Politicians Rise to Higher Platitudes
Viral fulmination has taken hold in the media as it does every time Wall Street stumbles. But this time the stumble looks unprecedented in its global magnitude, at least according to Morgan Stanley CEO John Mack in today’s fine interview with David Faber on CNBC. And this is the first time in my recollection that the timing has coincided with the final laps of a presidential race.
So not only are the reporters, who always have their eyes on other people’s paychecks, fulminating, but the pols have split themselves into two new political parties—Sanctimony and Indignation. It’s hard to say who belongs to which—they cut across both sides of the aisle.
This was clear in the best financial news-watching of the last couple of weeks, which was C-Span’s broadcast of Lehman Brothers CEO Richard Fuld’s testimony before Congress on the fall of his firm, the largest bankruptcy in U.S. history.
Fuld defended as best he could, which came down to this: “We certainly did not say ‘Risk be damned.’” He confessed that “We behaved too much like investors, not traders.” (By which he meant, they should have sold—see Bronoff’s Rules, page 31, Rule #3: But That Day Won’t Last.) He pointed out that the board of directors was independent, experienced, and free to give advice. And he allowed, after much hectoring from a California Congresswoman, that the regulatory framework could have contributed to what she called the “meltdown on Wall Street.”
Fuld did fine and will likely do fine, walking away from the ashes with a few bucks in his pocket. But the pols were troubling, as their quest seemed not for facts but for contrition.
They played Grand Inquisitor for the TV camera. Thus we heard from Rep. McCollum of Minnesota: “My constituents believe there is a difference between illegal and wrong.” And from the chairman of the Oversight and Government Reform Committee, Henry Waxman of California, alluding to the hundreds of millions Fuld had been paid: “Most Americans don’t understand—350 million dollars seems like an incredible amount of money. Something is just not right, to say the system worked as it should.” Waxman’s final words: “You don’t seem to acknowledge you did anything wrong, and that is troubling to me.”
It would have been nice if instead of looking for graves to monkey-dance on, the pols would keep a closer eye on the public pension funds they are supposed to be investing and monitoring. It’s a sea of money, and every state elects pols to manage it. Where were they when Fuld’s and other Wall Street and corporate payouts were determined? No doubt boasting about the return they were getting.
As old Mayor Daley (father of the current one) said, in a malapropism that cannot be bested, “Politicians have to rise to higher platitudes.”
That’s the only cover they have.
Yours in tape-watching,
Sam Bronoff
p.s. Thank you Dagen McDowell of Fox Business News for summing up, in your apt country drawl, the case for the government bailout: “The horse is out of the barn!” And thank you Charlie Gasparino for gently mocking the yakfest on CNBC with “I am not paid to be succinct!”
p.p.s. Enter The Missing Rule Contest at Bronoff.com. Winning twelve hundred bucks couldn’t hurt!
