It’s too soon for euphoria, to be sure, but even the possibility of a change at the top of the Whitney is the best news the New York art scene has had all season. Clearly the museum is at a crossroads. It can either continue to be what Tom Armstrong has made it into—a bazaar specializing in fads, fashions, and art-market promotions, an institution devoid of serious standards—or it can be turned into a museum that commands respect because of the stringent aesthetic values it espouses and the distance it enjoys from the commercial hurly-burly that now disfigures so much of the New York art scene. Which is to say, it can either remain part of the problem that we face or become a leader in finding the solution that we so desperately need.
JANUARY 15, 1990 BY ALFRED KAZIN
UNDRESSED COCKTAIL PARTY: WHEN VIDAL AND MAILER COME FOR DRINKS
I HAVE BEEN WRAPPED UP FOR days in The Writer’s Chapbook, a delicious book put together by George Plimpton from the long-standing Paris Review interviews with leading American, British and European writers of the century rapidly coming to a close. The book puts them all in New York, babbling away at George Plimpton’s house at the end of East 72nd Street.
Tennessee Williams, poor guy, is explaining, “I try to work every day because you have no refuge but writing.” Adds that he has to drink wine in the morning in order to get going. This annoys the French novelist and poet Blaise Cendrars, who in a Paris Review interview not sufficiently used in this selection, says writers exaggerate the difficulties of writing in order “to make themselves sound interesting.” Writing is a privilege, Cendrars thunders, “compared with the lot of most people, who live like parts of a machine, who live only to keep the gears of society pointlessly turning.” With a curl of the lip he tells Norman Mailer (who is too busy talking to Virginia Woolf to hear anyone else) that the greatest danger for a writer is to fall victim to his own legend.
Illustrated by Barry Blitt
JANUARY 29, 1990 BY CHARLES V. BAGLI
The Night Wall St.’s Kings Romp with Princes in Drag
THE TUMULT BEHIND THE doors of a room on the first floor of the Plaza Hotel threatened to rock the glass chandeliers in the plush hallway.
Suddenly, silence. Then a door was flung open, emitting a procession of husky men, dressed in skirts, dresses and pumps. The hair from a long-haired wig hung between the massive artificial breasts of one man. Glamorous “hostesses” directed the group toward the Baroque Room, where scores of men dressed in tuxedos. A convention of transvestites?
A bachelorette party? The filming of Animal House II?
‘A Good Time’
None of the above. The gaggle of bewigged and bedressed men were “neophytes” being initiated into Kappa Beta Phi, a secret fraternity comprised of some of the most powerful and celebrated figures in the world of business, finance and law: Felix Rohatyn, Lazard Freres & Co.; William R.. Saloman, Salomon Brothers Inc.; Arthur Levitt Jr., former president of the American Stock Exchange; George L. Ball, Prudential-Bache Securities; Peter A. Cohen, Shearson Lehman Brothers Inc.; John F. McGillicuddy, Manufacturers Hanover; Stanford I. Weill, Primerica Corporation; James D. Wolfensohn, chairman of the board of Carnegie Hall; Joseph H. Flom, Skadden, Arps, Slate, Meagher & Flom; Martin Lipton, Wachtell, Lipton, Rosen & Katz; Robert E. Rubin, Goldman, Sachs & Company; E. Gerald Corrigan, of the Federal Reserve Bank of New York; John S. Chalsty, Donaldson Lufkin & Jenrette Inc.
Grand Swipe & Grand Smudge
To some, fraternity is simply “a good time,” an opportunity to let your gray hair down among your bothers. Others say Kappa, like Bohemian Grove in California and similar men’s clubs, aids and abets social cohesion among the elite, to the exclusion of women, African-Americans, Latinos, Asian-Americans. Indeed, among Kappa’s 226 frat brothers there are no women, no African-Americans, no Latinos, and no Asians.
Founded during the Depression, when some “brothers” were tossing themselves out office windows, Kappa Beta Phi has a simple Latin motto: Cantamus et Biberamus, We Sing and We Drink. So what do they do? A reporter was barred from further investigation at Kappa’s 58th annual dinner Jan. 18 by a frat brother from Chicago who stood at the entrance. Over the next several days, two dozen Kappa members contacted by The Observer were no more forthcoming. “You have to talk to the Grand Swipe,” said Frederick A. Kingenstein of Klingenstein, Fields & Company, who is a member of the frat’s Grand Council. “I don’t talk to the press. It’s against my religion.”
“I don’t know how you found out about it,” said 1989 Grand Swipe E. John Rosenwald Jr., 59, vice chairman of Bear Stearns & Co.. “We really don’t like publicity. It’s a secret organization, and we like to keep it that way.”
One Kappa Beta Phi member did agree to talk about the frat at some length but requested anonymity. In preparation for the annual dinner, the neophytes, or pledges, compose skits, songs or poems that are both ribald and barbed paeans to their firm, chairman or colleague. Dressed in tutus, dresses or even as cops and robbers, the men are paraded into the annual meeting during the cocktail hour. Hostesses, who are hired for the occasion and in some years are “scantily clad,” the source said, mingle with the brothers, who are dressed in black tie.
When the performances begin, all hell breaks loose, with the audience pelting the performers with food. The source said: “I think the story is just the fact that the elite of the business community in New York carries on like a bunch of fraternity members, throwing food, hooting and howling, jeering, while their colleagues put on a performance that’s outrageous.”
“The men proceed to make fools of themselves,” explained Pat Hill, who was hired through Charles V. Ryan modeling agency and has served as hostess at a number of Kappa dinners, including this year’s. “Let’s just say some men never grow up.”
OCTOBER 26, 1987 BY MICHAEL M. THOMAS
THE MIDAS WATCH: Drop of the Dow: Bulls Spooked, Herd Stampeded Out of Control
HOW DEADLY IS THE CANKER IN THE ROSE? IS THIS the beginning of the end or merely the end of the beginning? As this is written, the Dow has plunged over 800 points in four sessions. Is the greatest financial party in history over—or about to be?
My own guess is that we’re getting there. I can’t say I base my conclusion on experience: I wasn’t born in 1929, had other things on my mind in 1958, was marginally involved in Wall Street in 1974. I claim no acute knowledge of Prechterian fiscal thermodynamics, nor of the relationships between bond and stock prices so artfully and convincingly elaborated by my learned friend Alfred Malabre in The Wall Street Journal. Indeed, if pushed to the wall, I must need confess that my conclusions on the matter are compounded as much from schadenfreude as from ratiocination, as much from a visceral wish that the ungodly get theirs (always less than one would like) than from sweet reason.
Still, I’ve read a little history and the portents seem to be there. It’s all rather like Macbeth: Someone casually mentions that the brindled cat hath mewed thrice, and before you know it, the whole damn castle’s fallen down. The thing is not to look primarily for specific cyclical or typological parallels to earlier crashes. Some of these are certainly on hand. The gratifying news that the collective wealth of the Forbes 400 advanced 41 percent last year must certainly comfort those who see “1929” writ in the tea leaves of wealth concentration. That’s just one example. For my own part, I’ve been wondering for some time just how long we could leave a trillion dollars of pension fund wealth outside the tax orbit and viably finance the economy.
Every man’s entitled to choose his own portents. The markets like things simple—no surprise that, given the intellectual equipment of those who man them—so right now they’re zeroed in on the trade figures. Big deal: Two years ago, interday trading swung on interest rates; before that, it was M-1. Markets don’t cause crashes, markets crash. Leading indicators do little more than lead.
For Small Minds
Excessive reliance on specifics, factual parallels, is a foxhole for small minds. What counts in the meaningful examination
of history are structure and the zeitgeist, something we were taught at Yale, before that institution dedicated itself simply to providing vocational training for future options brokers.
Here things start to get interesting. I’ve been researching a Wall Street novel that will run from 1924 to 1990, which has taken me into unfamiliar territory as regards to 1929, and jiggled my memory with respect to 1974. I’m not going to go into a catalogue of structural equivalencies, but here’s what I think happens in a crash. You can decide for yourself whether it applies to the present.
Markets exist to line the pockets of those who purvey them, so inevitably they evolve in the direction of excess, in the penultimate stages of which “catchpenny schemes,” as the great economist Charles Kindelberger has called them, flourish with a vengeance. If fueled by vast quantities of essentially purposeless, indeed almost disembodied, liquidity and credit, this evolution can be nothing short of spectacular. Witness the fact that Avis seems to change hands every week at exponentially higher prices.
Now the fun begins. As the price of pieces of paper rockets ever higher, increasingly detached from economic and political reality—and a sine qua non of every collapse is that things in the real world ain’t as good as the securities markets make them seem—an unspoken disquiet creeps forth on the face of the land. Can something indeed be rotten in the state of Denmark? No one says anything, but respectable men are seen to edge closer to the door. Disquiet becomes unease; that rankness once so faint in the nostrils now stinks outright, is given sporadic confirmation by events verging on the grotesque, such as “Makeover-of-the-Century,” Asher Edelman’s attempt to convert his Columbia Business School students into finders (and to chisel them, at that). Piece by piece, prop by prop, the psychological stage is set. Without being quite sure how it got there, the market finds itself all on edge; not the slightest prod—in 1929, a speech by Roger Babson; in 1987, the trade numbers—causes it to jump like Don Knotts, a reaction which worries it further.
What happens at the next prod, or the one after that, all depends. It may be that structures have grown in place that guarantee a retreat becomes a rout, in which case you get a 1929, instead of the slow bleeding of 1974. Do you prefer cancer or a heart attack? Most of us have seen or read enough Westerns to know that there’s something in the souls of cattle that makes them spookable, sets them stampeding out of control for no apparent reason. It seems to be the same with markets; each bull market evolves its own particular susceptibility to stampedes. In 1929, margin loans and calls set the snowball rolling out of control. Are there 1987 equivalents? Well, program trading and electronic fund redemptions come to mind. What about Japan? To every man his own demon.
If I was tending the herd, I’d be right restless. Not least because Wall Street seems to be pulling in its horns, in the manner of a host packing up the crystal and the china and the good Scotch, leaving his own party, happy to let the drunken fools trash whatever’s left, because after all, the place was only rented, and with their own money.
* * *
Most of us have seen or read enough Westerns to know that there’s something in the souls of cattle that makes them spookable, sets them stampeding out of control for no apparent reason. It seems to be the same with markets; each bull market evolves its own particular susceptibility to stampedes.
* * *
* * *
GEORGE GURLEY INTERVIEWS ARTHUR CARTER
Illustrated by Barry Blitt
What made you decide to start The New York Observer in 1987?
I had The Litchfield County Times and I also had The Nation magazine. I’d given some thought to starting a paper in a city. I considered Boston, because it would be less competitive. But New York was my hometown, so I decided to do it here. Newspapers had interested me for some time, and the one I started in Connecticut turned out to be a very well-thought-of newspaper. And the world of journalism, the world of what I call opinion journalism—there weren’t many things around. I became interested in the world of newspapers. I had to study a lot of them, such as The Emporia Gazette—William Allen White bought it when it was an unknown paper, and it became a prominent national publication, a small-town paper that reached a kind of notoriety in the national scene. The other one was Le Canard Enchaîné, a French publication started around 1915. When de Gaulle became president of France, it became a very strong voice attacking the establishment. It became a terrific publication with a significant circulation, not only in Paris but throughout the provinces. I’d thought about being a publisher since the early 1970s, even before I ventured into finance and Wall Street. So I’d given it some thought, but it never really crystallized until I bought a farm up in Connecticut and started The Litchfield County Times. I had been asked to consider something in the political arena and I decided against that. I didn’t think I was the right person or had the right attitude to run for office.
Can you tell me about the first Observer writers?
I hired that whole group—Hilton Kramer, John Heilpern, Rex Reed, Andrew Sarris and Michael Thomas. Hilton was on television. I was watching him give an interview, and I always knew about Hilton, so I called him up and said, “Let me come down and see you.” I asked him, “Would you like to write for us? Cover the art scene?” He had left The Times. He thought that I’d last for about two weeks.
Michael Thomas?
I knew his father quite well, because of my first job at Lehman Brothers—his father was a partner there. And I thought Michael would be a terrific writer; he’s a very amusing, talented guy. And he started at Lehman Brothers himself, so he knew Wall Street. So his column the Midas Watch became a perfect vehicle for Michael.
Rex Reed?
I knew Rex a little bit. Very talented man. Then Richard Brookhiser: I had a very good relationship with Bill Buckley, and one day I said, “Listen, you wouldn’t mind if I called Brookhiser?” I ran this by Bill Buckley, he’d invite me over to his house and have these little dinners from time to time. And I wanted a very strong conservative voice in the paper. I didn’t want us to be considered a left-wing paper or a right-wing paper. So Brookhiser wrote for us on the conservative side and Joe Conason was sort of the other side.
Two months after you started The Observer, the stock market crashed, in October 1987. What made you keep the paper going?
I thought we would go into some kind of downturn and I thought that we could be in trouble, but I decided to stay with it.
What purpose do you think The Observer has served in New York media?
I think that people got a lot more tough-minded in other publications because they saw what we were doing. So we raised the bar higher in terms of critique.
When you started it, did you have a plan, a manifesto?
No. Trial and error. Now the peach paper, of course, it gave a message. You have the three or four peach papers in the world, and they are all very sophisticated publications. Broadsheet peach. The Financial Times, of course.
Why did you locate The Observer in the 64th Street townhouse?
You ask why did I put them in the townhouse? Because I owned the townhouse.
Over the years, several of your friends in high places were enraged at articles The Observer published about them.
You can’t run a newspaper and be worried about that, you can’t go picking and choosing who you’re writing about. We have no sacred cows, which I thought was the only way to make the paper a serious paper. I didn’t want us to pull any punches. We were not going to make a real dent in our world unless we did it that way. If we wanted to be a real factor in the industry and the community, we had to do that. If we were doing the best we could to say what we really believed, and did the homework behind it, I thought that we were in the right place. We’re one of the few New York publications willing to say it like it is.
Can you think of any specific occasion when you were at a party and someone you knew yelled at you?
All the time. My standard reply was, I don’t write the pieces, I d
on’t assign the pieces, I only see them after the whole thing comes out.
How did you feel when people like the mayor or governor called you up and screamed?
Well, if it was about an editorial, for many years I did assign the editorials. So on the editorial page, clearly, I could take responsibility. I tell you, if we said something on the editorial page and I had assigned it—which in most cases, I had for quite a few years—I thought we were on solid ground. I wasn’t going to apologize for something I said, that the newspaper said, that I thought was solid. And so many times, all it became was, “This is my opinion and that is your opinion.” I wasn’t going to apologize for what the paper said.
Arthur Carter is the founder of The New York Observer.
Arthur Carter: Sculptures, Paintings, Drawings is published by Harry N. Abrams.
Like the editorial that said “If Hillary Clinton had any shame, she would resign”?
That was a tough editorial. She had done some marginal stuff that could be attacked, comfortably attacked. A few things that were very, very dicey.
Let’s talk about your editors. Graydon Carter?
Terrific talent. One of the best. I was disappointed when he left after a year. I’d read Spy and then I met him up in Connecticut. He had a house up there and we hit it off. And I’m sorry that he had that [Vanity Fair] offer from [Si] Newhouse and he took it. But I didn’t blame him. But I think he made a powerful difference in the paper. And then, I knew Susan Morrison was his number two at Spy, and after Graydon left, I hired her. Susan was terrific, very talented and exceptional; I liked her a lot. After a few years, she told me she was thinking of alternatives—she ended up at The New Yorker—and I thought, well, I’m going to have to come up with some other possibility. I had seen Peter Kaplan was at Manhattan, inc. magazine in the 1980s, and at this time he was Charlie Rose’s producer. So I called him up out of the blue. He came up to the apartment, and within five minutes we realized his grandmother took French lessons from my mother—and his grandfather was best friends with my uncle. And I remember his grandmother and grandfather very well. It was amazing. So we chatted, and this was what he wanted to do, and I knew Susan wanted to go, so he came aboard. Graydon and Susan took the paper to a range of levels that it wasn’t at before. They were both extraordinarily talented and I was lucky to have the both of them.
The Kingdom of New York: Knights, Knaves, Billionaires, and Beauties in the City of Big Shots Page 6