Federal Reserve Chairman Alan Greenspan told a Senate Committee on Tuesday that there is no need to rush to pass new corporate regulatory schemes to prevent more corporate abuses since “corporate governance will be just fine for the next two years because everyone has been chastened.”
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FNC’s Brit Hume highlighted the observation which the broadcast networks ignored.
Hume played this soundbite from Greenspan: “I'm merely saying to go slow in this area. There is not a need at this particular point to rush, because I will tell you, corporate governance will be just fine for the next two years because everyone has been chastened.”
During the panel segment on the July 16 Special Report with Brit Hume on FNC Hume suggested: “That's quite remarkable isn't it that he's saying that in near term, next couple of years, in fact until we have another big bull market with a lot of equity prices at such levels that they can be played around with in mergers and all that, we're not going to have this problem.”
Hume wondered: “He basically said that the corporate governance problem for now is solved. What do you think the chances are that any newspaper that you read, or that anyone else in Washington reads in great numbers, will have that as the headline tomorrow?”
Not Wednesday’s Washington Post, which didn’t mention the point anywhere in its story.
Hume had, however, at the top of his show: “Federal Reserve Chairman Alan Greenspan told Congress today that despite shaken investor trust and a wave of accounting scandals a economic turnaround is continuing. And while the Fed Chairman warned of a skittish market, he also warned Congress against rushing into passing new regulations.”
But that theme was absent from ABC, CBS and NBC as well as CNBC’s The News with Brian Williams. And I didn’t hear it on CNN Tuesday night, but I didn’t see all of NewsNight.
-- ABC’s World News Tonight. Peter Jennings announced, as taken down by MRC analyst Brad Wilmouth: “In the other news today, the Chairman of the Federal Reserve Board talked to the Congress, and everyone on Wall Street was listening. Alan Greenspan told the Senate Banking Committee today the economy was on its way to a full recovery. And his remarks had a positive effect on the markets for a while. Here’s ABC’s Betsy Stark.”
Stark dealt with some of Greenspan’s corporate governance thoughts, including how he favors tougher criminal penalties, but avoided his dislike for the rush to pass new regulations:
“Peter, investors were hoping the Alan Greenspan of mythic powers would have something magical to say to turn the market around. Well, one of the things they learned today is that Alan Greenspan is worried about the stock market, worried that it has the potential to derail the economic recovery. The Fed chairman’s official business today was to report on the state of the economy, which he gave a qualified stamp of approval.”
Greenspan: “While the economy has held up remarkably well, not surprisingly the depressing effects of recent events linger.”
Stark: “Chief among those recent events, the sinking stock market brought low by mounting revelations of scandal and fraud. In unusually blunt language, Mr. Greenspan blamed the market’s woes on self-dealing corporate executives.”
Greenspan: “An infectious greed seemed to grip much of our business community.”
Stark: “And, like the President, he advocated tougher criminal penalties for CEOs who steal from their shareholders.”
Greenspan: “Although we may not be able to change the character of corporate officers, we can change behavior through incentives and penalties.”
-- CBS Evening News. Dan Rather opened the broadcast: “Good evening. President Bush couldn’t do it. Today the chairman of the Federal Reserve tried, tried to calm nervous investors and stop the slide on Wall Street. Alan Greenspan, who once warned against 'irrational exuberance,’ today was cheerleading -- cautious optimism. For a while, it appeared to work. After Greenspan spoke, the market stabilized. But then, investors pushed down the button again. The sell-off resumed and the Dow finished another triple digit loss day. CBS’s Anthony Mason reports on Dr. Greenspan’s house call to the Senate.”
-- NBC Nightly News. Tom Brokaw led the show: “Good evening. When Federal Reserve Chairman Alan Greenspan appeared before Congress today, it was a classic case of good news, bad news. Good news: The American economy is poised for a healthy rebound. The bad news, he said corporate scandals and world events, including terrorism, could weaken the recovery. Wall Street investors were betting on the bad news again today, driving the Dow down 166 points, the seventh consecutive losing day. Nasdaq lost more than seven points on the day. Besides the scandals, some big names in American business checked in today with discouraging news about earnings. We’ll begin tonight once again with NBC’s Anne Thompson at Nasdaq.”
Thompson ignored Greenspan’s belief that new regulations are not needed and stressed how he favors tough criminal penalties: “Greenspan praised the Senate for voting last night to toughen penalties on unscrupulous corporate leaders. The House did the same today. Greenspan saying a company’s behavior often is a reflection of its CEO’s character.”
Greenspan: “I don’t see how one can effectively legislate morality or character, but what you can do is to try to create an environment and a legal structure which very significantly penalizes malfeasance.”
Thompson: “Some Fed watchers heartened by what they say is the tough stance of the Fed chairman.”
Paul McNulty, PIMCO Funds Portfolio Manager: “I think that will go a long way in restoring investor confidence in the notion that crooks do not run America’s businesses.”
Thompson: “But others disappointed, believing Greenspan squandered an opportunity to show needed leadership.”
Stephen Roach, Morgan Stanley Chief Economist: “The problem is we’ve nothing new on proposed remedies to those problems from the President to the Fed chairman.” |
