The Case of Ellen Pao

After Ellen Pao got fired by Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers she filed a $16,000,000 lawsuit against the firm for gender discrimination.

She lost.

Pao had started out on the fast track, but as she had been promoted she failed to perform. Thus, she was not made a senior partner and was eventually let go.

Currently, she is interim CEO of Reddit.

Among the more interesting sidelights of the Pao saga is her husband, Alfonse “Buddy” Fletcher.

A husband’s actions do not necessarily reflect on his wife, and vice versa, but, one is known for the company one keeps, and Buddy Fletcher has more than a few problems of his own. Apparently, his business dealings have been less than honest.

Last month the New York Post reported his problems with the law:

Disgraced former hedge-fund operator Alphonse “Buddy” Fletcher’s broken promises are catching up with him.

A Manhattan judge has ruled that the 49-year-old investor owes his former law firm $2.7 million in unpaid legal bills.

Add that to the more than $140 million in court judgments and tax liens against the Harvard-educated fallen finance whiz and his fund, and you have one of the oddest Wall Street stories in recent memory.

While Fletcher owns three apartments in Manhattan’s exclusive Central Park West Dakota co-op, an $8.85 million self-described castle in Connecticut’s tony Litchfield County, and, with his wife Ellen Pao, a $1.5 million San Francisco home, the ex-hedgie stands accused of cheating Massachusetts and Louisiana cops and firefighters out of more than $100 million and not paying close to $3 million in taxes.

The pension plan of the public employees had invested in Fletcher’s hedge fund, Fletcher International, before that fund crashed and burned in 2012 amid a series of questions concerning the whereabouts of the cash.

A court in San Francisco found against Ellen Pao. But, being married to a man who stands accused of defrauding police officers and firefighters in two states… it’s not a good thing.

As for Pao’s discrimination case, in today’s Wall Street Journal Heather MacDonald argues that the Pao case is just a small part of the feminist assault on the high tech industry.

There is a pungent irony here. The most affluent liberals in the nation are being hoist on their own petard. Considering the extent to which the titans of tech promote leftist causes, one does feels little empathy when they have to defend themselves against feminist lawsuits.

MacDonald is less than optimistic about the future:

This triumph of common sense [in the Pao lawsuit], though, represents merely a minor setback in the feminist crusade against America’s most vibrant economic sector. The chance that Silicon Valley can preserve its ruthlessly meritocratic culture under a continuing feminist onslaught is slim.

To reprise a point I have occasionally made, it is in no one’s economic self-interest to discriminate against qualified candidates. The marketplace will inevitably extract a high price from those who do.

MacDonald says:

Ms. Pao’s suit is a perfect example of the feminist vendetta against Silicon Valley companies. That vendetta is based on the following conceit: Businesses refuse to hire or promote top-notch employees who would increase their profits, simply because those employees are female. Reality check: Any employer who rejects talent out of irrational prejudice will be punished in the marketplace when competitors snap up that talent. For the feminist line of attack on Silicon Valley to be valid, every tech firm would need to be conspiring in an industrywide economic suicide pact.

As I have put it, if those who believe that business systematically discriminates against equally qualified candidates, for any reason whatever, get together and hire those candidates, they would easily outcompete those who discriminate.

Given the current cultural environment, high tech companies in particular would love to hire as many female employees as possible. They might only do it for the PR or to forestall lawsuits, but surely if they could afford to do it they would.

In MacDonald’s words:

Even leaving aside market pressures, the claim that any high-profile company today would discriminate against highly qualified females defies political reality. Every elite business is desperate to hire and promote as many women as it can to fend off the gender lobby. Women who deny that their sex is an employment asset are fooling themselves.

When you see the world through the lens of your ideology, you will blind yourself to reality.

She continues:

But in a sign of how irrational Ms. Pao’s view of the world is, she has now positioned herself as a martyr for Silicon Valley’s allegedly oppressed Asians as well as its females. “If I’ve helped to level the playing field for women and minorities in venture capital, then the battle was worth it,” she said after her courtroom defeat. Never mind that Asians are overrepresented in Silicon Valley and at Kleiner Perkins, compared with the national population, thanks to their talents, not least in science and engineering.

Identity politics has already inflicted significant damage on the American university system. Schools went on a hiring binge to fill its administrative ranks with diversity bureaucrats. In the meantime, teaching jobs disappear and young scholars are forced to work as low-wage adjuncts.

Fortunately for the schools, the adjuncts are so politically correct that they never question where the money is going and whether the university’s money might be better spent on education.

For now, no one spends very much time thinking about the economic cost—in inefficiency and distraction—of identity politics. No one seems to care about whether it will make America more or less competitive against other countries.

McDonald offers a “modest proposal” to solve the problem. Inflict the same handicap on the foreign countries that send their children to study at America’s best science and technology schools:

All else being equal, any economy that can escape the clutches of identity politics will enjoy a vast advantage. As an insurance measure against future competition from still-meritocratic cultures, perhaps the U.S. should institute this rule: For every foreign scientist we train in our graduate schools, the scientist’s home country must enroll another of its students in an American gender-studies department—who would then be sent home to enlighten the populace in the nuances of gender equity. That would level the playing field.