NewsTrust - Corporate Governance - Most Recent Stories: Opinion (Mainstream)

A Heroine of ’Capitalism’

Wed, 07 Oct 2009 00:00:00 -0700

Washington Post - By Lois Romano - Oct. 07 (Interview) - Elizabeth Warren is far from a household name, but that could change quickly, given her debut on the big screen this week in Michael Moore’s scathing assessment of the government’s handling of the banking crisis.

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Give BB&T Liberty, but Not a Bailout

Sun, 02 Aug 2009 00:00:00 -0700

New York Times - By Andrew Martin - Aug. 02 (Interview) - If Mr. Allison’s speech sounds vaguely familiar, it’s because it’s based on the philosophy of Ayn Rand, who celebrated the virtues of reason, self-interest and laissez-faire capitalism while maintaining that altruism is a destructive force. In Ms. Rand’s world, nothing is more heroic — and sexy — than a hard-working businessman free to pursue his wealth. And nothing is worse than a pesky bureaucrat trying to restrict business and redistribute wealth. Or, as Mr. Allison explained, “put balls and chains on good people, and bad things happen.”

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The Stumbles That Led to an Ethics Blunder

Sun, 12 Jul 2009 00:00:00 -0700

Washington Post - By Andrew Alexander - Jul. 12 (Opinion) - The Washington Post's ill-fated plan to sell sponsorships of off-the-record "salons" was an ethical lapse of monumental proportions. Publisher Katharine Weymouth and Executive Editor Marcus Brauchli have now taken full responsibility for what was envisioned as a series of 11 intimate dinners to discuss public policy issues. For a fee of up to $25,000, underwriters were guaranteed a seat at the table with lawmakers, administration officials, think tank experts, business leaders and the heads of associations. Promotional materials said Weymouth, Brauchli and at least one Post reporter would serve as "Hosts and Discussion Leaders" for an evening of spirited but civil dialogue. While Brauchli and Weymouth say they should have realized long ago that the plan was flawed, internal e-mails and interviews show questions about ethics were raised with both of them months ago. They also show that blame runs deeper. Beneath Brauchli and Weymouth, three of the most senior newsroom managers received an e-mail with details of the plan.

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Op-Ed Columnist - In Praise of Dullness

Tue, 19 May 2009 00:00:00 -0700

New York Times - By David Brooks - May. 19 (Opinion) - In other words, warm, flexible, team-oriented and empathetic people are less likely to thrive as C.E.O.’s. Organized, dogged, anal-retentive and slightly boring people are more likely to thrive.

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The Big Takeover

Sun, 22 Mar 2009 00:00:00 -0700

Rolling Stone - By Matt Taibbi - Mar. 22 (Opinion) - People are pissed off about this financial crisis, and about this bailout, but they're not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.

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End Corporate Welfare

Sun, 22 Mar 2009 00:00:00 -0700

Weekly Standard - By Matthew Continetti - Mar. 22 (Opinion) - When news broke last week that insurance giant AIG--into which the federal government has poured close to $200 billion since last September--planned to pay out $165 million in bonuses to executives in its financial products group, the backlash was swift. And understandable. These are the blockheads who pioneered the use of credit default swaps that purportedly allowed banks and other investors to hedge against losses in the secondary mortgage market. In so doing, they created new financial instruments and hence a new marketplace that, for a while anyway, flourished wildly. It didn't last. The real estate bubble popped and took the banking sector and AIG down with it. AIG didn't have the money to pay the counterparties to its swaps. The feds stepped in and began pumping cash into the insurer so it could pay its counterparties--the likes of European giants Deutsche Bank and Société Générale and Wall Street's Goldman Sachs and Merrill Lynch. To do otherwise, sayeth the Treasury, would invite a "systemic collapse" of the swap market, and thereby the destruction of the firms who participated in it. Who knows what sort of financial apocalypse would ensue?

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Off With the Bankers

Fri, 20 Mar 2009 00:00:00 -0700

New York Times - By Simon Johnson, James Kwak - Mar. 20 (Opinion) - A.I.G. can hardly claim that its generous bonuses attract the best and the brightest. So instead, it defends the payments by arguing they’re needed to retain employees who are crucial for winding down transactions that are “difficult to understand and manage.” In other words, only the people who stuck the knife into the American International Group can neatly extract it for a decent burial. There is no reason to believe this. Similar arguments made during the 1997 Asian financial crisis, when currencies and stock markets collapsed in much of Southeast Asia, turned out to be a smokescreen to protect the executives who were partly responsible for the mess. Recovery from that crisis required Indonesia, South Korea and Thailand to close or consolidate banks. In all three countries, bankers protested, claiming that their connections with borrowers were critical to recovery.

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Memo from the C.E.O.

Sun, 08 Mar 2009 00:00:00 -0800

New Yorker - By Patricia Marx - Mar. 08 (Comedy News) - It is with deep regret that we inform you of certain cost-cutting measures that will be taken in the coming days so that we can remain competitive. But first some good news. We are happy to report that Bring Your Child to Work Day has been renamed Bring Your Child to Do Work Day. We hope you will contribute unstintingly to the Gummy Bears Overtime Fund. Now for the harsh realities. We will no longer be serving complimentary cold cuts and soda on Cold Cuts and Soda Day. Stairs will go up, but not down. Please do not use the fire extinguisher unless there is no water in the toilets. Anyone wishing to put out a medium-to-large fire must first fill out form X34J (if in stock). Mr. Johnson and Mr. Green, you will be sharing a desk chair, although you may keep separate desks. With regard to our annual retreat, spouses of non-management employees will be considered luggage. The letters “K,” “Q,” and “Z” are costly and should be used sparingly. Anyone who would like to volunteer for the human weather-stripping experiment, contact Nan Newberg. Also, as of next Wednesday, there will be no Wednesdays.

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The Age of Irresponsibility

Sun, 22 Feb 2009 00:00:00 -0800

Weekly Standard - By Matthew Continetti - Feb. 22 (Opinion) - Decades from now, historians are going to fill e-tome after e-tome debating when the crisis in American authority began. A good place to start would be the Clinton era. The president of the United States had a tawdry affair, lied about it, and refused to accept any responsibility for his actions. The Republicans correctly pointed out that the president had acted beneath his office. The problem was that many of them were acting beneath their offices, too. In Washington, where the spirit of public service is supposed to reign, both Democrats and Republicans were using positions of power for private indulgence. Many things sprang from the Clinton impeachment. Confidence in authority was not one of them. We correct for the mistakes of past presidents. George W. Bush (barely) won the White House in part because he promised to restore integrity to the office. And the terrorist attacks of September 11, 2001, did briefly increase the public's trust in government and its elites. In the tense months following the attacks, the public rallied behind strong leaders like Bush, Rudy Giuliani, and Donald Rumsfeld. These men, who had many private failings, nonetheless were seen to be acting in the interests of the nation as a whole. We seemed to be on the verge of a new era of patriotism and civic renewal.

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Stumbling on Their Sense of Entitlement

Wed, 04 Feb 2009 00:00:00 -0800

Washington Post - By Steven Pearlstein - Feb. 04 (Opinion) - For the American public, Daschle became the latest symbol of everything that is wrong with Washington -- the influence-peddling and corner-cutting and sacrifice of the public good to private interest. Now that this system has let them down, and left them poorer and anxious about the future, people are angry about it and no longer willing to accept the corruption of the public process and the whole notion of public service.

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Bunglers get federal bailout

Mon, 02 Feb 2009 00:00:00 -0800

Seattle Post Intelligencer - By Paul Krugman - Feb. 02 (Opinion) - Question: What happens if you lose vast amounts of other people's money? Answer: You get a big gift from the federal government -- but the president says some very harsh things about you before forking over the cash. Am I being unfair? I hope so. But right now that's what seems to be happening.

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Bailout to Nowhere

Sun, 16 Nov 2008 00:00:00 -0800

New York Times - By David Brooks - Nov. 16 (Opinion) - Democrats from Barack Obama to Nancy Pelosi want to grant immortality to General Motors, Chrysler and Ford. They have decided to follow an earlier $25 billion loan with a $50 billion bailout, which would inevitably be followed by more billions later, because if these companies are not permitted to go bankrupt now, they never will be. This is a different sort of endeavor than the $750 billion bailout of Wall Street. That money was used to save the financial system itself. It was used to save the capital markets on which the process of creative destruction depends. Granting immortality to Detroit’s Big Three does not enhance creative destruction. It retards it. It crosses a line, a bright line. It is not about saving a system; there will still be cars made and sold in America. It is about saving politically powerful corporations. A Detroit bailout would set a precedent for every single politically connected corporation in America. There already is a long line of lobbyists bidding for federal money. If Detroit gets money, then everyone would have a case. After all, are the employees of Circuit City or the newspaper industry inferior to the employees of Chrysler? But this, apparently, is about to change. Democrats from Barack Obama to Nancy Pelosi want to grant immortality to General Motors, Chrysler and Ford. They have decided to follow an earlier $25 billion loan with a $50 billion bailout, which would inevitably be followed by more billions later, because if these companies are not permitted to go bankrupt now, they never will be. This is a different sort of endeavor than the $750 billion bailout of Wall Street. That money was used to save the financial system itself. It was used to save the capital markets on which the process of creative destruction depends.

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On Wall St. as on Main St., a Problem of Denial

Tue, 16 Sep 2008 00:00:00 -0700

New York Times - By Joe Nocera - Sep. 16 (Editorial) - Because after you get past the mind-numbing complexity of the derivatives that are at the heart of the current crisis, what's going on is something we are all familiar with: denial. Indeed, it is not all that different from what is going on in neighborhoods all over the country. Just as homeowners took out big loans and stretched themselves on the assumption that their chief asset -- their home -- could only go up, so did Wall Street firms borrow tens of billions of dollars to make subprime mortgage bets on the assumption that they were a sure thing.

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Laughing Gas: How To Game the Carbon Markets

Wed, 23 Jul 2008 00:00:00 -0700

Wall Street Journal - By Keith Johnson - Jul. 23 (Opinion) - So this is the Kyoto Protocol in action: A marginally-economical chemical factory in an industrial superpower finally installs 1970s-era technology to clean up its act, and as a result makes 30 times more money by selling "carbon credits" to fight global warming than it makes by selling chemicals.

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Guarantees for America's guarantors

Mon, 14 Jul 2008 00:00:00 -0700

Financial Times - By Clive Crook - Jul. 14 (Editorial) - Here is a greater irony: Fannie and Freddie were the inventors of the mortgage-backed security, a principal cause of the housing bubble and its subsequent deflation. They won plaudits for it: for years, the unbundling and reselling of mortgages was deemed a good thing, the secret of the US housing market's success. Alan Greenspan, former Federal Reserve chairman, praised it ceaselessly as a breakthrough that did much to widen home ownership. But it weakened mortgage originators' oversight of loan quality - without securitisation and the backing of Fannie and Freddie, could there ever have been "ninja" mortgages (no income, no job or assets)? When securitised loans go bad, they are much harder to restructure. Fannie and Freddie have been scrambling to contain the damage their innovation helped set in train - and now seem likely to fall victim themselves.

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Why would anyone trust WaMu's disgraced CEO on education issues?

Fri, 18 Apr 2008 00:00:00 -0700

Seattle Post Intelligencer - By David Marshak - Apr. 18 (Opinion) - It's only fair for Killinger that we hold him to the same standard that he set for kids. Killinger said, "The 'real world' is unforgiving." Fair enough. Then we should not forgive Killinger for his colossal failures at WaMu. We certainly should no longer pay any more attention to what he says about education. And we should certainly reconsider the standards-and-testing industrial school model that Killinger worked so hard to install in Washington public schools.

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Socialized Compensation

Fri, 21 Mar 2008 00:00:00 -0700

New York Times - Mar. 21 (Editorial) - Until bankers face a real risk of losing their shirts, they will keep ratcheting up risks to collect rewards while letting the rest of us carry the bag when their punts go bad.

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Bernanke's bailout for Wall Street puts taxpayers at risk

Wed, 19 Mar 2008 00:00:00 -0700

San Jose Mercury News - By Vindu Goel - Mar. 19 (Opinion) - Bailout Ben means well. He argues that saving banks is critical to the health of the broader economy, and he is using every tool at his command to prevent the credit markets from collapsing. But so far, the Fed's actions have provided only short-lived boosts to Wall Street. Ordinary folks haven't gotten much help at all, and may end up getting hurt. In addition to the risk that taxpayers could get stuck picking up the tab for Wall Street's bad loans, consumers are facing higher prices for everyday products and lower rates on their savings.

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It's a Mad, Mad, Mad, Mad World

Mon, 17 Mar 2008 00:00:00 -0700

Portfolio - By Jesse Eisinger - Mar. 17 (Opinion) - We have reached escape velocity and launched into the No-Consequences Economy. To pause for a moment of overgeneralization: America used to be about exceptionalism and optimism, a place where anybody could try anything and make it work. Across the business and political spectrum, it's now about entitlement, where everyone deserves a shot but no one gets blamed for screwing it up. Stuff happens, as Donald Rumsfeld said, referring to another affair with no consequences for the architects.

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NPR CEO Ken Stern Forced Out

Fri, 07 Mar 2008 00:00:00 -0800

National Public Radio - By David Folkenflik, Frank Langfitt - Mar. 07 (Statement) - NPR is considered a leader in news and music podcasts. And under Stern it has also struck deals to deliver its content new ways, such as through cell phones. But that push has aggravated anxiety among local stations about their relationship to the network. NPR member stations rely heavily on popular shows, particularly Morning Edition, to generate donations. But if people can listen to them through NPR's Web site or even their own cell phones, why would they stay loyal to stations still reliant on pledge drives?

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Should eBay's Meg Whitman resign?

Thu, 03 Jan 2008 00:00:00 -0800

MSNBC - By Kim Peterson - Jan. 03 (Opinion) - There's been some talk lately about whether eBay CEO Meg Whitman should resign. EBay would be invigorated if she did. Recently, she's been criticized for signing on as the financial co-chair of Mitt Romney's presidential campaign. Whitman met Romney years ago when she consulted for his private equity firm. At BloggingStocks, Gary Sattler thinks that Whitman might request a paid leave of absence from eBay to work on the Romney campaign. I really doubt that. It's ludicrous to think that a CEO of a major public company would do such a thing. If Whitman indeed asks for time off to campaign, eBay shareholders have every right to be angry.

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Economic Hit Man

Tue, 27 Nov 2007 15:16:00 -0800

Aljazeera - By Riz Khan - Nov. 27 (Interview) - Many countries have witnessed the assassination of their leaders for political reasons, but one former American banker says he was an "economic hit man," making sure that the leaders of poor countries remained beholden to the United States.

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Banks Gone Wild

Fri, 23 Nov 2007 10:04:11 -0800

New York Times - By Paul Krugman - Nov. 23 (Opinion) - The subprime crisis and the credit crunch are, in an important sense, the result of our failure to effectively reform corporate governance after the last set of scandals. John Edwards recently came out with a corporate reform plan, but it didn't receive a lot of attention. Corporate governance still isn't regarded as a major political issue. But it should be.

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Performance-pay Perplexes

Thu, 08 Nov 2007 22:20:34 -0800

New Yorker - By James Surowiecki - Nov. 08 (Comment) - The havoc on Wall Street following the collapse of the subprime-mortgage market boils down to a simple truth: for years, lots of very smart people took lots of very foolish risks, betting borrowed billions on dubious mortgage derivatives, and eventually the odds caught up with them. But behind that simple truth is a more surprising one: the financial whizzes made bad decisions in part because that's what they were paid to do.

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Escape From Wall Street

Mon, 04 Dec 2006 09:20:05 -0800

Wall Street Journal - By John Fund - Dec. 04 (Opinion) - If you want to look for reasons why New York's status as the world's financial center is in serious jeopardy, you need only come here to gaze at this booming city and tour its markets. Increasingly, Hong Kong and London are the places where companies are finding it easier and cheaper to list their shares and raise capital. Last year, of the 25 largest initial public offerings in the world, only one took place in America. This year, Hong Kong is likely to end up as the No. 1 market for stock offerings world-wide.

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