Tuesday, December 9, 2008

The age of ethical lapses

Democrats, you gotta love 'em. No, this is not an anti Democrat tirade. But what has happened in Illinois is just too much to let sit...

What you will read below is about the stinkers on both sides of the aisle...and the pot calling the kettle black. It's about the total demise of our two-party system. Because in the end it's just one great big immoral party, isn't it? Pay me! pay me! I want to be RICH! Pay me! Pay me!

Both Sides Now
We are not here because of republican errors there were errors on both sides of the aisle...
This is an attempt to provide balanced coverage after the way democrats blamed every conceivable ill on the republicans in the last election. One thing I will never forgive Obama for is not running against McCain. Instead he said McCain is just like George Bush. But nothing could be farther from the truth. Whatever statistical exercise produced McCain as agreeing with the President 80% of the time it surely misrepresented many other aspects of the man. McCain is and was a War Hero and man who has served MANY YEARS in the Senate with distinction and few embarrassments (the Keating 5 episode being the notable exception, such as it was). McCain would not have done what George Bush did. After-the-fact support of his policies is different from making the decision yourself. Obama knows better but his willingness to play it that way makes me more skeptical of him. He has not yet opted for the high ground, despite his love of soaring rhetoric.

Oversight or an oversight?
Moreover, democrats have headed the key House and Senate 'banking' committees over the past four years. They have had the platform and ability to oversee the financial markets (as overseers of the overseers). They did not do well. And democrats have been defenders of Fannie Mae when republicans had sought to reign it in. Fannie Mae got huge and had its accounting irregularities emerge under Franklin Raines' rule; he was a Clinton appointee, not a republican protege.

For sale, for sale Oops- off the market
But most interesting and proof of my point that the two parties are not different from one-another is the report that is running as a headline everywhere: that the Governor of the great state of Illinois was trying to SELL the senate seat vacated by Obama when he quit to prepare to become the President of the United Sates of America. Sell it. Yo Senate seat for sale. Yo, check it out on eBay...real Senate seat.

Love for sale...or a Senate seat
To the governor goes the ability to appoint a successor when a senator leaves in the middle of his term and this governor decided that it was a plumb assignment that he could squeeze some juice out of. Isn't that special? While you can hate republicans if you want for whatever your special reason may be, there is no scope for condoning this act by a democrat. The FBI stepped right in and arrested him. This really stinks and in the Land of Lincoln, to boot- its like sacrilege. This certiainly one-ups the NY State governor's ouster for his use of a private call girl. Elliot Spitzer, ousted, from his job in NY, has had no charges filed against him. He was embarrassed and threatened with charges but in the end he was just forced out of office by the public revelation of his tawdry act. Who was behind that? Ever wonder? And what of Stevens, Senator in Alaska? Mr Stevens, 84, is the longest-serving Republican senator in history and officially the highest-ranking senator. But he was found guilty on seven federal felony charges for failing to properly report gifts worth more than $250,000. What was that about? The party doesn't matter. The nuttiness does. Spitzer may be a victim. but the others are real problems. And Spitzer is no example of what a leader should be or how he should act - even if he tried to keep it 'private.'

The age of ethical lapses
So when you look up and down Wall Street at everything that has happened -- are you surprised? Bailout funds went into AIG and one of management's first acts was to payout early deferred compensation to protect management's own funds in the event of bankruptcy. Unlike pensions and 401Ks, deferred comp is at risk in a bankruptcy were that to occur. AIG's top guys thought of themselves first, after everything they have done. AIG is under the gun again for paying 'retention monies' to key staffers and some in Congress wonder if it isn't just a bonus in disguise. Hard to imagine that these AIG guys are in strong demand given what they have done and given the state of The Street... But this last week distinguished itself with two more acts of selfishness. John Thain, once a hero for saving Merrill Lynch by proposing a combination with Bank of America, despoiled his own legacy by asking for a $10million bonus. That request, of course, comes in a year so bad the company sold itself looking for safety. John Mack of Morgan Stanley publicly refused to take a bonus. That was one of the nails in the coffin for Thain's request/suggestion. Thain later 'pulled' the 'request or 'proposal' himself. But the damage was done. Mack said a bonus would look bad...

A bonus would LOOK BAD??? What's the POINT of a bonus anyway?
Mack said it would look bad to take a bonus in such times and he is right. But that in and of itself it is a strange remark. Look bad? Duh? Sure it would look bad. But it would also BE WRONG! You ran a firm into the ground and so it would look bad? Wall Street CEOS did nothing to earn bonuses last year- that's the point, Mr Mack. It's not that it would 'look bad' but that it would be WRONG. Wall Street has clearly lost its ethical moorings. Compensation is out of control. And no one seems to know what you pay people or why. Pay is apparently a birthright or a right of office, regardless of performance. In the case of Thain, he actually had been given a 'bonus' payment on the way in, largely because Merrill wanted him and knew that it might take a while to right the ship. He was the highest paid Wall Street exec in 2007... So he wanted 'another $10mln in 2008. Some hero.

Did Robin Hood skim when he took from the rich to give to the poor?

Leader of the pack or just a bunch of overpaid followers?
Where will our ethical leaders come from? With all this Federal money getting into banks the bankers still seem to think they continue to deserve big pay days. I don't see why. They did not avoid the financial mess. They did not do anything different from anyone else. So they have showed no management skill what-so-ever yet they want to be paid as if they saw it coming and ducked. In truth they did not see it coming and were loaded to the gills, like everyone else, with all the wrong stuff. They drank their own Kool-aid. Do we really give bonuses for that? In the movie 'All that Jazz' the character played by Roy Schieder says 'Don't bullshit a bullshitter'. I think that applies here, don't you?