It Sucked My Soul To Watch This Spectacle
"We're sorry."
If you're a power broker, that's just not part of the vernacular. At least it wasn't true of the Wall Streeters who testified before the Financial Crisis Inquiry Commission on Wednesday. They ostensibly were there to shed more light on the causes of the financial crisis (and hopefully, coax a little contrition out of them.)
Fat chance.
Instead, it became clear from the outset that this crew - JP Morgan's Jamie Dimon, Lloyd Blankfein of Goldman Sachs; Bank of America's Brian Moynihan and John Mack from Morgan Stanley - had their own ideas about who bore responsibility for leading us to this point in America's financial history. And if you thought they were going to play the part of fall guys, think again. They were not here to provide a group therapy session for the public's benefit. The closest anyone got to offering anything remotely close to an apology was Moynihan, who acknowledged that "It has been clear how poor business judgments we have made have affected Main Street."
Excuse Moynihan for being relatively new in his job. The more experienced Blankfein, who dueled with former California state treasurer and commission chairman, Phil Angelides, carried the day with an extended rope-a-dope, weaving and bobbing out of range of repeated probes his interlocutors. And that was the point, wasn't it? Blankfein who last year declared that he was a banker doing "God's work," was trying to be extra-careful not to offer up any evidence that a securities attorney could later use in a lawsuit. In fact, the closest Blankfein ever got to expressing contrition was a half-hearted mention about "the consequence" that people lost money. (Whatever the heck that was supposed to mean.) Give it up to the guy for being able to weasel out of tight corners. Each time a commission member tried to get him to shoulder blame, Blankfein would respond with brilliantly ungrammatical responses that were pure Stengelese.
But Goldman's CEO also wasn't there as a supplicant. He kept interrupting Angelides as if hammering home a point to one his company's denser trainees, making it clear that the public and the media had it wrong and that his institution's practices were prudent and always on the up-and-up. After listening to one of Blankfein's extended non-answer answers about Goldman's practice of buying and shorting mortgage securities, an exasperated Angelides finally declared: "It sounds to me a little bit like selling a car with faulty brakes, and then buying an insurance policy on the buyer of those cars."
It sucked my soul to watch this spectacle. And I'm not one of those who necessarily believes that the answer is to claw back Wall Street's absurdly high bonuses (Holman Jenkins of the Wall Street Journal offers a good argument why this isn't as cut-and-dry as the populists claim.) The problem isn't the performance so much as the whack incentive structure which rewarded - and still rewards - these folks to take excessive risks that can undermine the system. These CEOs run companies that occupied a central role in the financial drama of the last couple of years and they just keep passing the buck.
Earlier this week JP Morgan's Jamie Dimon complained about the vilification of Wall Street. He's quite right about that. There is a change in the zeitgeist. Dimon gave voice to the frustration he and fellow plutocrats have silently suffered since their fall from public grace when he complained about the "constant vilification." He's quite right about that. Not long ago we feted Wall Street CEOs for their supposed brilliance and envied for the gilded lifestyles they flaunted. Now we think otherwise (I'm being kind.) Can you blame us? We didn't expect they would get stoned out of their collective minds, binge like crazed monkeys and make decisions which would force millions of regular folks onto the bread lines.
But if we can't get our pound of flesh, then at least how about a simple apology?