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Greed isn't good: No awards for the latest Washington performance
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It’s like a bad remake of “Wall Street,” one filled with greedy CEOs, backstage machinations, the little guy who does the work left hanging when the firm goes under. And riding to the rescue — probably too long after the fact — are public servants who may find that nothing they can do will really have any impact.
Not a very entertaining flick, especially since it’s not the product of some screenwriter. It’s the real world, baby, and middle-class Americans are stuck in the middle of the madness.
Congress has started its investigation about what went so wrong on Wall Street, and the players in this tragedy are anything but sympathetic, no matter how hard they might try. We’re reminded of poor old Kenneth Lay, once CEO of Enron, whose wife wanted sympathy because they were forced to sell a couple of their multiple luxury homes.
Richard S. Fuld Jr., the CEO of now-bankrupt Lehman Brothers, had the starring role on Monday.
And no matter how many times he sighed or furrowed his brow, all we learned was that Marie Antoinette and “Let them eat cake” had nothing on this guy.
According to The Associated Press, Fuld said that “a compensation system that he estimated paid him about $350 million between 2000 and 2007, even as the company headed for disaster, was appropriate.”
A compensation committee put “a tremendous amount of time making sure that the interests of the executives and the employees were aligned with shareholders.”
Well, goody for them. They were so considerate of their executives, in fact, that just prior to the company’s failure, the fix was in; two executives who left the company “involuntarily” were scheduled for payments totaling more than $18 million. The guy who was leaving on his own was to receive a measly $5 million.
Not bad for a day’s work. Four days later, Lehman hit the skids and it was just the beginning of what led to the $700 billion bailout (now called a “rescue plan”) for Wall Street that so far has only succeeded in making investors too skittish to do anything but scurry to get their money elsewhere.
Also revealed in the hearing was the fact that in an e-mail Fuld “dismissed” the suggestion that executives should refuse bonuses to at least let the employees and investors know “that management is not shirking accountability for recent performance.”
Fuld’s response was terse: “Don’t worry — they are only people who think about their own pockets.” Another member of Lehman’s management team — a cousin of President George W. Bush — “breezily shot down the idea,” according to the AP report: “Sorry team,” wrote George Walker in an e-mail. “I am not sure what’s in the water at Neuberger Berman,” Lehman’s money management subsidiary that made the apparently outlandish suggestion to forego bonuses for executives and actually attempt to salvage the company.
And, of course, there’s a political aspect as well. House minority leader Rep. John Boehner, R-Ohio, said it was naturally the Democrats’ fault that all this juicy information didn’t come out before the bailout passed. Boehner, you might recall, was one of the House members who presented an alternative bailout proposal at the 11th hour, and if he mentioned background on company failures, we must have missed that report.
We favored the bailout; we still think it was the only alternative. Now, like you, we’re hoping it works — and doesn’t just end up being yet another “us against them” political mess not even worthy of Oscar consideration.
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