Paraphrasing a quote from Friedrich Nietzsche, the German philosopher: It matters less that you lied to me, as it matters more that I can no longer trust you. In any relationship, this quote describes the unfortunate epiphany when one realizes that another party has lied to them. Trust is built over time, day by day, brick by brick. Yet, a lie can bring the whole building down and cause you to re-earn that trust. Today, I want to focus on leadership letting us down by not shooting straight with us. Oftentimes, when a leader lies or cheats, it is to protect his job or gain a huge return.
Many of the companies who failed us under the financial crisis – Bear Stearns, Lehman Brothers, Wachovia, Merrill Lynch, Washington Mutual, AIG and so on, either no longer exist, were bought by someone else or received a huge bailout to make it through. Some of the bigger ones who survived, such as Bank of America, JP Morgan Chase and Citigroup, are still dealing with issues they perpetuated or acquired from one of the above companies. At the heart of these problems were companies trying to make huge amounts of money off selling mortgage loans to people who could not afford them, packaging the bad loans in bundles and selling them off as reasonable assets. One of the fallacies of spreading risk by bundling is if all of the risk is crap, it won’t be better when bundled.
Yet, the leaders of these companies failed to be good stewards to the customers, fellow employees and managers, shareholders and regulators. If you read “Crash of the Titans” about Merrill Lynch and Bank of America, you will realize that only a handful of people in Merrill knew what was going on, but the CEO lied to his other direct reports and lied to his shareholders when questioned. As a result, the shareholders and public were misled. If you follow-up on Lehman Brothers, who went under, you will see that the CFO moved $50 million to the onshore books from the offshore books for the regulators’ eyes and then moved it back again. This was reported by “60 Minutes.” Yet, to this day, no one from Lehman has gone to jail.
In each of these cases, you will find cheating and lying at the heart of the story. As I have said in earlier posts, the banking industry used to be one of the more trusted professions, but these liars and cheaters (let’s call them what they are), breached this trust. Some conservative leaders balk at the requirements of Dodd-Frank regulations which introduced accountability and the creation of the Consumer Finance Protection Agency initially run by now Senator Elizabeth Warren. This agency has already fined financial companies over $600 million (as of last summer) and counting for malfeasance and misrepresentation. So, the answer to those who balk is “tough, these foxes brought it on themselves and we have to guard the henhouse.”
Unfortunately, this plays out in spades in political circles. We have legislators who are so beholden to their funders, they are less inclined to tell you what they think, as they must go along with what the funders think. Please refer to my previous post on “The Routine Bigger Conspiracies” for how this misrepresentation can manifest itself on some bigger issues. It goes even further when we look at the job preservation motivation. Legislators worry more about keeping their job than doing their job. This is the very reason nothing has happened on gun control laws. They are failing to do the right thing because of a huge funding source in the NRA.
Recognizing that the GOP congressional leaders seem too zealous on the Benghazi episode, when you set aside the unhealthy motivation of “gotcha politics,” there are legitimate questions that need to be asked and answered. If the President had been less concerned with spin-doctoring from the outset, some of these questions would not exist. The real answer would seem to be “we failed to read the risks correctly and we did not have protection in place and people died.” The same goes for Senator Mitch McConnell who had a report buried in October (as reported by the New York Times) that showed trickle down economics failed to work. As this was key talking point of the GOP Presidential candidate, it seemed to be politically motivated.
I have also noted on several occasions over my disdain over the previous administration’s fabrication of a story of Weapons of Mass Destruction based on faulty data. People would say they did not know, but that is not true as Scooter Libby, who worked for Karl Rove, went to jail for something Rove later said he knew about as well. As you recall, Libby leaked the name of Valerie Plame to the press, who was a CIA operative and whose husband (and former ambassador) reported at the behest of the CIA that there were no nuclear building materials being sent to Iraq by Libya. This report was misused by Bush/ Cheney and when the ambassador complained in the press, Libby leaked Plame’s name to discredit him. In essence, this is one of the smoking guns that showed Bush/ Cheney lied to the American people and many Americans have paid the ultimate price for this deception.
And, it also flows to state and local politics. To give some brief examples, in NC the Speaker of the House knew he did not have enough votes on a bill, so he sent everyone home at midnight only to call everyone back in from a 1 am vote. He knew others would leave, so he alerted his crowd to pass the word to stay and the yea votes now outnumbered the no votes. On a bill to move the potential to frack for natural gas, one of the legislators voted yes incorrectly and rushed forward to say she needed to change her vote. It was not allowed and the bill passed by one vote. Last week, a NC Committee Chair knew he did not have enough votes, so he took a voice vote – all in favor say “aye” all opposed say “no.” He purposefully heard the loudness differently than others, bragged beforehand he would find a way, and said it passed.
We citizens, customers and shareholders need you to do business in the right way. When you cheat, we seem to be the ones who get screwed. As I told one the Committee Chair, I do not care if you disagree with me, but I do care if you cheat. I said I did not know your name last week, but now I do. Please help us hold people accountable. When you hear that someone does not want regulation, I can assure you it the voice is echoing what is told to them by those who are regulated. We need less bureaucracy, but make no mistake, the foxes need regulation. Someone has to hold people accountable, because it is obvious that market and legislative practices will not.