It is surprising that with all the financial pain felt by the U.S. population, including the many individuals with 401K plans invested in the stock market, there have been no street protests demanding more immediate and effective action from our representatives in Congress and the White House.
When the war in Vietnam dominated our political lives in the 70s, angry crowds marched in every big city and raging rallies were held in Washington, D.C. Every member of Congress was visited by protesters. I was there in the Longworth building actively opposing the war and receiving anti-war constituents nearly every day. Until recently, there were regular demonstrations in the streets and on college campuses demanding that the troops in Iraq come home.
The absence of protests now when our economy has been driven into the ground by greed on Wall Street and in Washington is a mystery. We saw some of that greed uncovered when the CEO of Lehman Brothers, Richard Fuld, Jr., was interrogated before the House Oversight Committee chaired by Henry Waxman. I served with Waxman when I was in the Congress from 1969 to 1977, and there could be no better legislator to make public what happened. According to Fox News, “Richard S. Fuld Jr., chief executive officer of Lehman Brothers, declared to the committee ‘I take full responsibility for the decisions that I made and for the actions that I took.’ He defended his actions as ‘prudent and appropriate’ based on information he had at the time. ‘I feel horrible about what happened,’ he said.”
The New York Times reported that “…in response to a question from Dennis J. Kucinich, who wanted to know how Mr. Fuld’s public statements could be valid in light of efforts by JPMorgan Chase to secure $5 billion in extra collateral from Lehman in the final days, Mr. Fuld stated, ‘No, sir, we did not mislead our investors. To the best of my ability at the time, given the information I had, we made disclosures that we fully believed were accurate.’”
Really? The Times also reported, “At one point on Monday, Mr. Fuld was confronted with an internal memo dated June 8 that included warnings about Lehman’s condition and asked the question, ‘Why did we allow ourselves to be so exposed?’ Mr. Fuld, after a long scan of the memo, said, ‘This document does not look familiar to me.’”
Does anyone believe him? I think few, if any, do. Will he be punished? Some say he had an estimated fortune of $3 billion that has been reduced to $30 million, and that is punishment enough. I do not agree. I believe that if Fuld deliberately misled the investing public, he should be pursued criminally and civilly, and is only one of many who should be held accountable.
I don’t know whether Fuld is criminally responsible for the debacle. But all of us are aware of the financial void into which we have fallen. According to CNN, “…the Dow ended its worst week ever Friday, capping a staggering eight-session sell-off that resulted in a 2,400-point loss. It's not just the size of the loss keeping investors on edge, it's also the gyrations. On Friday, the Dow whipsawed, falling as much as 697 points in the first minutes of trading before quickly climbing back into positive territory, only to turn lower shortly after.” What bothers people, in addition to the pain of seeing their hard-earned retirement funds disappear, is not to see those who caused it identified and, where grounds exist, criminally pursued. Surely, some of those CEOs, CFOs and directors committed fraudulent acts. What the public demands is that those who engaged in crimes be punished. In all likelihood, nothing will happen to them. It is reminiscent of the cigarette company CEOs who testified under oath before Congress that they did not believe there was any connection between cigarette smoking and cancer. Millions of smokers died from cancer, but none of those CEOs were charged with perjury.
I am surprised that no civic leaders or political parties have been able to stir the public to take to the streets in peaceful protest. Ought there not be a public rally in every city, particularly New York, Chicago, Los Angeles and Washington, D.C., led by respected, responsible civic leaders who will convey the anger and fears of the electorate to the Washington lawmakers and demand the kind of leadership provided by FDR back in the days of the Great Depression?
People are really hurting. Those living on fixed incomes, including retirees, are wondering how they will be able to pay their bills, while those nearing retirement are doubting whether they will be able to afford to retire. Millions of Americans who have recently examined their stock statements have found their assets depreciated by as much as 42 percent from their high. Last week, the S&P was 35 percent below its 200 day moving average. The last time that occurred was when Franklin Delano Roosevelt was president.
Yes, Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke appear to be taking action, but apparently, not enough. The public is frightened and wants to know where were our leaders when the debacle was unfolding. The public wants to know when will those who are politically responsible for our agony be held accountable and when will those criminally responsible be facing judges and juries. Even if the measures recently taken by governments around the world begin to work and restore confidence and the stock markets rally, those responsible for the debacle should be held accountable.
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