"Get it Back"

Preventing Depression --
Financial & Otherwise

[Editor's Note: Realtors are private citizens and taxpayers, too. You'd have to be living in cave not to be aware of -- and outraged by -- the conduct of Wall Street principals in the ongoing financial mess. The following post is a response to that behavior.]

Dismayed -- infuriated? disgusted? -- by the drumbeat of daily news documenting Wall Street excess, arrogance and entitlement? I am. I feel like the attorney confronting Joseph McCarthy in the famous 1950's hearings: "Have you no sense of decency, sir? At long last, have you left no sense of decency?"

Unfortunately, today the object of that revulsion isn't an individual but seemingly an entire industry, if not a culture.

With all the talk in the air of a 1930's-style financial Depression, there's no mention of another kind of depression: the psychological kind.

According to Psych 101, anger channeled inward becomes depression. Not holding Wall Street accountable for the myriad affronts to basic standards of decency risks a collective emotional Depression. (Interestingly, depression is linked with another mental state: learned helplessness.)

Forget about fear. Today, the biggest threat to our collective, extremely beleaguered "animal spirits" is bottled-up rage.

So here's my prescription: don't get mad, don't get even . . . get it back.

Keep reading:

I think there is an illness called Goldmansachs Head . . . When you have Goldmansachs Head, the party's never over. You take private planes to ask for bailout money, you entertain customers at high-end spas while your writers prep your testimony, you take and give huge bonuses as the company tanks. When you take the kids camping, you bring a private chef. Goldmansachs Head is Bernie Madoff complaining he's feeling cooped up in the penthouse. It is the delusion that the old days continue and the old ways prevail and you, Prince of the Abundance, can just keep rolling along. Here is how you know if someone has GSH: He has everything but a watch. He doesn't know what time it is.

--Peggy Noonan, "Look at the Time"; The Wall Street Journal (1/30/2009)

Let’s insist with all our pent-up anger that those industries that are failing either be allowed to fail or be nationalized, and that their leaders be fired and brought to justice. For, in truth, their behavior has been criminal in its misuse of investor and government funds. The injury they have caused the country cannot be repaired quickly, but they can certainly be made to suffer where it matters most: why not confiscate every dollar they own, and their families own? This money is owed to us not under a Marxist-Leninist belief (although that is looking more appealing everyday) but because they actually, directly stole it.

--Paul Jenkins, "Shameful Bankers: Time for a Revolution"; PJPolitics Blog (1/29/2009)

"If you don’t pay your best people, you will destroy your franchise" and they’ll go elsewhere, [ex-Merrill CEO John Thain] said. Hello? They destroyed the franchise. Let’s call their bluff. Let’s see what a great job market it is for the geniuses of capitalism who lost $15 billion in three months and helped usher in socialism . . . How are these ruthless, careless ghouls who murdered the economy still walking around (not to mention that sociopathic sadist Bernie Madoff?) — and not as perps? Bring on the shackles. Let the show trials begin.

--Maureen Dowd, "Wall Street's Socialist Jet Set"; The New York Times (1/29/09)

Objections

"No legal grounds," you say?

It's been almost twenty years since I practiced corporate law, and yet I can come up with multiple causes of legal action without breaking a sweat (and lawful prosecution is everything -- otherwise, it's just a witch hunt and a mass venting of anger -- no matter how gratifying that they may be!).

For starters:

--Corporate waste (this means squandering assets one is charged to safe keep; I'd call this one a bulls' eye);
--Breach of fiduciary duty;
--Self-dealing (a specific type of breach of fiduciary duty);
--Filing false and misleading financial statements. Shareholders in many cases literally never saw what hit them because the really toxic, leveraged stuff was buried in off-balance sheet entities.
--Attesting to false and misleading financial statements (a separate offense under Sarbanes-Oxley)
--Insider trading. How many senior executives "pulled an Enron?" That is, they privately liquidated their company holdings while reassuring employees and shareholders that the market's fears were overblown. Or out-and-out exhorted them to buy. Let's use our subpoena power (below) to find out.

Undoubtedly, better and fresher legal minds can add considerably to this list.

"The money's already gone," you say?

Imagine telling your credit card company that you won't be mailing in your payment this month, and not to bother coming after you, because "you've already spent the money."

Even at $35,000 a toilet (what ex-Merrill Lynch CEO John Thain spent), you simply can't dissipate hundreds of millions (or billions) that fast. I have a strong suspicion that many of these former (and unbelievably, current) masters of the universe -- stock market reversals notwithstanding -- are far from judgment-proof (legalese for "broke").

Fortunately, our legal system has a variety of tools for recovering money from dry -- and not so dry -- wells. Liens. Garnishment. Security interests. Injunctions on spending. Forfeiture. Asset freezes. Rescinding fraudulent conveyances. Where there's a will, there's a way.

"Public Defenders," or, "Where's Elliot Spitzer
When You Need Him?"

So what can you or I, as private citizens, do to see that anyone who broke laws is prosecuted?

Short answer: we shouldn't have to. Even posing the question is a Red Herring.

As taxpayers, we collectively employ thousands of attorneys at the local, state, and federal levels of government -- and tens of thousands more support staff -- all sworn to enforce existing laws and protect our interests.

That includes 50 state attorneys general; hundreds of U.S. district attorneys; the U.S. Attorney General and Solicitor General, and hundreds more attorneys at the Securities and Exchange Commission.

Fortunately, our "public defenders" have a variety of legal tools at their disposal-- including broad subpoena powers -- to compel testimony and uncover the truth, find and recover ill-gotten assets, etc. Use them.

Yes, our legal system -- wisely -- has safeguards against compelling self-incriminating testimony (it's called the Fifth Amendment). That's why you don't have to submit to a breathalyzer test if you're charged with drunk driving. But if you don't, you automatically forfeit your driver's license and are taken into custody (at least in Minnesota). It's not hard to come up with analogous consequences for financial miscreants.

And yes, holding Wall Street accountable raises complicated, jurisdictional issues, questions of federal preemption, etc. But so what? Attorneys tackle and sort out such issues every day.

On the simplest, most fundamental level, what we have just collectively witnessed -- and continue to witness -- isn't complicated, it's quite simple. Namely, greed run amok.

Naming that behavior and holding the most egregious perpetrators accountable is the first step towards national healing -- financial and otherwise.