Ward on Words

I have not read Tim Geithner's memoir of the crash, Stress Test. [I did read Hank Paulson's memoir of the crash - and discovered that we shared three things in common - birding, residence in Barrington IL (I lived there once, a long time ago) and a love of the boundary waters near Ely MN. Otherwise, Paulson and I do not see eye-to-eye on much, particularly on his handling of the bailout.] I don't know if I will read Geithner's book. It is well-written, says Michael Lewis (author of Liar's Poker) in a NY Times review. But as I read Lewis's review, I wanted to throw the book at a wall - and I don't even own the book. Lewis quotes Geithner as saying: "We did save the economy, but we lost the country doing it..."  (My God! Is the economy "saved"? Not in my neck of the woods! But the country was indeed lost as a result of the crash.) Lewis goes on to say: " Geithner seems genuinely to believe that the details of the behavior in...

Two posts in the blogosphere caught my eye this morning - both focusing on consumer leverage. Calculated Risk  points us to a Federal Reserve press release noting the "April 2011 Senior Loan Officer Opinion Survey. " Opinions are good, but the release also seems to indicate there is data showing banks are easing standards and terms on loans for both businesses and consumers. Especially consumers: "...And the net fraction of banks that reported having become more willing to make consumer installment loans rose to its highest level since the first half of 1994." The whole mortgage-backed thing is kind of in the toilet right now, along with home prices, but this info from the Fed indicates banks are willing to lend to consumers without requiring a home to serve as collateral for the loan. My initial response was cautious optimism. Perhaps the investment the nation  had made in the banks (via TARP, etc.) was finally paying off with bankers now investing in consum...

In Alan Greenspan's book, The Age of Turbulence , one of the issues he explores is the failure of economic populism in Latin America. Here are his thoughts: " The dictionary defines 'populism' as a political philosophy that supports the rights and power of the people, usually in opposition to a privileged elite. I see economic populism as a response by an impoverished populace to a failing society, one characterized by an economic elite who are perceived as oppressors. Under economic populism, the government accedes to the demands of the people, with little regard for either individual rights or the economic realities of how the wealth of a nation is increased or even sustained." So in Greenspan's view as a self-described Libertarian Republican, economic populism comes to life in "failing societies" that have significant income inequality and are dominated by an economic elite. And in Greenspan's mind, it is not the government that can make t...

Was startled by the photo that appeared on the front page of today's WSJ. It seems strangely plopped into the general news of the day: showdown on fund taxes; incumbents in danger of losing; poor South Africans protest against government neglect. And in the middle of the page, a striking photograph of two men in a moment of intimacy. Click on that link and you'll see the image of one soldier comforting a seriously wounded comrade. This is a picture of man at his most vulnerable. A soldier wounded in Afghanistan. A man far from home. Surrounded by enemies in a foreign land. Sent there to protect his country. A friend holds a Bible and offers a cigarette to comfort the wounded man. He is reading the wounded soldier's favorite Psalm, Psalm 91. It appears as if someone else not in the picture is holding the wounded man's hand. In a moment of horror, a wounded soldier finds solace from God and men. This picture haunts me. It reminds me that in our time of need, ...

...for all 30 members of its management team. Nice press release includes few pertinent details. Would love to know if this means the 30,000+ employees not affected by this plan now get bigger bonuses. After all, Goldman's $17 billion bonus stash needs to be distributed to the many thousands of deserving employees, right? In the press release, Lloyd Blankfein offers up this quotable nugget: "The measures that we are announcing today reflect the compensation principles that we articulated at our shareholders' meeting in May. We believe our compensation policies are the strongest in our industry and ensure that compensation accurately reflects the firm's performance and incentivizes behavior that is in the public’s and our shareholders’ best interests. "In addition, by subjecting our compensation principles and executive compensation to a shareholder advisory vote, we are further strengthening our dialogue with shareholders on the important issue of compe...

Sheldon Kornpett, a very successful Manhattan dentist, is at a point in his life when he should be collaborating with his family to finalize his daughter's wedding plans. However, less than 24 hours after meeting his daughter's future father-in-law for the first time - and the day before the wedding - Sheldon's life is in an uproar. Instead of treating patients for crowns and cavities and celebrating his daughter's upcoming nuptials, Sheldon instead finds himself dodging bullets on the tarmac of a primitive Central American airport. If you're a fan of Alan Arkin, you know that Sheldon Kornpett is a character he played in the 1979 film The In-Laws. His counterpart, Vince Ricardo, the man who dragged Sheldon into a bizarre plot to take down the global economy, is played by Peter Falk. Here, the day before his daughter is to marry, Shelly learns to serpentine.... With the entrance of Vince Ricardo into Shelly's life, all the normality of his life has v...

In February, Frontline aired a documentary "Inside the Meltdown, " a documentary on the financial crisis. I was very busy with work and missed it when it aired on TV, but watched it last night online. I recommend it as a great resource for anyone looking for information about the collapse of our economy. At one point, Senator Dodd recounts the moment the Treasury Secretary informed an elite group of Congressmen about the situation. After being told that Congress needed to hand over vast sums of money or the global economy would collapse, says Dodd, "there was literally a pause in that room where the oxygen left." We were all left gasping for air when we were told that "the system" was drowning in toxic assets and the great titans of capitalism needed socialism to save them. Money from the feds was needed - vast sums of money, trillions of dollars had to go to these Wall Street firms to "bail them out" - no strings attached. That ...

According to a story in yesterday's NY Times, those who work at Wall Street firms "are on track to earn as much money this year as they did before the financial crisis began, because of the strong start of the year for bank profits." I have to wonder - where is this money coming from? Aren't these firms clogged up with toxic assets? Didn't the negative balances on the books of these companies drag down the country's economy? So why aren't profits for this quarter being used to recapitalize after the losses of last year? Have we reached a point in American capitalism that only the taxpayer responsible for the losses on the books of the Wall Street firms?

David Brooks' recent op-ed piece in the NY Times takes a look at what happened to the global economy. Why has all hell broken loose? Was it greed or stupidity? In that he is a conservative Republican, Brooks does not agree with the "greed narrative" being used to answer the question, most notably defined in "The Quiet Coup" by Simon Johnson. In this narrative, greedy oligarchs usurped our democracy and took over our government. Instead, Brooks finds comfort in the "stupidity" narrative, in which "overconfident bankers didn't know what they were doing." Brooks see logic in the idea that the steady stream of Ivy League MBAs that populated Wall Street were too stupid to understand what was going on under their noses in their businesses. Too stupid to realize that they had no capital supporting their loan policies. Too stupid to understand that the insurance devices they were selling were insufficient to cover the potential l...

On February 11, CEOs of eight debt-ridden banking firms appeared before Congress. The WSJ live-blogged the proceedings . To see what these leaders have to say is an eye-opener. It seems like no TARP was ever needed or wanted by these executives, according to their testimony.... J.P. Morgan CEO Jamie Dimon: “While we did not seek the TARP funds…to strengthen our already-strong capital base…we are using that money to expand the spirit of TARP.” (It was my understanding the spirit of TARP was to inject capital into firms that were desperately undercapitalized - so one must wonder why JP Morgan felt compelled to put the hand out for federal funding...) Bank of New York Mellon chief executive Robert Kelly (whose bank was apparently profitable throughout 2008): “We were strongly encouraged to participate [in TARP] and we did, very quickly.” (Who encouraged this savvy leader to take money his company didn't need? And why did he comply?) Goldman Sachs CEO Lloyd Blankfein: “...

Ragan.com offers "news, ideas and conversations for communicators worldwide," and today, one of their stories covers the nightmare on Wall Street. In the Ragan story , given that the audience is communicators, the nightmare is defined as a "PR nightmare." What can communicators do to help solve this "PR debacle"? As a communicator myself, I have to point out that this is not really a crisis of communication - this is a crisis of leadership. These companies have been following a business model that brought them to the brink of bankruptcy. So we're not seeing the result of "bad PR" right now. The actions of the corporate leaders themselves has proven to be indefensible. Recipients of federal funds took off for a $400,000 spa visit, tried to buy a corporate jet, paid out billions in bonuses. It's rarely easy for communicators to spin straw into gold. And now, instead of acting prudently, instead of conserving money, Wall Street...