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Remember Jon Corzine. The former head honcho at Goldman Sachs went on to an undistinguished career as a United States Senator and then to an equally undistinguished stint as Governor of New Jersey.
Having failed at politics, the notoriously arrogant and liberal Corzine moved back into a world he knew well. He took over a company called MF Global. Yesterday, thanks to some of his ill-advised and overly leveraged trades, MF Global filed for bankruptcy.
It was not as big as Lehman Bros., but it made the top ten list of corporate bankruptcies.
In the New York Times this morning Andrew Ross Sorkin wonders why the Goldman “secret sauce” can't be exported. He notes that other important Goldman Sachs executives failed miserably in post-Goldman jobs. He mentions John Thain at Merrill Lynch, Robert Rubin at Citigroup, and J. Christopher Flowers
It’s not just about secret sauce or the Goldman halo. Another question immediately comes to mind.
If these Masters of the Universe are fundamentally incompetent, if they are a bunch of bunglers, how did they make so much money at Goldman Sachs?
Many people believe that Wall Street bankers are being compensated far beyond their competence and that they did not earn their bonuses. Many also believe that the bankers collude with government officials--- most often Democrats-- to game the system in their favor.
Thanks to Jon Corzine, anyone who believes that the Wall Street game is rigged now has even more grist for his mill.
2 comments:
The financial and legal industries, although they obviously perfom important functions, have grown far beyond their proper size, are directly and indirectly scarfing up too much of the nation's output, and have excessive political influence in comparison with that of other industries. See a plague of sticky governors?
Is it just me ore every time we elected a Democrat administration we got Goldman Sachs and every time we elected a Republican administration we got Lehman Bros?
I would have to agree with David that most of these financial and legal businesses grew in influence and political power way past what their core skills and abilities should have dictated. I suggest that for many of them the allusion and lust for power caused them to place their interest above the needs of the country.
Without "bailouts" these people would have failed sooner and probably caused less damage. The reason Lehman Bros went down quicker is that this is a Democrat administration. As they say, "Follow the money."
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