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Rupert Murdoch Hearings Show Generational Split


Surely the most spectacular moment in the hearings on Tuesday occurred when Robert Murdoch’s young 42 year old wife, Wendi Deng, got up and slugged an intruder throwing a paper plate full of shaving foam at her husband, according to the Daily Mail.

Rupert Murdoch at right, his wife Wendi Deng in the pink jacket, and his son James (Daily Mail)Rupert Murdoch at right, his wife Wendi Deng in the pink jacket, and his son James (Daily Mail)

I have no way of knowing whether either Rupert Murdoch or his son James lied during the dramatic hearing on Tuesday, but I do know that Murdoch’s testimony is completely consistent with the the culture of fraud and extortion that I’ve been describing for many years on my web site, among politicians, and in the financial and computer industries. (For the latter, see “Boomers and Gen-Xers: Dumbing down IT.”)

Wendi Deng jumps up instantly and slugs her husband's foam assailant (Daily Mail)
Wendi Deng jumps up instantly and slugs her husband’s foam assailant (Daily Mail)

The statement by Murdoch that most struck home, in my opinion, occurred when he was asked if he planned to resign, quoted by AP. Now, you can say that his answer is self-serving, but whether he had any other motives, I felt he was genuinely shocked and angry at what had happened, and his response describes a lot of what’s been going on in the last decade:

“I feel that people I trusted, I’m not saying who, I don’t know at what level, have let me down. And I think they behaved disgracefully, betrayed the company and me, and it’s for them to pay. I think that frankly, I’m the best person to clean this up.”

This is exactly what happened in the financial industries, where those tens of trillions of dollars of toxic assets still in banks’ portfolios didn’t just come from nowhere. They were created by Gen-Xers who poured out of colleges in the 1990s with masters degrees in financial engineering. Those people knowingly created these fraudulent securities, and sold them to investors knowing that they were defrauding the investors.

Their greedy, incompetent Boomer bosses went along with this, because they were making so much money by defrauding investors. The extortion came in when the bosses started asking too many questions; then the perpetrators threatened to go to another firm or create other problems. (See “BlogWatch: Yves Smith at ‘Naked Capitalism’ adopts generational model of financial crisis.”)

These tens of trillions of dollars of fraudulent securities did not just come from the tooth fairy. Almost every major financial institution in the world was involved as perpetrator, and that could only happen generationally. That doesn’t mean that every Boomer and Gen-Xer is a crook; quite the contrary, most people are decent, honest people. But it’s amazing how much the culture has changed since the 1990s, when the Silent generation was still in charge. In today’s culture, unlike earlier decades, people who are willing to commit fraud and extortion are able to get away with it, and have a big advantage over people who are decent, honest, competent and professional.

The Rupert Murdoch scandal exploded into world headlines only in the last couple of weeks, after it was revealed by the Guardian that reporters from Murdoch’s News of the World newspaper had hacked into the cell phone account of a missing 13 year old schoolgirl, Milly Dowler, after she had been abducted in 2002. The reporters actually listened to Milly’s phone messages and deleted some of them, to keep other reporters from getting the scoop. Milly’s distraught parents, not knowing whether she was alive or dead, discovered that the messages had been deleted, and assumed that Milly must have deleted them herself, meaning that she was still alive. Her decomposed body was found in the woods several months later.

At Tuesday’s hearing, Rebekah Brooks, the editor of the paper at that time, described her reaction when she read the Guardian article two weeks ago, as quoted by BBC:

“The idea that Milly Dowler’s phone was accessed by someone being paid by the News of the World, or even worse authorised by someone at the News of the World, is as abhorrent to me as it is to everyone in this room. …

I don’t know anyone in their right mind who would authorise, know, sanction, approval, anyone listening to the voicemails of Milly Dowler in those circumstances. I just don’t know anyone who would think it was the right and proper thing to do at this time or at any time.”

Once again, I don’t know what additional motives Brooks might have had in making this statement, but her anger and disgust is very credible to me, because there are two kinds of people in the world. There are people who think that there’s nothing particularly wrong with hacking into the cell phone messages of an abducted 13 year old girl, and there are people who think that no one in his right mind would do so, or who would go ballistic at learning about someone else doing it. I’m firmly in the second of these two categories, and I can easily believe that Brooks was also in the second category.

What’s different about our culture now that’s different from the 1970s, 80s and 90s is that today there are a lot more people in the first category. For these people, decency, honesty, competence and professionalism count for nothing.

We know that the culture of fraud and extortion permeates the entire financial industry, as well as the politicians in Washington and Brussels. We know that it also exists in the computer industry, and now we also know that it exists in the media.

This is not surprising. What WOULD be surprising is if anyone could name an industry which was not permeated by fraud and extortion in the last few years.


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