Margaret Carlson, best commentary I have read in a long time.
Paulson Steals Show From the Grinch: Margaret Carlson
Commentary by Margaret Carlson
(Corrects seventh paragraph to billion from million.)
Dec. 24 (Bloomberg) -- ‘Tis the season to be jolly, but I’m rarely jolly under the best of circumstances. Just ask my family.
This year, I don’t see there’s a lot to be jolly about. At first, I thought President-elect Barack Obama’s choice of Saddleback Church Pastor Rick Warren, the most open-minded of evangelicals, to give the inaugural invocation was OK, even though Warren is leading the fight against gay marriage. The invocation is brief and not long remembered. (Who gave the invocation in 2004? Time’s up, close Google. It was the Reverend Kirbyjon Caldwell.) You don’t have to see eye to eye to occasionally walk hand in hand.
Then I learned that Warren won’t admit gays to his congregation. How different is that from motel owners in the South who wouldn’t rent a room to Colin Powell when he was a young military officer driving his family from one post to another?
Of even less jolliness is the lasting pain from the giant giveaway of billions to financial firms by Treasury Secretary Hank Paulson. Did I hear someone say “making a list, checking it twice?” Not Hank. He might as well have made the checks out to cash. Come to think of it he did.
The money is supposed to be used to ease the credit crisis, not saved to buy weaker banks, or pay dividends and bonuses. A recent report by the bipartisan Government Accountability Office concluded there is a “heightened risk that the interests of the government and taxpayers may not be adequately protected and that the program objectives may not be achieved.”
Sorry, Can’t Say
The Associated Press tried to do what Paulson hasn’t, asking 21 banks how much they’ve spent and on what, how much is being held in reserve and what their plan is for the rest. The folks responsible for the mess, in possession of billions of our dollars, were too arrogant to say.
JPMorgan Chase & Co. said of its $25 billion haul: “We’ve lent some of it. We’ve not lent some of it,” AP reported. Now get lost.
Bank of New York Mellon Corp. spokesman Kevin Heine told AP, “We’re choosing not to disclose that.” Wendy Walker of Comerica Inc., after refusing to share any details, said, “We’re not sharing any other details. We’re just not at this time.”
What time would be better, Ms. Walker? Never. I bet never is good for you.
Financial superstars got used to talking this way when they were lionized as American royalty. Sprawling oceanfront estates the size of hotels, private 737s outfitted like palaces weren’t marks of wretched excess but totems of swashbuckling capitalist derring-do. Charity auctions where moguls outbid each other for a 1982 Lafite Rothschild were chronicled not as one more occasion to flaunt their surplus millions but characteristic acts of pure generosity.
Moving Money
This happened even as almost no one knew what these geniuses were doing. They weren’t making anything like a railroad you could see. They were moving money from one place to another, keeping some for themselves as it changed hands.
Try to follow the trajectory of a mortgage on a house in Cleveland into a bundled credit default swap of collateralized debt. Few could, yet paydays of $30 million and bonuses of twice that were based on it. Therein lay its charm.
Just as now, no one was asking pesky questions. Regulators under President George W. Bush didn’t much regulate on the theory that bankers were truly Masters of the Universe and too rich to steal. Congress wasn’t on the case, too busy begging these same executives for alms known as campaign contributions.
Thanks to an economic meltdown, we now know the decade’s financial superstars walked off with money they didn’t earn in a scheme more sophisticated but no less damnable than a punk in a ski mask holding up a convenience store.
No Heads Rolling
You would think heads would roll, some into jail. I’m not just talking about Bernard Madoff. I’m talking about the titans of commerce.
They still walk the streets, when in truth schemes should be named after them. Ponzi just doesn’t do justice to what they pulled off.
Instead, these same folks got more money, as if bringing the greatest financial system in the world to its knees deserved a reward. It’s the ultimate in trickle-down economics: If the bankers are OK, we’ll all be OK.
Where’s the money gone? Some of it paid for a trip to England for a partridge hunt, some to retention bonuses, but we don’t really know. I’d like to hang the Treasury secretary atop the Christmas tree and pelt him with tinsel until he tells us. Oops, I forgot. He doesn’t know and wouldn’t want to pry.
Where’s the Outrage?
But why isn’t anyone screaming about giving these miscreants more money? Who’s in charge here? Surely, there is someone left with a conscience, and a pulse, in the White House, someone in Congress who can call a hearing and rough up these bankers at least as much as they did the auto industry.
Fortunately, I’ve found something even a Grinch can be jolly about: Reverend Warren’s stricture against gays in his church was removed from his Web site this week. And for 2009, the number of applicants to Teach for America jumped to 25,000 from 18,000 for 3,700 chances to serve in the poorest schools.
Part of the increase is due to studies showing how effective such teachers are. Another part is a change of heart by the smartest young people, many of whom are no longer lured by quick riches to go into investment banking to the detriment of science, medical research, academia and public service.
The best and the brightest want to do good instead of doing well. I’ll raise a glass to that.
(Margaret Carlson, author of “Anyone Can Grow Up: How George Bush and I Made It to the White House” and former White House correspondent for Time magazine, is a Bloomberg News columnist. The opinions expressed are her own.)
To contact the writer of this column: Margaret Carlson in Washington at mcarlson3@bloomberg.net
Last Updated: December 24, 2008 09:30 EST
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