More Evidence of Nothing Changed

There were two very telling columns in yesterday's New York Times. Frank Rich, whom I have come to admire greatly since he stopped writing about trivial subjects like style, wrote a column about how he hoped the culture of greed would change now that we seem to coming out the other end of the worst economic crisis in 75 years. In the other column, Graham Bowley and Louise Story wrote about the exodus of so-called "top talent" from Wall St. firms that have received government funds and are now subject to compensation restrictions to new upstart firms and foreign instititions who are hoping to continue the culture of greed and reap extraordinary, unnecessary profits from the kind of market activity that precipitated the crisis in the first place.
I read the Bowley and Story column first because Mr. Rich's column is sometimes hard to find in the online version. I was thoroughly disgusted to see that the lessons Mr. Rich hopes have been
learned are being discarded for the continuation of the status quo.
One insinuation in the Bowley and Story column was that the "top talent" is irreplaceable and represents a very small percentage of the people who work in the financial industry today. This is completely ridiculous. Every day many smart people go to work in America in positions that require them to be extremely talented and saavy. To imply that there are very few people alive who can replicate or repair the incredible crisis created by these elite minds and continue to manufacture the unrealistic returns that contributed to the bubble that burst is absurd. An Ivy League education does not automatically anoint you as a Master of the Universe. We do not need these people to perpetuate the financial system.
What we do need is a discussion about the subjects that both Mr. Rich and I have raised before.
The culture of greed must be purged. Allowing people to make a billion dollars in one year leads to excess and not just excess income. It also leads to the type of mentality Mr. Rich talked about where the dollar becomes an end in itself. This is a relatively new phenomenon in America. We used to be a cohesive society with shared values. Now the unfettered capitalism brought about by thirty years of deregulation has brought us to ruin and the so-called "top minds" don't want to change a thing. I don't call that intelligence or innovation, I call that greed and blindness. They are playing the government for saps.
It is clear that to demonstrate the visionary leadership necessary to rid us of the culture of greed a socialistic approach needs to be adapted. There should be compensation limits imposed on every business operating in the country. Any pay in excess of a certain amount should be collected and placed in a fund to improve the infrastructure and school systems. That would also include the cost of a higher education. To place the advantages of a higher education out of the reach of those who make less income is social injustice in its highest form and does nothing to solve the world's problems. No wonder so many young people grow up feeling that they are powerless and their lives mean nothing. What's amazing to me is that the so-called "top minds" have so little understanding or concern for the long term implications of their insatiable greed.
Of course, these so called "top minds" would also be the ones leading the fight against the kind of societal change which is clearly needed in the aftermath of our current crisis. I fear that even President Obama does not have the courage to do what is necessary to combat this ingrained greed for fear it will be politically suicidal. But doing so would instantly rank him near the President he has already been compared to: Abraham Lincoln. Let's hope our new President can demonstrate the kind of leadership necessary to show those who are wrongly called "top minds" what vision really means.

A Chance for Real Leadership

The culture of Wall Street will never learn. The New York Times reported today that AIG executives are to be paid bonuses totaling $165 million dollars after receiving $170 billion dollars in bailout money from the government. This is another clear example of the divergence between morality and law.

The arguments being made in favor of the payments are ludicrous. The lawyers for the firm said the firm had no choice but to make the payments. The government owns 80% of the firm. They should simply say no bonuses and the people they were promised to have no right to sue for them. End of story.

The second argument is an old one and a discredited one. The firm said that the bonuses have to be paid in order to retain the most skilled executives. The lion’s share of the bonuses is being paid out to the people in the financial products division, the same division that brought the firm and thousands of people to their knees. Where is the skill in that? How can they even call these people skilled? Is there no performance measurement parameter tied to these bonuses? Some of these people, and not just AIG executives, should be in jail instead of worrying whether their bonuses are going to be paid. They created financial products without properly calculating the risks and then the executives of the firm blamed the regulatory structure for the disaster they created. The article states that the financial products division is being wound down. A firm doesn’t do that unless they know there’s no hope. So the executives are being paid bonuses to preside over a financial funeral.

What is missing and unexamined in the midst of this ridiculous dust storm is the issue of patriotism, of national unity. This is a crisis situation. President Obama’s inaugural address called for a new sense of shared purpose, a new era of personal responsibility. There was the example of the banker in Florida who paid bonuses to employees who didn’t even work for him after he sold the firm and reaped a huge profit. That man should be Time Magazine’s man of the year, even though the title has been rendered meaningless. Where is the sense of personal responsibility in these AIG workers? How they can accept this money with a clear conscience? I know I couldn’t. These people, if they had any character, would issue a joint statement saying that we acknowledge our mistake, that we know we created a financial debacle and we will accept no bonus compensation until the firm is back on firm financial footing and it is certain that no further government bailout money is needed. That would instantly win them the respect of the American people and send a clear signal that Wall St. is serious about changing its culture. It would also show a much needed willingness to work in the national interest, instead of their own obviously misguided self interest.

This is the kind of spirit we need in this country today. Day after day we hear stories of despair, incompetence and unbridled greed. This country used to have the ability to pull together. It doesn’t seem to be there anymore. We have lost faith in our government and each other. As I have said before, it’s a sign of lack of self respect.

If President Obama were to act with a firm hand and forbid the payment of any bonuses to employees of firms who have received government bailout money, his popularity would soar and people would see that it is possible for justice to be done. That’s the kind of leadership I expect from a man who has been proclaimed a visionary.

Another Moral Failure

An article in the New York Times from Wednesday was another sad reminder of where the culture of de-regulation has brought us. The article says the EPA has been studying whether to regulate coal ash for 28 years. It goes on to say they don't have a schedule for implementing regulation at this time. Of course, there's also the obligatory statement from a coal industry spokesman saying that the industry needs no further regulation.
You can't make this stuff up. If you were to examine the issue in a vacuum, the question would be, is it permissible to allow toxic substances to be dumped into the ground without any regulation? Only coal industry spokesmen would say yes. Everyone else would laugh at the fact that the question even needs to be asked.
The lack of regulation in the financial industry has brought us to the edge of ruin. Will it really take a major environmental disaster for us to act on this issue? We had to have Exxon Valdez and Three Mile Island before those industries were properly supervised. What has to happen before the coal industry wakes up to its environmental responsibilities?
Just as with every other failure of moral courage in this country, there is no one person responsible. We are all responsible. Complacency has bred a spirit of buck passing that allows each person to shed their responsibility in favor of the assumption that someone is watching the store. Well, it has become clear that no one is watching the store. Concern is apparently not enough to create action.
Taking a proactive attitude toward this and other environmental issue would demonstrate to our citizens and to the world that we are serious about protecting the environment for our ourselves and our posterity. Having to tell our grandchildren that we could have done something but instead we chose to study the problem for more than three decades is a fate no one should have to face.
President Obama was elected to rekindle the hope and spirit of Americans after nearly thirty years of permissiveness and stupidity. I pray to my God that he is able to shoulder the enormous burdens he has been entrusted with. Only through a show of unfailing support and rare unity will he know that he can move forward in bold fashion to make the kind of changes that this country needs to reconcile itself to its own deficiencies. It is a sad fact that so many people feel that they should not be told how to live, but then demonstrate that they have no idea what conducting themselves in moral, responsible fashion is all about. Emotional development and real action are passed over in favor of boosting the ratings of American Idol so a false feeling of unity can be created. We can do so much better. We owe it to ourselves and future generations to start immediately.