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Should Wall Street Apologize?

Updated on September 25, 2008

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Is It Enough To Hear Wall Street CEOs Say "I'm Sorry"?

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Is Steven Pearlstein Right?

By JAMES F. HENRY

Bull Moose Magazine Publisher

Washington Post Business Columnist Steven Pearlstein wrote in his column on Wednesday, 24 September 2008 that Wall Street owes the American public an apology for the sins of their past. At the same time, Pearlstein rejects popularly held ideas that CEOs should have their salaries capped at $400,000 (the salary the President of the United States receives) and at the notion that severance language in their contracts should be removed, in exchange for a piece of the $700 billion the administration has proposed the American Public shell out to bail out Wall Street. So the question that must be asked is, would it be enough to hear a Wall Street CEO to say, "I'm sorry"?

I'm a father, and am pretty good at motivating my children to do things they don't want to do. One of the motivational techniques I (and doubtless most parents) use is to give the child two equally unattractive options and let them choose which they want to do. So here's my thought. If the CEO of Fannie Mae Herbert M. Allison, Jr. wants to keep severance language in his contract, he should be given a choice. We could ask him to run up and down Wall Street naked, screaming like a mad man, with cameras rolling for the 6 o'clock news. If he doesn't want to do that, then he gets an annual salary of $400,000 with no severance.

Now, I should let you know that Mr. Allison did not create the problems at Fannie Mae that led to his status as CEO. In fact, he was hired to replace Daniel Mudd, after the Federal Government took control of Fannie May a couple weeks back. So maybe it should be Mr. Mudd streaking down Wall Street.

As an aside, I was intrigued to read that Mr. Allison has ties to Sen. John McCain, having served as McCain's treasurer for his 2000 presidential bid. Interesting.

Back to the original question, is Steven Pearlstein right? Myself, I just don't think it would be enough to hear those Wall Street tycoons say they are sorry, because I wouldn't believe it for one second, any more than I do when I order my nine year old son to apologize to my five year old daughter for any number of offenses he has committed against her. Yes, there is the punitive factor of having to admit guilt, but do I think it would change anything if I heard Michael Sullivan, former CEO of AIG, say, "I'm sorry," while his successor holds out his hands asking for the coveted bailout bucks?

I don't think Pearlstein's suggestion goes far enough. I want a punishment for these yahoos that is so severe that we can be certain that they will learn from the error of their ways and never make these mistakes again.

I want to hear Richard Syron, the recently departed CEO of Freddie Mac, to go before Congress and say, "We would love to have tons and tons of Government oversight of all our business practices," in exchange for the $14.1 million severance package he received when he departed a couple weeks back.

Then and only then will I feel secure that the ungodly amount of money George Bush believes Wall Street needs to right the ship will be secure.

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    • profile image

      pgrundy 8 years ago

      Apologies are worthless at this point. I say go for indictments. Good hub, thank you for keeping this issue alive.

    • Amanda Severn profile image

      Amanda Severn 8 years ago from UK

      You would think these severance packets could be dictated by the government if they're bank-rolling the end-game. If I was handing over that kind of cash then I'd certainly be putting some pretty stringent conditions on it's use and they would not include golden handshakes for the incompetent employees who were the architects of this disaster.

    • talented_ink profile image

      talented_ink 8 years ago from USA

      An apology is pointless and insulting if there's no real remorse for the crimes and frankly, I don't think anyone responsible for the state of America's financial upheaval is truly sorry. When a $700 billion "bailout" was introduced, they cried out against oversight so if they don't want to be investigated when it comes to how the money is spent, then I know that they don't care about how their actions affect other Americans. Good hub nonetheless!

    • crashcromwell profile image
      Author

      crashcromwell 8 years ago from Florida

      Obviously I agree with the sentiments expressed above. One of the amazing parts of this whole process is that I know that Senators and Congressmen all over America are being inundated with calls, emails and letters from constituents telling them that they are opposed to any kind of bail out. Yet I am resigned to the fact that the next hub I write on this subject will be analyzing the bill that Congress actually passes. This is not a partisan issue, because it appears that the whole lot of them have drunk the cool aid already.

    • Chef Jeff profile image

      Chef Jeff 8 years ago from Universe, Milky Way, Outer Arm, Sol, Earth, Western Hemisphere, North America, Illinois, Chicago.

      If i weren't one of those opposed to the death penalty, I'd say public guillotining in Times Square, with all channels forced to show the gruesome display, might assuage my anger, but then and again, it might not!

      But being one of those opposed to the death penalty, I guess we'll have to settle for whatever gets done for us by politicians who forget for whom they work. Public servants, indeed! More like public nuisances!

    • bill yon profile image

      bill yon 8 years ago from sourcewall

      they should be held accountable for there actions!I'm talking prison time!they should be stripped of every dime that they possess and banned from the financial markets forever!!!!

    • crashcromwell profile image
      Author

      crashcromwell 8 years ago from Florida

      Bill - I am heartened by the fact that the FBI is investigating the management of the big companies, to see if fraud was committed. If it was, I suspect you'll get your wish, at least as far as prison time is concerned.

    • profile image

      SirDent 8 years ago

      It's easy to say I'm sorry when you have pocketed billions upon billions of dallrs from those you are apologizing to. In fact, they would probably give you a hug before they remove your wallet from your pocket to see if they missed some.

    • crashcromwell profile image
      Author

      crashcromwell 8 years ago from Florida

      Someone made the very observant point that when it comes to making profits, these tycoons want deregulation but when they fail, that's when they want socialism. They get money coming and going, whether they deserve it or not. Pretty sweet deal.

    • Mighty Mom profile image

      Susan Reid 8 years ago from Where Left is Right, CA

      Just tuning into your hubs, Mrs. Crashcromwell (based on your post about "our" Red Sox losing to TB last night). Your journalism background definitely shows.

      As to the wall street weasels. Love means never having to say you're sorry. So show me the love. Better yet, show me the money!!!

    • crashcromwell profile image
      Author

      crashcromwell 8 years ago from Florida

      I'm not sure which is more painful - considering the state of our economy or the long, cold winter we'll have to endure before the Sox report to Fort Myers!

      Thanks for the comment Mighty Mom!

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