We’ve Gotta Talk
Mark Patinkin makes a reasonable point — one that is often leveled in an accusatory tone at conservatives:
Stanley O’Neal, the ex-head of Merrill Lynch, was booted for losing billions betting on the garbage now known as sub-prime loans. His punishment? An estimated $161-million sendoff package. The issue isn’t even that he didn’t deserve it, it’s that Wall Street rewards CEOs who mess up not just their own house, but the economy, which is why they don’t care if they do it.
Shouldn’t we demand accountability at that level of wealth and power? We on the right are properly hesitant to interfere with the operation of business, but the same argument whereby I would justify, in economic terms, government support for roadways and other infrastructure could be relevant to situations in which an upper-crust business elite rewards its own even when they play a role in disastrous business ventures that gash the global economy. If the consequence for risks gone bad is a mere $161 million severance package, then there’s hardly incentive to fully vet strategies that look attractive in the short term. And as executives and board members become involved in such arrangements, the likelihood of a correction decreases.
I can hear the ghost of Milton Friedman arguing that the problem is self-correcting. The plight of Merrill Lynch will generate adjusted behavior, and future CEOs will think twice before dashing after the next subprime mortgage–type opportunity. I usually find that argument persuasive.
Maybe, amid my populist impulses, I just need reaffirmation of my faith, but I wonder. The solutions of those on the left are no solutions at all; indeed, they are apt to make the problem worse, but what would be the solutions of those on the right? If we were to decide that a problem exists, that is.