A Corpse Wrapped in a TARP

“The bank-bailout part of TARP was an astounding success,” according to Mark Zandi, Moody’s Analytics chief economist.

And if you’re Moody’s or an employee thereof, you’re probably partying about the two year euthanizing of the Bush, Paulson, and Congressional stroke of genius that left taxpayers $100 billion in the hole, left the economy foundering, and has placed the Obama Presidency in reputational shambles. Because if people would have been held accountable for their actions, Moody’s (like Arthur Andersen before it) would have been shuttered, its executives fined or jailed, and we would have had a modicum of a chance to actually restore some faith in our economy. Few organizations, incentivized with bloated fees, were more directly in the line of culpability for the economic disaster than Moody’s, S&P and other rating agencies. And remember, the same government that authorizes their monopoly to prop up its own shareholder interests and bogus pension accounts, has given them exoneration for falsely promoting investment quality when none existed. A bigger bullet couldn’t have been dodged. So, good on ya’ Mark, as my Aussie friends would say. The fact that there’s still an economist at Moody’s is an “astounding” fact indeed.

While I know that I’ve been reminding us of the classics lately, this week cannot pass without reference to Plato’s Republic, Book I:

“Observe also what happens when they take an office; there is the just man neglecting his affairs and perhaps suffering other losses, and getting nothing out of the public, because he is just; moreover he is hated by his friends and acquaintance for refusing to serve them in unlawful ways. But all this is reversed in the case of the unjust man. I am speaking, as before, of injustice on a large scale in which the advantage of the unjust is more apparent; and my meaning will be most clearly seen if we turn to that highest form of injustice in which the criminal is the happiest of men, and the sufferers or those who refuse to do injustice are the most miserable--that is to say tyranny, which by fraud and force takes away the property of others, not little by little but wholesale; comprehending in one, things sacred as well as profane, private and public; for which acts of wrong, if he were detected perpetrating any one of them singly, he would be punished and incur great disgrace-- they who do such wrong in particular cases are called robbers of temples, and man-stealers and burglars and swindlers and thieves. But when a man besides taking away the money of the citizens has made slaves of them, then, instead of these names of reproach, he is termed happy and blessed, not only by the citizens but by all who hear of his having achieved the consummation of injustice. For mankind censure injustice, fearing that they may be the victims of it and not because they shrink from committing it. And thus, as I have shown, Socrates, injustice, when on a sufficient scale, has more strength and freedom and mastery than justice; and, as I said at first, justice is the interest of the stronger, whereas injustice is a man's own profit and interest.”

As I have spent the week with many friends in Ulaanbaatar Mongolia, I find myself an discontented consumer of this week’s report card on TARP. I was fortunate to be reading the companion document, the GOP’s Pledge to America and couldn’t help thinking that, if the GOP’s Pledge is connecting with anyone, he or she must be suffering from memory loss. Either that or he or she is incapable of being informed by Plato's Republic and its stern admonition against celebrating tyranny and injustice. It was the Reagan Administration that poisoned our innovation policy in the U.S. by turning the Patent Office of the U.S. into a forgery shop in an attempt to quell Japanese industrial threats thereby creating the illusion that we had an innovation-based economy. It was the Clinton and Bush administrations which created tax environments which made out-sourcing the path towards short-term profits. And it was the Bush Administration and a Republican Congress which failed to act on speculative credit practices while simultaneously reinforcing the incumbency of rogue rating agencies. It was conservative Congressional “home ownership” dogma that let Freddie and Fannie get intoxicated (the very entities now recommended for detox by their newly-converted, former dealers). While railing against government size, the GOP seems to be overlooking the fact that if they “right-sized” Washington, they would likely double unemployment. Now, don’t get me wrong, I’m all for downsizing wasteful government but to say that these bureaucrats will find jobs in the private sector is delusional. Yes, there’s plenty of culpability on both sides of the aisle but, really? The Pledge is against the policies of just 3 years ago when its authors held sway.

Not surprisingly, I find myself haunted by Plato’s Republic.

This week injustice and tyranny did their level best. A country who once was the recipient of foreign aid in their time of need neglected their opportunity to reciprocate kindness to another country in need and robbed it of much needed international support. New information surfaced on a 1940’s Public Health program in which U.S. officials sanctioned the infection of women in Guatemala to study sexually transmitted diseases. The head of government from a mineral rich country was hosted by another in which a stock exchange has funded exploitation of people and their land. And the world continued its mad rush to buy gold before China makes its move in October integrating metal, and possibly energy, assets into its currency strategy.

However, this week the argument in Plato’s Republic was challenged by the bold moves of some great women and men. I was witness to a phenomenal woman who is fueling the fire that once led her to campaign for independence in Mongolia now continuing that campaign for the economic and social betterment of the now politically liberated country and its people. As I write this blog post, Brazil stands on the verge of the likely election of Dilma Rousseff – a woman who is no stranger to tyranny. She will have the singular opportunity to show the world what power can do if it’s tempered with the wisdom drawn from a tumultuous life. In many ways, her Presidency, if elected, may provide humanity a unique moment to contemplate the power of reconciliation and service beyond self. Whether she rises to this challenge awaits an election and then, true leadership. I worked with a dynamic woman who has risen to positions of great respect in financial and civil society in Papua New Guinea as we continue to foster transparency and accountability in gold mines littering the landscape and blighting the service of many. And I stood with a colleague in London as we press on towards the launch of a new day for energy paradigms that are suitable both for the planet and for people.

What we should gladly bury with TARP on this day of its demise is the acquiescence to squandered trust. The epitaph may be best written by Zandi. “Astounding”. And today we can all realize that, when the merits of corruption can only find the complicit co-conspirators to sing their praises, we’re actually at a good inflection point. Honorable women and men have been wise enough to call the robbery of the public exactly that - robbery. Possibility is upon us. A new narrative can be born. Take responsibility as a cloak of honor, not a burden. Embrace accountability as your character, not as duty. Liberate your mind and actions, and help those around you to do the same, and stand with the great women and men who are already changing our collective story.

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