When "I'm Sorry" Really Means Ignorance
By Dian Vujovich
In an attempt to try and figure out how Wall Street’s huge banks and insurance companies messed up the financial world, CEO’s grilled by Congress recently have all echoed the same I-didn’t-see-the-crisis-coming excuse followed by those two “I’m sorry” words.
I’d be ashamed of myself if that’s the best I could come up after seeing how horribly my ignorance impacted the financial world, the lives of millions of investors, non-investors and the tens of thousands of people who’ve lost their homes. I’d also be hugely embarrassed by my lack of knowledge about what was really going on in the kingdom under my control. Even if that kingdom was making me billions— but more on that later.
“I’m sorry” works when you’re apologizing to someone personally for a minor infraction like say, late for a meeting or lunch. But it sure doesn’t cut it on Wall Street when those in the know at billion-dollar firms are expected to know about where and how they’ve invested people’s money, get paid huge bucks to know the details of such, but don’t know.
All this not knowing reminded me of the book “The Peter Principle” by Laurence J. Peter written in late 1960s. The book’s premise is that employees tend to rise to the level of their incompetence then stay there. Look around today and that concept seems to fit whether an employee has a non-management position or a top-ranking one.
But Wall Street’s and corporate America’s love of money, as in big wads of it, and all the power, prestige, and cache it brings doesn’t leave much room for principles—Peter’s or anybodies. That’s because when the goal is making money, then more money and more money, and there are no rules or regulations in place to insure some kind of oversight on what can and cannot be considered sound investing practices or valid investments, there is no place for principles. Or morals. Or virtues. Or right. Or wrong. There is only room for reward. Financial reward, be ill gotten or not, is all that counts. And that’s a tragedy the trickles down and impacts each of us.
Last year, Goldman Sachs reported a profit of $13.4 billion. This investment banking firm could not have done that had they not received government bailout monies, which were plowed back into their firm, or sold skanky unregulated investment products. On Friday, April 16, the SEC filed fraud charges against them for basically not informing investors of all of the enormous risks of the products they created then sold. Of course, Goldman Sachs’ response to the claim is that it is “completely unfounded in law and fact”.
I’m not expecting to hear an “I’m sorry” from anyone at Goldman, or from the 31-year old Goldman Sachs vice president, Fabrice Tourre, who allegedly created the product at the core of this case.
What I do expect to hear is more I-didn’t-know from corporate big wigs and that they did nothing wrong. And that’s where the real fouls sit.
Financial companies are lobbying big time today spending an estimated $1 million dollars a day in an effort to block any kind of proposed securities reform legislation. Reform that would include regulation of the unregulated collateralized debt obligations (CDOs) —the products behind the reason for the bailouts two years ago and the resulting market collapses felt and heard ’round the world still today.
Instead of excuses, denial and saying no to reform, it’s time that our banking and investment executives realized that the enormous amount of power they wield along with the do-whatever-you-must-to-bring-in-profits mentality is ruining our country.
If they don’t understand that, I’m not sorry but amazed at their ignorance and think they need to be replaced. Today.
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