Correction
is `breath of reality.' In valley consumed by greed, maybe this is what's
needed, says Paul Saffo, Institute for the Future
BY RICHARD SCHEININ
Mercury News Religion and Ethics
Writer
The San Jose Mercury News,Wednesday,
April 5, 2000
For some people, Nasdaq's undulations
are
bringing on a metaphysical
moment: What's
it all about, valley? Where's
the meaning
beyond the cool cars and those
cherished
plans to tear down the family
house and build
a mansion?
If vast personal wealth can
vanish in a day
or a week, then maybe it's
time to talk
priorities. There's more than
a market
correction happening here,
according to more
than a few people paid to study
Silicon
Valley culture. There's an
attitude correction
under way. A values correction.
Or there
should be.
Even if the recent stock fluctuations
are
more of a wake-up call than
a hammer, they
represent ``a breath of reality,''
said Paul
Saffo, a director of the Institute
for the Future
in Menlo Park. ``The engine
of Silicon Valley
has always been equally driven
by the
desire to change the world
and the desire to
get rich changing the world.
And what's
really bothered me lately is
that the desire
to get rich changing the world
has been far
outstripping that other, better
motivation.''
The recent stock tremors are
``a nice
recognition,'' he said, that
Silicon Valley business
people and investors need to
rebalance their
priorities.
Why such money lust here?
Mostly, because there's money to be made.
Beyond that, there are a couple
of theories.
One says that the technology
business is
driven in a big way by young
people who
aren't yet in a position to
worry about leaving
a moral legacy to another generation.
``Some
of the most haunted people
I know in
Silicon Valley are the people
who are wildly
successful early,'' Saffo said.
``It's almost
like child actors: `Was it
me? Or was it
luck?' They're Ahab-like characters
who go
through life proving themselves.
Success
rarely breeds reflection until
midlife.''
Personal excesses
Another theory says that traditional,
institutional checks on personal
excesses,
including financial gluttony,
are
increasingly absent in Silicon
Valley.
As the stock market wobbles
and day traders
wilt, author Robin Leonard
is reminded of
Texas in the 1980s, when oil
gluts brought on
the loss of vast personal fortunes
that
had been quickly made. ``But
that's a
religious part of the country
. . . and this is not,''
said Berkeley-based Leonard,
the author of
``Money Troubles'' and other
books on
debt, credit and bankruptcy.
``And I wonder if that's one
of the reasons
that's allowed greed to flourish
as it has
here,'' she went on. ``People
outside the Bay
Area are exposed to these morally
based
teachings, week after week.
Do we have
regular, on-going checks on
our greed or our
morals, at all?'' asked Leonard,
who is
switching careers and moving
to Jerusalem to
attend rabbinical school.
Not everyone buys the idea that
more religion
is what Silicon Valley needs.
In fact, not
everyone agrees that this is
an inordinately
greedy place. At Santa Clara
University's
Markkula Center for Applied
Ethics, faculty
from nine disciplines meet
monthly to talk
about greed. They call themselves
``the greed
group,'' and among them is
Tim Healy,
an engineering professor, who
thinks it's
``too easy a statement to say
that `the valley is
driven by greed.' ''
For instance, Healy observed,
many engineers
are motivated by altruism.
He's not so
sure whether venture capitalists
are
similarly motivated. But engineers
will often work
80-hour weeks, simply ``because
they have
this strong feeling that the
systems they
develop will make for a better
life for
everyone.''
Similarly, when Healy looks
at his students,
he said, ``I don't see a drive
to make
money and nothing else. I see
a drive to be
good engineers.''
It's not necessarily about the money?
'`I know people with dollar
signs in their
eyes,'' said Barbara Cardillo,
vice president of
marketing for a Santa Clara
start-up called
Propel. ``Sure, there are people
working in
technology stocks and they
gloat and they
start buying fancy cars and
building big
houses and borrowing against
their stock.
Those people, I'm sure, are
feeling very
nervous right now because of
the market.''
But Cardillo thinks most workers
and
investors are a little more
cautious. They have
their stocks distributed among
low-risk and
high-risk companies and aren't
so shaken
by what's happening in
the markets.
An investment moment
In fact, for these people --
and for Cardillo
-- this is not a metaphysical
moment. It is an
investment moment.
``This morning, as I'm laying
in bed watching
CNBC,'' she said, ``I'm looking
at the
Nasdaq blue chips that have
gone down in
value, and saying to myself,
`Hmmm. This
might be a good time to buy.'
And I bet there
are a lot of people like me.''
Cardillo has a nice nest egg.
She also dreams
of some day running a philanthropic
foundation that gives away
valley wealth.
Persuading people to put wealth
to good use
is a regular challenge for
the Rev. Libby
Vincent, an associate pastor
at Menlo Park
Presbyterian Church, which
is filled with
well-paid Silicon Valley professionals.
She quotes Gordon Gekko, played
by actor
Michael Douglas in the the
movie ``Wall
Street'': ``Greed is
good,'' Gekko declared,
famously.
``People like to be greedy,''
Vincent said,
``and they like what it gives
them, which is
nice things and choices
and power. . . . But
at some point it may also cause
people to
pause and wonder what their
values are.
People who have double incomes
and can't
afford to buy a condo? They
pause and go,
`What's right about this?'
-- `right' being
used in a sardonic tone. It
makes tham pause
and take stock.''
Some think about ``investing
in the Kingdom
of God,'' Vincent said. ``Maybe
they'll
want to build something more
significant than
a new house. Maybe it's building
a
house for someone who can't
afford one. . . .
Maybe it's helping fund orphanages
in
Russia, whatever.
``How do you minister to people
who seem to
have everything, materially?''
she asked.
``Jesus himself said it's harder
for a rich
man to enter heaven than for
a camel to go
through the eye of a needle.
He understood
greed completely.''
Contact Richard Scheinin at
rscheinin@sjmercury.com or (408) 920-5069.
Silicon Valley Wealth Brings New Stresses on Children
By PATRICIA LEIGH BROWN
The New York Times,March
9, 2000
PALO ALTO, Calif., March 9 --
Every day after school,
13-year-old Jeffrey Mendelman
has a peanut butter and jelly sandwich with
milk, finishes his homework
-- and checks his stocks.
"My dad's stock was going up,"
Jeffrey says of his decision to plunge
into the market, and he now follows
stocks the way he collects
autographs and baseball cards.
"Most kids here are interested in the
market. Because a lot of their dads
have become pretty rich and that's
why they get to live in a gigantic
house."
A new sort of American childhood is
being forged in the land where each
day brings the dawn of an estimated
60 new millionaires. It is one in
which C.E.O.'s are the super
heroes, family banter is often likely
to include talk of multiples and
I.P.O.'s, and where a recent
collision between two students in a
high school parking lot involved a
Toyota S.U.V. Forerunner and a
Mercedes 500 SL.
But along with a new openness
about money, and the good
things it can bring, have come
concerns about the effect of
Silicon Valley's bountiful
wealth on children, issues
that are
likely to escalate as the post-adolescent
entrepreneurs,
barely old enough themselves
to have
graduated from Ramen noodles
on a hot plate, come of age.
The peculiar challenges of wealth,
or what is now being
referred to in the Valley as
"the
sudden wealth syndrome," have
themselves spawned a variety of
enterprises dedicated to helping
the rich be rich, or what Judy G. Barber, a marriage
and family counselor, calls
"the
unique issues that children
of affluence face." Ms. Barber,
with offices in Napa, San Francisco
and Palo Alto, also publishes the newsletter,
"Family Money: Commentary on
the Unspoken Issues Related to Wealth."
Three years ago, Dr. Stephen
Goldbart, a psychologist,
co-founded the Money, Meaning
and Choices Institute, a private
practice in San Francisco,
to "explore the psychological
opportunities and emotional
challenges of having and
inheriting money." Dr. Goldbart
calls
the Bay Area "ground zero for
the expanded upper class,"
foreshadowing the "largest
intergenerational transfer
of wealth in history."
Financial institutions are also
responding. Merrill Lynch,
for one, recently instituted
a
"financial parenting" program
geared toward children to
"heighten awareness of wealth's
responsibilities," said Scott
Cooper, a senior client
relationship manager. It includes
investment lessons for children
as well as guidance on the
so-called "affluenza syndrome,"
helping clients answer such
questions as, "Daddy, why are we
flying a private plane?"
Answer: "We've had a little luck but we've worked hard for it."
On El Camino Real, the Champs-Élysées
of the new economy, Liz
Gannes, a senior at Palo
Alto Senior High, reflected
on the unusual environment of her
youth, of going to organized
"schmooze fests" for techies
and weddings where people "eat,
talk and make deals."
"It's hard to ground ourselves
sometimes," Ms. Gannes
observed, echoing the feelings
of
many of her peers. "The things
we hear on the news are
happening all around us. We're
living on top of this bubble
and we're not able to see below
us."
On jogging trails and bridle
paths here, money and how it
affects children -- a subject
once
more taboo than sex and death
-- has become a major topic of
parenting. One high-net-worth
mother in Portola Valley, who
spoke on condition of
anonymity, said: "My kids have
absolutely no idea we have
more money than other kids, but at
ages 5 and 8 that's easy to
enforce. Soon, all they'll
have to do to find out their
fathers' net worth is look
on the Internet
or read the paper. It's embarrassing.
I'm nervous for my
children."
The landscape of 17-year-old
Alexa T.'s childhood in Atherton
is one of swimming pools,
guest houses and gardener-maintained
property where
full-grown trees are helicoptered
in,
and it brings this view: "In
school you're learning as fast
as you can so you can apply
it as
fast as you can so that you
can become rich and successful by
age 24, because that's what
happens here."
Her mother, Elizabeth, complains:
"It's the money that comes
first. They're not talking
about
the Ph.D. They're talking about
the $20 million and the house
in Atherton."
The rapid pace of technological
change, the long hours
required of start-ups, the
making of
vast fortunes at an early age,
have brought with them new
challenges for families, said
Paul
Schervish, a professor of sociology
at Boston College who is
studying the effects nationally
of the recent surge in family
wealth.
"The material life of this period
has accelerated way beyond
our spiritual understanding
of
it," Professor Schervish said.
"For the first time we can no
longer use 'we can't afford
it' as
a cultural limit.
"Parents themselves are living
a more intense life, working
faster and harder. Part of
the new
economy is this notion that
you either move forward or you'll
fall back, and those pressures
and values are getting passed
on to children. Parents feel
more of a connection between
what
their kids are doing now and
their fortunes in the future."
To Kris Goodrich, a co-founder
of the Child and Family
Institute, a nonprofit center
in
Menlo Park, the fear "that
you're the only one that can't
keep up" has become pervasive.
Her center offers stress classes
for preteen children and
family discussion programs
about
values.
Ms. Goodrich said: "Children
look at the middle class as
poverty and going to Hawaii
only
once a year is considered the
bottom rung.
"The loud voice, the Silicon
voice, says, 'If you're not
constantly updating and going
the
next jump every day you're
replaceable.
That puts a tremendous strain
on parents. They look at the
children and think, 'I've got
to
give them everything.' They
overprovide, because they want
them to keep up."
An 11-year-old boy she knows
made a fervent wish last year:
to simplify his overbooked
life. "It's not so much the
money as the life style they
perceive they have to have,"
Ms.
Goodrich said.
Dr. Gerald D. Bell, a consultant
and professor at the
graduate school of business
at the
University of North Carolina,
spoke of a father here who
recently took his three daughters
for a ski vacation in Gstaad,
Switzerland. The father told
each daughter they could bring
a
friend. "They spent two weeks
in luxury, with unlimited room
service," Dr. Bell said.
"When they came back to school,
the friends were telling
friends, and the girls suddenly
started getting a lot of social
invitations. Even the coaches
on teams were being deferential.
"Other kids see the preferential
treatment and get mad. So
these kids get a double-whammy,
asking themselves, 'Do they
like me or do they just want to
get invited to Gstaad?' "
The flip side of parents staking
their claim to Silicon
Valley gold can be desolate.
Laura M.,
17, spoke softly in recalling
her mother's plunge into a
start-up: "My mom said, 'I'm
going
to spend a lot of time at work.
Is that O.K. with you?' I
would have felt bad saying
no.
The big problem was I was used
to having her around to say,
'Don't talk on the phone' and
'Don't watch TV.' "
Laura's grades plummeted, prompting
her parents to pull back
on their hours somewhat.
"The thing I really hate is
coming home to the dark," Laura
said.
"It's a big house."
An undercurrent of parental
regret runs through the
conversations of some teenagers
whose
parents feel they have somehow
missed the boom. "My parents
are doctors," Lisa M., 17,
said.
"But when they see tons of money,
I think they feel sort of
left out. Compared to the C.E.O.
of Cisco Systems, my dad feels
totally insignificant."
At Palo Alto Senior High, a
school with robotics classes and
electronic lockers, Esther
Wojcicki, a revered teacher,
has noticed a change in role
models among her students.
Rather
than Michael Jordan and Michelle
Kwan, Ms. Wojcicki said:
"Their heros are the 20-year-olds
with start-up companies who've made $20 million.
It's made more intense, because
they know them."
In a milieu that respects divergent
thinking,
even students themselves are
becoming legends
for their exploits.
Among them is Hans Pang, 17, the son of a
bank teller and an acupuncturist. Three years
ago, a friend's father, Dominic Orr, the chief
executive of Alteon Web Systems, in San Jose,
offered Mr. Pang a summer job after hearing
about his computer wizardry. Mr. Pang's
performance during the summers was such that
last year, the company, which was going
public, offered him employee stock options in
lieu of salary in recognition of his work.
"I said yes, since I'd heard about I.P.O.'s
skyrocketing and had a good feeling about the
company," Mr. Pang said. His shares are
currently worth about $75,000, on paper.
"I was earning $10 an hour, which wasn't
bad," said Mr. Pang, who has a buzz cut and
doles out business cards. "I was happy. But
obviously this has made me more happy."
Eric Bloom, an economics teacher
at Paly, as the high school
is known, realized the culture
had shifted when he began noticing
that some students were
becoming bored when simulated
stocks were introduced in class.
"It turned out they already
had their own real ones," Mr.
Bloom said.
A positive side of all this,
some of the parents and children
say, is a feeling among young
people that success is just
a step away, rather than a climb
up the ladder.
Yet as the dot-com millionaires
come of age, parents,
educators and mental health
professionals worry that the
sense of entitlement that has
long characterized the proverbial
indolent trust-funder will
flourish. "It used to be, 'My
daddy can beat up your daddy,'
" said
Mark Walsh, founder of VerticalNet
Inc., a Web site company
in suburban Philadelphia."Now
it's, 'My daddy can buy your daddy.' "
Joan Lonergan, head of the Castilleja
School, a private
school for girls here where
community service is required for graduation, said wealth is
one of the biggest issue facing
parents. "People here aren't
brain-dead," Ms. Lonergan said.
"They're looking hard at values,
because everything in the
community is focused on money."
Some parents are using their
wealth to reconfigure values.
Richard Lowenthal, 47, for
instance, retired three years
ago after his
telecommunications company,
Stratacom, was
bought by Cisco Systems. The
father of two daughters, ages 15
and 11, he now spends half
his time in community service
and is mayor-elect of the
Valley town of Cupertino.
Mr. Lowenthal, noting that there
are no 12-step programs for
workaholics, said: "I've been
through that intensity. People
whose own self-worth is
measured by how much money
they
have are far more common here
than people who can give it a
rest. We need more people to
set an example for being more
whole."
Debra Engel, 47, a single mother
of two, retired recently
from the 3Com
Corporation, which she joined
as a start-up. Ms. Engel said
she had set "a number I aspired
to" that she felt would financially
allow her to be at home
full time with her children,
now 10
and 13. "I'm a great believer
that making your own way in the
world is important to who
you are and who you become,"
she said. "Many of us have come
by this wealth serendipitously.
How do my children develop a sense that
that's unusual?"
One of Ms. Engel's strategies
has been to involve her
children in philanthropy, including
helping make decisions on where
the money goes and visiting
inner-city nonprofit organizations
she has helped finance
through the Community Foundation
of Silicon Valley, a private
nonprofit group in San Jose.
Of having money, she observed:
"It can make you think, 'How should I live?' You not only get
tested in life when bad things
happen, but when good things happen, too."
Young people like Minal Hasan,
17, daughter of an
entrepreneur mother and a
venture-capitalist father,
seem acutely aware of the
unusualness of their lives,
of intense
family discussions about first-
and second-round financing,
school lunch chatter about
Bloomberg, of endlessly winding
driveways with underground
garages.
"Some day," she observed, "this
whole time period will be in
the textbooks, like the Vietnam
War."