Rumor And Consequences: Lessons From A Wall Street Guy's Ex-Marital Affair?

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If you were wondering what was going on this morning when you read the New York Times wonderboy Andrew Ross Sorkin's column on Steven Rattner, who slept with some guy's wife and was forced to quit his job as a managing director of Credit Suisse after the cuckolded husband launched an smear campaign against him years after the fact--well, you weren't alone.
What's this story doing in the Times?


Toward the end of the column, Sorkin explains that he isn't just writing about an affair, a jilted lover or a once rising Wall Street star's fall to earth. "But this isn't about a man who made a mistake and had an affair," he writes after telling the story of a man who made a mistake and had an affair. "It is a story about a man who said he was helpless against the destruction that can be wrought by aggressive campaigns on the Internet."
In other words, it's about Bear Stearns, Lehman Brothers, Merrill Lynch, the free flow of information in the age of the internet, and, of course, about rumor mongering. Larry Ribstein cuts to the heart of the matter in his reading of the column.

So now it seems Sorkin is switching gears, pulling a technique out of his colleague Gretchen Morgenson's toolbox - that is, find a practice you don't like, and then find an anecdote that has little to do with the general issue (Wall Street rumor-mongering getting an adulterer fired) that you can use to tar the practitioners you're fighting against.

Ribstein goes on to speculate about why Sorkin may be so worried about rumor-mongers.

Moreover, it's hard to miss Sorkin's motive here. Sorkin needs to be the one to break stories - that's what he gets paid the big bucks for. So he's in direct competition with other sources of information, particularly including Dealbreaker. This relates to the public choice argument about insider trading regulation - that it's all about interest groups competing for information.

Gawker's Ryan Tate points out the irony of Sorkin using the story of Rattner to illustrate the fragility of reputations. "His column, in the end, is what made [ex-husband] Cosgrove's revenge complete, humiliating Rattner not in the sewers of the internet but from a distinguished platform on his home turf," Tate writes.
In fairness to Sorkin, it is nothing short of amazing that he got Rattner to speak to him on this story. We're straight up jealous over that bit of reporting triumph.

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