Once upon a time, Wall Street bankers caught in the traps of their own avarice would be searching by now for the taller skyscrapers in town, looking for good places to jump.
Richard Fuld, the chairman of what only yesterday was Lehman Brothers, has a suite of grandly furnished offices on the 31st floor of his building - assuming security has not already been called - but that might not be quite high enough. But the only flier he’ll be taking is aboard a jet plane big enough to haul himself and the $22 million bonus he’ll collect as he leaves for parts unknown. The door won’t even bang his ample rear end on the way out.
Mr. Fuld is not the only “failure” suddenly on the street, nor will he be the last. The filthy rich, like the poor, will be with us always, coddling their golden eggs and leaving behind only a dead goose. Ordinarily, the rest of us can afford to be more or less oblivious of the rapacity and gluttony of the Wall Street greedheads, with their collection of million-dollar houses on several continents, their trophy wives, their discarded wives and the spoor they leave scattered like autumn leaves across the land. The poor schlubs on the streets where the rest of us live are only here to pay for cleaning up the effluvia of their cupidity and covetousness.
Winston Churchill famously said that the only virtue of capitalism is that it is slightly better - but only slightly - than all the other economic systems. This was not a hosanna for free markets or even scorn for the “virtues” of other economics so much as a comment on the capacity of unredeemed human nature to inspire disaster. Man, by nature fallen, invariably falls on innocents. We’re seeing this played out again.
Being human and equipped with a standard-issue fallen nature, both John McCain and Barack Obama hustled Monday to put a selfish spin on what Alan Greenspan calls the “once-a-century” meltdown of the financial markets. Mr. McCain agrees there should be no government rescue of the flailing greedheads this time, that what we need is reform of the “outdated and ineffective patchwork quilt of regulatory oversight in Washington.” He’s got just the right reform team in mind, and one of the team comes with spiky red heels with a point to inflict pain when applied to the proper part of the anatomy.
Barack Obama, trapped in the prison of the past, naturally blames “a failed philosophy” that he doesn’t want four more years of. The news that an election seven weeks hence will wipe the slate clean, that George W. Bush will soon be chopping wood on Prairie Chapel Ranch in any event, has not yet shown up on his teleprompter.
The frantic day on Wall Street ought to be enough to humble the most arrogant master of a universe revealed to be smaller than we imagined. The day that Lehman Brothers, after 158 years, sank into bankruptcy the iconic brokerage house Merrill Lynch sold itself to Bank of America, like a street hooker offering a dramatic discount to get off the street before the vice cops arrive. Poor Merrill Lynch. Merrill Lynch, Pierce, Fenner and Beane years ago kicked Mr. Beane out for a guy named Smith, and not so long ago dropped Messrs. Pierce and Fenner along with the newly arrived Mr. Smith, just to get rid of those pesky commas. And now this. “I’ve been in the business 35 years,” says Peter Peterson, once head of Lehman Brothers and secretary of commerce in the Nixon administration, “and these are the most extraordinary events I’ve ever seen.”
The silver lining in the cloud over Wall Street, except for the innocents (if any) who trusted the masters of the universe, is that the government has finally knocked away the federal crutch that the irresponsible money-changers have counted on to save them from themselves. The Bush administration, in the person of Treasury Secretary Henry M. Paulson Jr., has signaled that the greedy who are too big to fail are merely too big for their britches. Alan Greenspan, ever wary of government intrusion into the economy, nevertheless says there are “certain types of institutions” so fundamental to the economy that the government can’t let them go belly up, lest the splash drowns others who, unlike these big institutions, don’t deserve to drown.
No doubt true. But the men (and women) guilty of driving these institutions to ruin ought not to be entitled to second and third chances to do it again somewhere else, but retrained for jobs plucking chickens or scouring septic tanks. A kindly curmudgeon would give them directions to the nearest skyscraper.
• Wesley Pruden is editor emeritus of the Times.
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