Is this a great food fight, or what? Now all the cynics–or maybe it’s just all the realists–in Washington claim the government is running around issuing warnings about terrorist attacks in order to take everybody’s mind off the really bad news. The really bad news seems to be that our government is seriously incompetent at dealing with terrorist threats.
Actually, we already knew that, and have since Sept. 11. Remember the wonderful day the Immigration and Naturalization Service approved student visas for two of the dead hijackers, six months after the guys had noticeably incinerated themselves?
While you’re trying to figure out which one to worry about more–an imminent terrorist attack or the fact that, even if the government knew about the attack, the CIA wouldn’t have enough sense to tell the FBI, which would naturally not share the information with the FAA, which in turn would fail to notify the airlines, that would then be found hiring a bunch of narcoleptics and felons to confiscate our toenail clippers while the terrorists went after a nuclear plant–here’s a little something light to take your mind off this anxiety bonanza.
If we don’t all die, we’ll probably go broke. Actually, I exaggerate. But the continuing follies in the financial industry remind us that screwing up is not something limited to the government. Neither, for that matter, is criminal irresponsibility. Merrill Lynch has just agreed to pay $100 million, which–I am pleased to find–is widely reported to be “a slap on the wrist,” to avoid the possibility of criminal charges threatened by New York Attorney General Eliot Spitzer. Spitzer’s investigation, you may recall, unearthed those endearingly honest e-mails by Merrill Lynch research analysts describing the stocks they were recommending to customers as “dogs,” “junk,” “crap” and having no merit “except the banking fees” to be had from selling them.
Both Spitzer and Merrill Lynch have claimed victory in the settlement, but if you want to know who came out ahead, parse this “apology” issued by Merrill Lynch as part of the settlement (this is really good): Merrill Lynch “regrets that there were instances in which certain of our Internet sector research analysts expressed views which at certain points may have appeared inconsistent with Merrill Lynch’s published recommendations.”
In other words, they’re apologizing for the honest opinions expressed by the brokers, not the dishonest recommendations. As a statement of contrition, it’s a real G-string. But I’m sure everyone who lost money in the high-tech bubble appreciates it–fully.
Barbara Roper, director of investor protection at the Consumer Federation of America, says Spitzer came up way short of his avowed intention to “force fundamental change” on stock analysts. “The firms will probably do covertly what they have been doing overtly because the incentive to use research for profiting in their investment banking is too great,” said Roper. But she does think the settlement applies pressure on the Securities and Exchange Commission to put some pep into its enforcement efforts. She attributes part of the problem to the “glamor cults” and “rock star status” of analysts such as Henry Blodgett, formerly of Merrill Lynch, who are on television as much as any rock star–just different channels.
One of the strange distortions of television journalism in recent years is the proliferation of programs about business, particularly how-to-make-money-in-the-stock-market shows. The other two legs in our economic tripod are labor and consumers, neither of which has ever had a single program in which to hold forth, much less entire cable channels devoted to their concerns. Wouldn’t you think CNBC could spare just a half-hour a week?
Perhaps you have noticed that many of our “public affairs programs,” not to mention the news, are sponsored by these very financial firms, who entreat us to trust them with our dreams and our savings. Happy retirees living on boundless ranches or paddling canoes on gorgeous lakes invite us to share in their infinite faith in some firm that should be named WASP, Greed, Conflict, and Cynicism. Do you think there’s any connection between those sponsors, and the shortage of labor and consumer reporting on television?
I’m especially fond of the new Republican hue and cry about how investigations are destroying “faith in financial markets.” Boy, is that ever blaming the cops for the crime wave. Rep. Michael Oxley, R-Ohio, is especially entertaining on this subject: In an unctuous speech to the World Eco-nomic Forum at the U.S. Chamber of Commerce, he accused Spitzer of “grandstanding by ambitious and publicity-hungry political officials.” Oxley is, of course, a stranger to political ambition and publicity-seeking. n
Molly Ivins is a nationally syndicated columnist. Her book with Louis Dubose, Shrub: The Short But Happy Political Life of George W. Bush, is out in paperback.