Tuesday, September 23, 2008
Ladies and gentlemen of the jury, the Wall Street executives you see hanging their heads have been called many things, chief among them "greedy." But in deciding their guilt, you must consider mitigating circumstances. Compare these two sets of circumstances.
A robber goes into a convenience store, sticks a gun in the manager's face and demands the contents of the register. The robber has committed a vicious crime. He deserves the harshest sentence.
But suppose the convenience store owner had left the cash register open and gone out for a smoke. The bad guy walks in, sees the bills hanging out, helps himself and then leaves. Is he breaking the law? Yes. But is this the terrible crime of armed robbery? No.
The careless store manager was in some way a party to this crime. And so are you, the voters of America. You did not demand the proper monitoring of the markets and the plunder that inevitably followed. The Bush administration's $700 billion bailout of bad debt is proof that, all along, the American cash register had been left open.
The modern Republican philosophy of deregulation was clearly a sham. According to that ideology, Washington would let the traders and speculators and pushers of risky debt do as they pleased. The markets would punish fools for their mistakes. But as you can see, Washington won't let the markets fully do their work, because their job right now is to crash. Unfortunately, the world economy would crash with them, thus the Bush administration is transferring the bad debt to the taxpayers.
The dictionary defines greed as "an excess desire to acquire or possess more than what one needs or deserves, especially with respect to material wealth." Do these millionaires and billionaires sitting here in the courtroom fit that description? That's a value judgment for you to make.
But to those of us who still believe in Darwinian science, the defendants were just doing what came naturally. The giraffe with the longer neck can reach the highest leaves. The faster lion gets the meatiest part of the warthog. These creatures, those best able to secure food, are the ones who survive and reproduce. That's why over the millennia the giraffes developed long necks and lions speed -- evolution at work.
On Wall Street, money is the colorful plumage that attracts others of the species. You put on a magic show convincing the public that you can create gold out of whatever mysterious financial derivative is hiding behind the curtain, and riches follow.
Dick Fuld, the former chief executive of Lehman Brothers, did not personally make $490 million dollars by carefully investing his stockholders' money. He made it by having Lehman borrow 35 times its capital, an extraordinary amount of leverage that Washington evidently considered none of its business.
How can one consider Fuld a survivor? After all, Lehman Brothers has just gone bankrupt. True, Lehman investors are now carcasses drying out on the Serengeti Plain of finance. But Fuld is doing OK. He had long ago pocketed his half billion by cashing in the stock options and stock he received as Lehman CEO, according to Time magazine.
That's the way it's done. You get your money upfront, then pass the risks on to others. The chump of last resort is apparently the American taxpayer.
Ladies and gentlemen of the jury, you don't accuse the coyote of greed when it attacks your chickens. You put a fence around the poultry. It was the law of the jungle on a Wall Street that will never fully pay the consequences. And guess who the chickens are. You.
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