Bank CEOs: Just Like Us!
Everyone's fallible. Even the economic crisis' first responders.
I have to echo Marion that if there’s one overriding feeling I got while reading Too Big To Fail, it was, “These people are the leaders of our financial system?” At times I felt like I was reading the Wall Street Journal crossed with Us magazine. “Bank CEOs: They’re just like us!” Except with more money.
Very few people come out heroic or even unscathed; even Jamie Dimon’s victory in acquiring Bear is slightly Pyrhhic: He had to face an angry Congress and rumblings of a populist uprising in defending the sweetheart of a deal he got his firm. I still remember the shock at seeing the “March on Wall Street” posters dotting my neighborhood last year.
Yet, Sorkin excels when, through his presentations of material, he makes it clear that while some may see bankers as villains and others as business geniuses, they are, in essence, just doing their jobs. That’s no defense when they commit crimes or sink their companies. But it is a tidy explanation of how to comprehend the Bankers Gone Wild scenes vision of the past year.
What is slightly indefensible to me is that, as AIG's (AIG) massive screwups become exposed, Geithner is playing Frankenbank. He wants Citigroup (C) to buy Goldman Sachs (GS), or Goldman to merge with Citigroup (I’m still not sure anyone knew which he was proposing); he wants Merrill Lynch to merge with Morgan Stanley (MS), he wants Wall Street to huddle up and throw a lifeline to AIG, and he wants them to help with Barclays’ purchase of Lehman Bros., too.
It’s high comedy and irony that Geithner treats the concept of “too big too fail,” as a mandate to be achieved, rather than an outcome to be leery of. I understand he was performing triage, and I understand balance sheet math is such that slapping together two banks with different sets of problems might really be a viable solution. And some of the banks he was attempting to play God with, like Citibank, are still in serious trouble. Perhaps Geithner, lifelong technocrat, is really a stifled M&A guy? Sorkin suggests as much in the epilogue: “While the fact has often been overlooked, Geithner, by his very nature—as has been demonstrated throughout this book and in his subsequent policies as Treasury secretary—is as much a proactive deal maker as Paulson, if not more so.”
Geithner seemed so infatuated by the art of the deal and eager to play dealmaker that if one of the monstrosities he proposed had actually been created, I almost wonder whether he wouldn’t have had a signing ceremony for the CEOs right in his office at the Federal Reserve or Treasury Department.
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