Just how ‘responsible’ is Wall Street for destroying the world’s economy? Like last night’s rhetorical question about the phantom recovery, it depends on who you ask.
As one might expect, Wall Street holds itself harmless as far as the financial meltdown is concerned. They didn’t make anybody participate in the games that they controlled the rules of and had sole access to, if you/the investing public was too stupid to steer clear of dubious financial instruments and reckless insurance schemes, what are they obliged to do about it?
Which is pretty cavalier, considering they are the only game in town…but that begs a different question, doesn’t it good citizen? Should we allow anyone to ‘gamble’ with the future of civilization…considering what’s at stake?
Does the prosperity of the individual ‘outweigh’ the safety of society? If we look at the financial markets, it would sure seem that way.
Understand, good citizen, some would object to my ‘lumping together’ private fortunes with the common good…but where do those private fortunes originate? From our ‘common inheritance’, a fact those entrusted with preserving that legacy often forget.
Thus do we come face to face with Wall Street’s Spin Game
Wall Street’s Spin Game
By GRAHAM BOWLEY
Published: November 21, 2009
Lloyd C. Blankfein, chief executive of Goldman Sachs, the bank to bash on a resurgent Wall Street, is receiving a lot of advice lately, and it’s not just about money.
Sitting before an audience of 300 at the Metropolitan Club of New York on Tuesday, he spoke with barely disguised disdain in his voice about the work of the image consultants, reputation experts and public relations advisors who are beating a path to his door, and to the doors of other Wall Street banks vilified for their profits and million-dollar bonuses at a time of continuing economic pain. [What needs saying right here at the outset good citizen is don’t think for a minute that this piece isn’t the product of the same ‘spin doctors’ who are laboring desperately to prevent a potential bloodbath.]
“Some people come in and say, ‘You are doing too much. Don’t say another word.’ Other people say we should get on the talk shows,” said Mr. Blankfein (as he was awarded the distinction of C.E.O. of the Year by a magazine for corporate directors.) [Left to your imagination is whether or not Mr. Blankfein’s ‘award’ makes him a saint in the eyes of the business community? Maybe its just me but CEO of the year being bestowed on Wall Street’s highest paid chief executive is not exactly the thing ‘saints’ are made of…despite the fact that this is the same man who just recently claimed to be doing ‘God’s work’…]
A few years ago, Wall Street would have cared less for such artifice — it was enough that the Masters of the Universe were wildly successful; their success spoke for itself. But politics and the bottom line have energized the relationship between these New York institutions of money and spin, as banks see the need to calm the rage directed toward them and confront a public relations problem that has seemed in recent weeks to be spiraling out of control. [What did they expect, announcing record profits and projecting enormous bonuses after the taxpayers have been exposed to trillions in losses…WTF?]
Just last week, Goldman announced that it would spend $500 million to help thousands of small businesses recover from the recession. At the same time, Mr. Blankfein acknowledged that Goldman had made mistakes. “We participated in things that were clearly wrong and have reason to regret,” he said. ”We apologize.” [Um, let’s assume for a moment that this 500 million dollars isn’t going to be ‘an investment’ (which they would have made anyway) or a loan. Are we honestly expected to believe they are going to ‘give’ this money away, out of the kindness of their heart and their deep and abiding concern for the welfare of society? Understand this is less than 5% of this year’s ‘bonus pool’, which makes the whole charade a ‘token gesture’, considering how much money the taxpayer is on the hook for because of Goldman and their peers reckless actions. As I mentioned before, that figure is in trillions, not millions.]
But is that enough? And, if it isn’t, what will be? Examples of the public’s anger at Wall Street are legion. Last month, a couple of thousand protesters marched on the American Bankers Association’s annual conference in Chicago brandishing cut-outs of bank C.E.O.s. [Aw gee, those nasty ‘paycheck paupers’ were mocking the Masters of the Universe! How dare they! Naturally, that’s not what this is about. What these spin doctors are trying to avoid is the spontaneous outbreak of ‘neck-tie parties’, the kind involving a slip-knot with 13 loops.]
As the Chicago demonstration made clear, the image problems aren’t confined to Goldman and could have a cost. Wall Street banks are under regulatory pressure, and come election time, if unemployment is still above 10 percent and Wall Street is still paying itself big bonuses, lawmakers’who have done nothing so farwrath might force broader pay curbs, tougher restrictions on what banks can do, or even a break up of the biggest banks.
They are already losing business because of their toxic reputations. One recent Goldman deal, for instance, to buy cheap assets from Fannie Mae, the hobbled mortgage lender, was blocked by the Treasury because it couldn’t be seen to be helping Wall Street benefit once again from the crisis. Critics say the negative media chatter is dragging on their share price. [Um, Goldman shares are doing just fine, thank you…but if you think Goldman is losing money ‘unfairly’ due to poor press, then maybe you’ll feel some sympathy…]
Now, the main securities industry trade organization has hired Brunswick, a powerhouse public relations firm, to burnish the banks’ image, and banks are urging their staffs to cut down on conspicuous consumption and are canceling Christmas parties in an attempt to turn the reputational tide. [Sadly, if the company is unwilling to foot the tab for a holiday bash, ‘The Masters of the Universe’ will ‘step up to the plate’ and use their bonus checks to throw their own party! And if the ‘riff-raff’ don’t like it, tough!]
It is a tough brief, even for Manhattan’s skilled public relations industry. Last week, New York State’s comptroller reported that Wall Street profits this year are on track to exceed the record set at the height of the credit bubble. So what to do? Here are some suggestions about making the unloved Masters of the Universe loveable again.
Be humble: Apologize and say thank you.
The quickest way for the banks to redeem themselves could be to admit they played a role in the crisis and that their survival depended on taxpayer money. [Sadly, this doesn’t ‘jive’ well with million dollar bonus checks while the rest of the economy is suffering a major meltdown! There is no way to reconcile the two. What these criminal organizations are calling ‘profits’ are actually accounting gimmicks, the profits these bonuses are based upon don’t exist!]
Several public relations executives pointed to John J. Mack, Morgan Stanley’s chief executive, as an example of a banker wisely getting in front of the problem early. It was Mr. Mack who offered a full-throated mea culpa at a Congressional hearing last February for his bank’s role in fueling the crisis. “We are sorry for it,” he told lawmakers. [Um, perhaps it’s easier to admit guilt when your next move is to step down, as John Mack did. I don’t think the rest of these twinkies are ready pull their hats out of the till just yet.]
One public relations executive, who does not work for Mr. Mack and who asked not to be identified for fear it could hurt his relationships with other bankers, said: “They have done the best job of anybody of navigating the crisis.” Not every bank has been willing to apologize even though “maintaining otherwise manifestly contradicts the reality that most people see,” according to Stephen Davis, executive director at the Millstein Center for Corporate Governance and Performance at Yale University. [Um, what else would you expect a paid schill to say, especially an ‘unidentified’ one?]
Goldman’s apology, for instance, was a grudging start but it may not be enough. “They should be taking advertisements, they should hold seminars, news conferences,” said Howard J. Rubenstein, president of Rubenstein Associates, who argues for a more effusive mea culpa. “This is a time for gratitude and attitude. One letter to the editor, one news conference, one speech does not make an image.” [It’s a perfectly ‘reasonable’ suggestion, too bad the public is sick of seeing corporate America literally getting away with murder and not getting so much as a reprimand or an easily affordable fine…like the 500 million dollar ‘giveaway’ to small business.]
Give Back Some Money.
Donating money to a worthwhile cause is another way of soothing public outrage. [If you happen to be the recipient of that money, otherwise it is seen as a ‘dodge’. Often it is usually revealed that the recipient just happened to be a pet cause close to the decision maker AND the fucks take a huge ‘charitable deduction’ off their taxes…so you have another ‘empty gesture’.]
But there is the risk that such a strategy will be seen as a transparent ploy to buy off public opinion. Goldman’s donation was only about 3 percent of the $16.7 billion the bank has so far set aside this year for its bonus pool. The bankers may have to give up more yet — and not only by writing a check. [Especially checks for a tiny fraction of the damage they caused.]
“They need to give back and make a real impact — public education, health care, after school programs,” Mr. Rubenstein said. “These guys have brilliant staff. They should make it mandatory for their people to do voluntary work big time.”
Show you create real products that benefit people. [Ha! That’s one class ‘A’ tall order since most financial products turned out to be toxic!]
The crisis revealed what some people had long suspected: that quite a lot of the whiz-bang financial engineering that Wall Street relied on for profits was worthless.
According to Richard Edelman, a leading New York public relations executive, one of the best things Wall Street could do now is clearly “explain how you make your money and why your business model makes sense for a stakeholder society.” [I think we’d all like to hear that one, we could use a good laugh!]
If they can demonstrate in vivid terms the real role they play in the economy — by helping companies borrow money to grow and create jobs, for example — they might also justify their profits and pay. [How many of you spotted the flaw in that proposal right off the bat? That’s right, the chiseling fuckers AREN’T helping domestic businesses to borrow money and create jobs, they’re the ones driving business off-shore!
Unless I’m the one who missed the point here and these PR men are actually trying to get the Wall Street bankers killed!]
Says Travis Larson of Financial Dynamics in Washington: “It is clear how sports stars are judged, and everyone knows how Bill Gates makes his money because you can see the software. Investment banks need a new metric for success.” [Because making pension funds ‘disappear’ only helps the banks, not the investors.]
Cut Pay.
Even then, the most likely way to win back sympathy may be to do what the Masters of the Universe would probably hate the most, which is pay themselves less.
At the moment, that doesn’t appear likely. Six of the top American bank holding companies set aside $112 billion for salaries and bonuses in the first nine months, according to New York’s comptroller. If profits continue, bonuses could exceed the $162 billion paid in 2007 — the year before the financial crisis hit stock markets. The banks are Bank of America, Citigroup, Goldman, JPMorgan Chase, Morgan Stanley and Wells Fargo. [Not only are there fewer players but there is much less activity, so where the hell is this money coming from if it isn’t coming from their own toxic financial instruments?]
Still, some banks are making changes to the way they pay their employees. Credit Suisse, the big Swiss bank, intends to tie bonuses to a specific financial measure and effectively claw back payouts if the bank’s fortunes dim. But the move will not necessarily reduce compensation there.
Forget about it — it will go away.
In the end, though, should banks really care? Maybe the current storm will indeed blow over. [Ironically, our entire economic system is doomed, it is only a matter of time until money collapses and the value of everything falls into doubt, creating widespread chaos.]
Even so, bad reputations can potentially have real costs. The beating in the court of public opinion demoralizes staff, distracts senior executives and can hurt a bank’s ability to hire. [There is indeed an interesting dynamic at work here. If the banking profession becomes synonymous with ‘sleeze-balls’ then nobody will trust them and the entire industry will collapse...and it may already be too late.]
Franz Paasche, a reputations specialist at Communications Consulting Worldwide in New York, argues that a bad reputation can also harm a company’s ability to fight for what it wants in Washington. [That’s a somewhat ‘spurious’ claim as the bankers ‘own’ Washington. If they want that relationship to retain value then they are going to have to clean up their act because Washington has only a modestly smaller bull’s-eye painted on it. It’s a toss-up right now as to which will burn first, Wall Street or DC, but they will go in succession, first one and then the other.]
“Reputation has value and strong reputations create permissions to grow and prosper,” he said. As Wall Street banks’ reputations sink, “they are losing the more active seat at the table in discussions about policy.” [Although you’d be hard pressed to prove that statement, given how the new administration has failed miserably at reining in the banking industry…]
If the government did take wider measures against the banks, it would leave a very different Wall Street. There would be less swagger to those Masters of the Universe. But perhaps only then would the rest of us finally be able to love them.
Did I mention that this was a ‘PR’ piece? There isn’t anything ‘credible’ in it that would be useful in swaying public opinion, especially that portion of he public being hounded by agents of the unbelievably unforgiving banking sector.
For that alone the banking sector is facing ‘an eye for an eye’ type retribution. People don’t readily forgive having their entire lives uprooted due to circumstances beyond their control.
We’ve heard one side of the ‘blame game’ but it takes two to tango and the banking sector is the one that makes the rules!
I don’t think the public is going to be able to ‘forgive and forget’ here because this thing is far from over.
Thanks for letting me inside your head,
Gegner
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