By Ron Schmidt
Growing up in the early ‘60s in a coal mining town, we boys were frequently getting into trouble. There was always some kid looking for attention who would throw something behind Mrs. Grace’s back in 7th grade English. Of course all the boys were accused of it, as opposed to the girls, but we boys took that oath to “never rat on the perpetrator.”
Most of the time the kid acting out was Billy Green and before long the principal would march into the classroom and without spending much time on drilling all of us, would narrow his gaze to who looked the guiltiest and then lead Billy into the hall. And Billy would do the admirable thing for the rest of us boys; he’d confess that he was the culprit saying that this time no one else was involved. To which the coach (the principal was also our basketball coach) would take out his favorite paddle and Billy would walk back into the classroom with tears streaming down his face. The moral of the story is that the rest of us boys didn’t suffer for Billy’s attention-grabbing urge. In other words, Billy manned-up.
Banks as “Boys”
Let’s put this story into the context of the last financial crisis where at least some of the ‘boys’ (financial institutions) were guilty as hell for knowingly selling tainted securities to folks on Main Street. Others were guilty of manipulating LIBOR rates overseas, and still others guilty of taking their money with a “screw the rest” approach. And in Credit Union Land we had the CEO of WesCorp claiming everything was hunky-dorky, while the rest of you bailed out the insurance fund to the tune of $5 billion for its losses.
So are “these boys” going to jail? Nope! The guys going to jail or losing personally are guys like Bernie Madoff for fleecing millionaires, Lance Armstrong for denying he was a blood doper, and NBC anchor Brian Williams who lied that he came under enemy fire. But the corporate boys who did most of the damage hide behind the laws and lobbyists and the elusive “corporate veil.”
In John LeFevre’s new book Straight to Hell: True Tales of Deviance, Debauchery and Billion-Dollar Deals, the former Citigroup bond-syndicate banker recounts stories of corporate boys getting away with murder without consequences. And plaintiffs’ lawyers in the GM ignition switch cases bemoan the legal loopholes and lobbyists that protect corporate officers from criminal charges. And in the legendary London Whale case, prosecutors have given up on holding Chase executives liable for the $6-billion trading loses.
Accountability as a Cornerstone
But what if these corporate types actually fessed-up? What if they said “I acted like a jerk, I know I did everyone wrong, I confess and I apologize?” If they had manned-up sooner we may not have the reams of mortgage regulations, Dodd-Frank may have been more of an afterthought, the recession would have ended sooner and the rest of you wouldn’t have to pay for the sins of a few.
We know we’ll never change the behavior of these types, but what’s missing in society today is an edict to man-up so that everyone else doesn’t have to take the rap for the guilty. We need that accountability in society today that we once had, that peer pressure that guys like Billy Green respected. Unfortunately today we have guys like Richard Fuld, the arrogant former CEO of the defunct Lehman Brothers who, when asked by the press of his assessment of his past record in front of a peer group, he matter-of-factly emoted “Bite me!”
Can we Channel the Greatest Generation?
What can we do to begin to refocus society? Can you hold yourself accountable? Can you hold yourself up as an example like Billy Green did? What it’s going to take is a revisit to the values of the Greatest Generation who dealt with the struggles of the Great Depression, and upon returning to our shores after WWII just wouldn’t put up with the stupid games and egos and attitudes of corporate types today.
Can we as a society develop the peer pressure to do the right thing? Can we as a society say never again?
Ron Schmidt is with CBS Certified Public Accountants, LLC, Solon, Ohio. He can be reached at rschmidt@cbscpasllc.com.