Stephen H Baum Leadership

For at least the past eight years, the public trust has been broken by every type of institution. Economic recovery depends not only on economic fundamentals but a change in leadership and leadership values in Washington and elsewhere. 

Last Valentine’s Day, February 14, my post using Wachovia’s marketing tag line was a warning: “Are You With Wachovia? Then You May Be In Danger.” Wachovia was doing a profitable business with telemarketers known to defraud bank customers. Internal emails appeared to confirm Wachovia’s knowledge of and addiction to the source of the profits. Who was looking out for the customers?

So if you are surprised that Wachovia stiffed Citi when Wells Fargo made a better offer (and it is better in that it avoids draining more taxpayer funds and keeps Wachovia in tact) you are just not paying attention.

And if you thought that Richard Fuld, former chairman of Lehman brothers, would cop to doing anything wrong (for example, in paying bonuses to fleeing executives as their firm sought government cash), you must be in the 15% of the populace that thinks the economy is strong and George Bush has done a great job. Could we defend his assertion? Were the bonuses contractually guaranteed? Were they performance bonuses based on responsible management and actual accomplishments or phony profits? What made them “appropriate” as Fuld called them. He didn’t say. Who was looking out for the customers and investors?

And when the SEC allowed hedge funds bosses private audiences with SEC higher ups to complain about front-line auditors, when the FDA and Consumer Product Safety agencies failed to protect us from adverse impacts including death, when the Congress could not police its own ethics let alone keep the lobbyists for Fannie and Freddie and others in bounds, who was exercising the fiduciary trust of the public?  And I have not yet touched on the war and the Defense Department. 

And in case you have a short memory, it is only a few months since we learned our Federal oil regulators whose salaries we pay partied with sex and drugs funded by the companies they regulate.

Don’t blame it on free  markets, either. Our markets have not really been free – free of undue, self-serving influences and subsidies that inhibit real competition intended to benefit the public. 

There have always been insider dealing, other forms of corruption and a lack of wise oversight. But this is one of those periodic times when it is so egregious that the trust – and the system – breaks down.  

And you now know that it affects everyone. 

So, make sure you vote in presidential elections and congressional elections and do so for whoever is most likely to restore trust by doing the right thing.