According to Augie, Einhorn is "the first superior man I knew", an intelligent and capable individual crippled in the arms and legs whose job is to steer the vast Einhorn family holdings. Augie works as Einhorn's personal assistant during high school. Einhorn Senior, or the Commissioner, is the originator of the family fortune, and Einhorn is his son by his first wife; Dingbat is his son by another woman.
Augie describes Einhorn's wife, Tillie, as heavy and attractive. Arthur, Einhorn's son, studies at the University of Illinois in Champaign, and the Einhorns continually emphasize the fact that Augie should not expect to share the inheritance; all of it will eventually go to Arthur. Augie finds this constant reminder irritating, but knows, in the end, that he is "adoptable". Also, Augie knows about Einhorn's extramarital affair with Lollie Fewter, a woman Einhorn is "mad" about - and who invites Augie to kiss her one day. Soon, a fire destroys the Einhorn's living room, and Einhorn files a two thousand dollar claim. Augie learns that this is the way Einhorn answers his wife's desire for new furniture. Augie also receives, as a gift, a charred set of Harvard Classics that have been salvaged from the fire.
Meanwhile, Simon decides that something must be done about Grandma Lausch; her personality has become intolerable, and she treats Mama, who is by now almost completely blind, as though she is her servant. Simon writes to Grandma Lausch's sons, and suggests that they either hire a housekeeper or take her back. In response, Simon receives a letter outlining their intention to have Grandma Lausch placed in a home for the aged. Augie drives her to the home, and understands that under her hardened face, Grandma Lausch is trying desperately not to cry.
Meanwhile, the Commissioner hovers near death, and Dingbat finally admits that his father is dying. During the funeral, Augie is the one who carries Einhorn to the gravesite. Arthur, who has come up from school, walks with his mother and later goes out to meet some friends. It is Augie who sits with Einhorn, watching as he composes his father's obituary and burns some of the Commissioner's papers.
The Great Depression arrives, and the Einhorns lose most of their fortune, along with Dingbat and Arthur's inheritance. The March family's money also disappears. One night, Augie joins Joe Gorman and a bunch of fellows who are planning to rob a store selling leather goods on the North Side. The robbery is successful, but Augie states that he doesn't want to be included in any more escapades. Einhorn learns through the grapevine of Augie's participation, and sits him down for a serious talk: "This is where a young fellow starts to decay and stink, and his health and beauty go. By the first things he does when he's not a boy any longer, but does what a man does" (116). He tells Augie that Joe Gorman was carrying a gun, and in order to keep him out of further trouble, hires him back for less pay. He says: "You've got opposition in you. You don't slide through everything. You just make it look so." Augie, stricken by this moment of recognition, thinks: "This was the first time that anyone had told me anything like the truth about myself. I felt it powerfully."
Now that the inheritance no longer poses an issue, Tillie and Einhorn express their affection for Augie more openly. When he graduates from high school, Einhorn takes Augie to a brothel. Afterwards, as Augie prepares to head to Jimmy Klein's house for the graduation party, Einhorn tells him to take the car, but that he must not get drunk and go joy-riding.
Einhorn clearly serves as a father-figure to Augie. The second of the great Machiavellian figures to appear in the book, Einhorn wins Augie's admiration for being crippled, and for refusing to be confined by his physical limitations. In spite of having grown up rich, the task of overcoming his physical deficiencies provides Einhorn with the necessary strength to overcome the hardships brought on by the Depression. By contrast, Einhorn's son Arthur grows up with the security of an inheritance and pursues endeavors such as philosophy and poetry. Great wealth, in other words, affords one the freedom to pursue an interest in beauty and culture. Augie idealizes Einhorn, the Commissioner, and Arthur as a kind of ideal American family, as they symbolize a progression from the self-made man to the lover of highbrow beauty: "the conqueror, the poet and philosopher succeeding the organizer, and the whole development typically American, the world of intelligence and strength in the open field, a world of possibilities" (67). In other words, the Commissioner, a self-made man, created a dynasty of fortune and beauty.
Augie draws the similarity between Einhorn and Grandma Lausch. The two have a similar turn in their thinking: "both believing they could show what could be done with the world, where it gave or resisted, where you could be confident and run or where you could only feel your way and were forced to blunder." Augie underlines this similarity by showing Einhorn's decision to make a false insurance claim in order to purchase new living room furniture. This dishonesty echoes Grandma Lausch's ploy to get eyeglasses from the free dispensary, as well as Simon's manipulation of change money while working concessions. Dishonesty, in other words, is an intrinsic aspect of the real world.
As Simon matures, he also takes the shape of a Machiavellian figure. In an ironic twist, Simon decides that it is time for Grandma Lausch to go, much as she herself decided that Georgie needed to be sent away. Her real sons likewise decide to place her in an institution for the aged; it seems that the "respect" she instilled in her two sons, as well as in Simon and Augie, is a respect bereft of "love". She finds herself condemned to the institution, and the narrative suggests that perhaps love is in fact superior to respect, as it is respect that condemns both Georgie and Grandma Lausch to their unhappy fates.
The narrative becomes increasingly spacious, linking together characters and events through strategic echoing. Grandma Lausch's two real sons are echoed by Simon and Augie, and Georgie's placement in an institution is eventually echoed by Grandma's Lausch's departure: the institution, it seems, symbolizes the conclusion of a chapter in the life of a family. Grandma Lausch's departure also echoes the death of the Commissioner, as both events occur just before the Great Crash.
During the funeral activities, Augie meets with Einhorn's son, Arthur. The two characters are linked together by virtue of the fact that their names both begin with "A", and because they are both sons (either literally or figuratively) to Einhorn. While it is unclear where the name "Augie" comes from, it sounds both intimate and affectionate; it may also be rooted in the word "august" (or "great"), but at times it sounds almost ridiculous. "Arthur", on the other hand, is a name with an unambiguously noble ring to it. In the end, however, Augie proves to be more of Einhorn's son; it is he who carries him to the Commissioner's gravesite, and he who stays up with him late into the night while he composes the obituary. Augie is physically close to Einhorn, and is thus able to act as his spiritual son, while Arthur, living downstate in Champaign, is exposed to a host of influences over which Einhorn has little control.
The Great Crash wipes the slates of fortune clean, thereby revealing the characters' true personalities. Einhorn is strong from having overcome his physical disabilities, but Arthur, having been ripped from the lifeline upon which he had depended - his inheritance - is incapable of engaging in a real profession. The job of rebuilding the Einhorn fortune, in other words, will most likely not fall to him.
Augie, in the meantime, joins a thief named Joe Gorman in a robbery. Einhorn, filling the role of the father-figure, assumes the responsibility of having a talk with Augie when his involvement is revealed. He reinforces the fact that Augie is no longer a child, but a man, and that the first actions he makes as a man are crucial. He holds up a mirror to give Augie a sense of who he is. When Einhorn tells Augie he has "opposition" in him, Augie has a powerful feeling that Einhorn has spoken the truth, though it is unclear what, exactly, the older man means by "opposition". Einhorn's words, however, form a kind of "law" through which Augie interacts with the world as the narrative progresses. He pursues the opposite of what others want from him, after first being profoundly influenced by the person. This makes him into something of a rebel, though in the end this quality is insubstantial. What is Augie committed to rebelling against? He may claim that everything he does is intended to move him towards a better fate, but without grounding his ideas in something more solid, Augie simply reacts in "opposition" to the possibilities that are presented to him. The contrast between Augie and Simon soon becomes even more pronounced. While Augie confesses, "I know I longed very much, but I didn't understand for what," Simon is "making toward the mark he secretly aimed at." Augie adds: "I didn't know at the time which mark or exactly understand why there needed to be a mark; it was over my head."
In the end, Einhorn, as employer and teacher and spiritual father-figure, takes Augie to a brothel and initiates him into adulthood. From this point on in the narrative, the implication seems to be that the actions Augie makes as a man will prove crucial to his ultimate destiny.