Where is the bank leadership?
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TEXT OF INTERVIEW
Scott Jagow: Time to visit with our economics correspondent Chris Farrell. Chris, we’ve been getting a lot of e-mails, asking why we aren’t hearing from bank CEOs on this whole mess. Where is the bank leadership?
Chris Farrell: What leadership? Where are they? There’s only one leader in the private sector that’s involved with money that’s taken a stand and is being reassuring to the American public.
Jagow: I think I know who that might be. And when our people went out on the road last week, we heard from a lot of people about Warren Buffett. They were pointing to Warren Buffett as being a person they trusted the most.
Farrell: And it’s even made me almost start to admire the Japanese custom — and I always thought there was a little bit of hypocrisy there, where the head of the organization or the company that had gotten into trouble, you know, will apologize before the nation and take responsibility. You know what, I think it’s a good practice. I’d like to see Lloyd Blankfein and John Thain and John Mack and James Diamond and Robert Kelly and all these heads of these banks that are getting a capital infusion from the U.S. government to take some responsibility. I think that Ben Bernanke has taken responsibility, I think Paulson has taken responsibility. You and I can have a discussion, an argument about whether they’ve done the right thing. But there’s no question that they’ve been exercising leadership.
Jagow: Why do you think that is? Why do you think that these bank leaders are keeping their mouth shut?
Farrell: The main reasons are they don’t know the scale and the scope of the problems that they’re dealing with that they oversaw. And I think that they’re genuinely worried about their own pocketbooks — that’s what they’re most worried about, I now believe that. It’s the only way to explain the actions that they’re taking. I don’t see any of them putting their own money into these companies. That’s one of the reasons why people are admiring Warren Buffett — he’s putting money into GE, he’s putting money into Goldman Sachs. He’s taking a risk, and he’s saying “I believe we’re going to be OK, I believe we’re going to come out of this.”
Jagow: What really chased me, Chris, about this whole situation is they made all this money and they did a terrible job at their job, OK.
Jagow: And now, we heard there was a big meeting with a bunch of bank leaders on Wall Street, and all they seem to talk about is deregulating, things like that. Tax breaks. I mean give me a break!
Farrell: And we don’t want those class-action lawsuits, you know we gotta have . . . what universe are they living in? Who are they talking to? One of the ironies of this whole sitiuation is that there are many people in government who have stood up and exercised leadership in the private sector, which we have worshipped for the past three decades. We’re not finding a whole lot of leaders out there.
Jagow: All right, well you’ve got the juices going this morning, Chris.
Farrell: Yes I do.
Jagow: Chris Farrell, our economics correspondent.
Farrell: Thanks a lot.
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