communities. The Crimson editors rallied. “Michael Bloomberg is not a dull choice, and that reality is part of what makes him somebody worth listening to,” they wrote. “It would be far more troubling if the University chose someone who would deliver a milquetoast speech, devoid of both substance and controversy.”30
Bloomberg did not disappoint the Crimson editors or most of those in the audience. The New York Daily News headline about the speech read “Mike in Harvard Rant at Ivy Liberals.” He compared the intolerance of some in New York City who objected when a Muslim group wanted to build a community ce
nter near the World Trade Center site to those at American universities “where the forces of repression appear to be stronger now than they have been since the 1950s.”
He called out college campuses, “including here at Harvard,” for a requirement that scholars were funded only if their work conforms to a particular, often liberal or progressive, view. “There’s a word for that idea,” he said. “Censorship. And it is just a modern-day form of McCarthyism.”
He was talking about how students had protested speeches from former secretary of state Condoleezza Rice and also from his police commissioner, Ray Kelly.
“Today, on many college campuses, it is liberals trying to repress conservative ideas, even as conservative faculty members are at risk of becoming an endangered species. And perhaps nowhere is that more true than here in the Ivy League.” And, later, “A university cannot be great if its faculty is politically homogenous.”
The dignitaries in their multicolored regalia began to shift on the platform behind him, their demeanor ranging from uncomfortable to angry. Perhaps if Bloomberg had been a Rockefeller or a Kennedy or one of those rock-ribbed families that felt Harvard was right up there with the best clubs and the cushiest seats in heaven, he might not have chastised those who ran the place. Not openly, at least. But Mike Bloomberg hated to miss a chance to make a stir and an important point.31
During Bloomberg’s own Harvard days, of course, the campus was full of rage and debate, especially about the Vietnam War. Again, he did not participate. Bloomberg faced the draft when he graduated in 1966, and he has said he wanted to be an army officer, perhaps in an engineering arm of the military. He was rejected, he insisted later, because he had flat feet. Flat feet always seemed like a privileged-class ailment to keep the select few from marching to war with the less fortunate. And years later, when writer Joyce Purnick questioned how such a minor problem could get such a major exemption during the Vietnam era, Bloomberg angrily took off his shoes and socks and displayed how his arches had failed to arch.32 Those feet earned him a 1-Y medical deferment in 1966, which meant he would only go to war in a national emergency. (It was the same deferment that President Donald Trump received in 1968 for “bone spurs.”)
Over the years he learned to convert his relief about missing the military into humor about his physical deficiency. He said that he and the draft board had a pact—if he didn’t call them, they wouldn’t call him. Instead of Vietnam, the youth with a new MBA moved swiftly to New York City, where he could begin to enjoy the money scrums of Wall Street.
3
THE SALOMON BROTHERHOOD
“Hey, Harvard. Get me coffee.”
When Bloomberg graduated from Harvard Business School in 1966, there was no army of ambitious young people rushing to earn the easy gold on Wall Street. The few who strayed into the financial world in those days favored the dignified white-shoe firms or started working for Daddy. Selling stocks and bonds like a peddler was grubby, beneath their old-moneyed class.
In contrast, young Bloomberg had already established that he loved selling. The Christmas wreaths in Medford were a first taste. As a Harvard student, he had worked in a small real estate firm, outselling the regulars, as he told it, because he always arrived early and answered the phones to grab new clients before the rest of the staff had poured their first cup of coffee.1
One of Bloomberg’s Harvard pals suggested that the indefatigable young Mike should try Goldman Sachs or a small family-controlled bond trading firm called Salomon Brothers & Hutzler. Both firms jumped at the chance to bring in a young Ivy grad who was just as eager to learn the selling and trading side of the business.
At Goldman, Bloomberg was interviewed by Gustave Levy, a big-name arbitrageur and philanthropist, one of the lions of Wall Street in his day. Goldman offered him $14,000 a year, a good salary even for a Harvard graduate. At Salomon, Bloomberg met three people including John Gutfreund, the number two man in the firm. He would become known as the “king of Wall Street” in the 1980s before he was forced to leave in disgrace over a treasury bond scandal.2 Most important, during his tour of Salomon, Bloomberg started talking to a man named Billy, who was “just some easy to talk to, nice person.”3 That “nice person” turned out to be William R. Salomon, managing partner of his family’s firm.
Nearly fifty years later, Bloomberg would speak at Billy Salomon’s funeral. The address that went out to the media was solid and respectful, but at the end of his eulogy, Bloomberg’s voice softened as he talked about how Billy was “more than a mentor, almost like a second father to me . . . And maybe somewheres [sic], my father is now saying to Billy, thank you for all you did for my son,” he said, his voice breaking up. “And I say it, too. Thank you, Billy, I couldn’ta done it without you.”4
What makes that moment so unusual for Michael Bloomberg was that he had spent most of his life carefully hiding that soft side. He could blow up. He could joke. He could be tough and mean and crude. He could be generous and loyal. But soft? Michael Bloomberg didn’t really do soft, at least not publicly.
When the young Bloomberg took the job at Salomon, Billy was one of the reasons, and he settled for less—$9,000, plus a $2,500 loan. Even with the Harvard stamp of approval, he started in the business like everybody else at Salomon—in the vault. “We slaved in our underwear, in an un-air-conditioned bank vault, with an occasional six pack of beer to make it more bearable,” he recalled. “Every afternoon, we counted out billions of dollars of actual bond and stock certificates to be messengered to banks as collateral for overnight loans.”5 In the mornings, when the stack of documents came back, Bloomberg and his comrades in “the Cage,” as they called it, made sure they were counted in the firm’s inventory.
After a few months sweating at the firm’s lowest level, Bloomberg became a clerk, “putting little paper slips in alphabetical order, all day long.” It was so humiliating that Bloomberg said the reason he didn’t quit was that he was “too embarrassed” to say what he was actually doing at Salomon. He told his Harvard friends, many of whom had offices by then, private offices with windows and carpets, that he was “studying methods and procedures to simplify the work flow.”6 Within a year, he was a real clerk at the utilities desk on Salomon’s trading floor, where he stamped and recorded trades. It was a move up. Barely.
As Bloomberg watched the Salomon methods in his agonizingly slow rise up the company ladder, he witnessed an operation that would soon be as antiquated as the rotary telephone.
Sales only felt real in those days if they were on paper, and those valuable certificates had to be walked across the street to the bank for the night. After the markets closed, a small army of couriers, older men, often ex-cops smoking cigars and looking like nobody to mess with, carted the evidence of the day’s trades from brokers to the banks. In 1968, Bloomberg and his colleagues encountered the “Paperwork Crisis,” a crucial moment on Wall Street, when the sheer volume of paper overwhelmed the markets. At that point, about 12 million shares changed hands every day (compared to about 900 million a day by 2015), and the back offices (and the boys in the bank vaults) were swamped. The stock exchange eased the crisis by restricting trading to four days a week with some firms closing early to catch up and some going out of business because of the confusion in the back office.7
Meanwhile, Mike Bloomberg had been trying to escape that daily paper storm and was growing tired of waiting for his chance to be a real-live broker. He seethed about being the butt of anti-Harvard antics by the golden boy traders. “Hey, Harvard, get me coffee.”8 Enough with the fraternal hazing, enough with the petty, monotonous shuffling of paper and running errands. One day, Bloomberg simply cracked. His job was to sharpen pencils and place them carefully on traders’ desks—six number 2 pencils on one and six number 3 pencils on another. Instead, that day he furiously broke the lead tips off the ends of the prescribed pencils, and one trader who saw the pencil carnage on his desk started screaming that Bloomberg should be fired. To Bloomberg’s relief, he was s
oon moved out of that trader’s line of vision—to the equities desk, where, as it turned out, he belonged.9
Robert Quinn, a colleague from the same era, recalled Salomon’s utilitarian offices at 60 Wall Street where Bloomberg would have suffered his initiation rites. “There was a team of seven or eight calculators—mostly mature women—who [recorded] the trades,” he said. “They were handwritten on pieces of paper, carbon copies, then sent down in a little basket between floors on a rope.” There were runners, mostly young women who ran to help when a trader yelled “Wire” so that a trade could be registered and handed to a cluster of telegraphers. And the women who had calculators “punched a lot of buttons, they were very adept at it. They had to calculate the interest on the bonds and the value and they were very important to the process,” Quinn recalled. “And they were lovely ladies.”10
There were spittoons in those early days, and the smell of sweat and cigars could be overpowering as the trading day reached its daily climax. The noise level in “The Room” was deafening, and there was no real noise buffer, and each day, the decibel level rose as traders vied for who could yell the loudest. “Visitors to the balcony over The Room were often astonished by the zoolike roar that rose from the floor when, for example, the Federal Reserve came into the market at 11:30 in the morning.”11
If Salomon’s pit was a big, open ear-splittingly noisy warehouse, Bloomberg and his colleagues fed on it. And even as the computers slowly made that open room less like an open bazaar, it would be a floor plan that Bloomberg would adopt for his businesses and city hall.
As Salomon Brothers (often, “Solly”) grew to become one of the most powerful financial houses on Wall Street, the language of the trading floor would still raise eyebrows at a truck stop. “Fuck you” was a way of saying hello, as one veteran of the Salomon floor explained. Or as another alumnus put it, “The word ‘fuck’ at Salomon Brothers was a way to take a breath.”12 Everybody was a target—too tall? Too short? And women had to be tougher than any of them. One Salomon alumnus recalled that often he would see an older woman reduced to tears by some young, foul-mouthed trader engrossed in the risky trade of the day.13 But it was addictive, a kind of “greed-speed,” a money-rich high that infected almost everyone who worked on the trading floors in those days.
The Many Lives of Michael Bloomberg Page 4