A Second Act for Spitzer?

Posted in: Uncategorized | By: | March 19, 2009

“Too many of us look upon Americans as dollar chasers. This is a cruel libel, even if it is reiterated thoughtlessly by the Americans themselves.” – Albert Einstein

Mended Man?

Mended Man?

There is an attorney who can get to the bottom of our current financial crisis and lay the blame and guilt at the foot of the culprits. He has already gone after fraud at AIG, brought down the Gambino crime family’s control of trucking and garment industries in New York City, prosecuted predatory lenders, computer chip price fixing, securities frauds, and sued Richard Grasso, the former head of the New York Stock Exchange for not fully disclosing his $140 million deferred compensation package.

Eliot Spitzer, phone home.

Spitzer would make an ideal federal prosecutor for the government to go after all of the people who sold the ponzi scheme known as derivatives or Credit Default Obligations or Credit Default Swaps, which were bound to end with the last buyers in line having the pyramid of paper collapse on their heads, and then all the way down the row to the sellers and investors. The former governor of New York has the resume’ as attorney general and serving in the Manhattan District Attorney’s office and, in both capacities, he concentrated on white collar crime.

Name one person better qualified to get to the bottom of what happened on Wall Street, prosecute the bad actors, and help design laws that prevent a recurrence. There is no one more ably suited for this critical task. Of course, the Obama administration isn’t talking about a federal prosecutor but there seems little doubt we are in need of legal scrutiny regarding bonuses, buyouts, salaries, and, indeed, even a deconstruct of the derivatives market and how these contrived instruments were allowed to morph into the hairy monster that ate America.

I don’t want to hear about Spitzer’s moral lapse. I live in a country where my former President showed similar bad judgment, many members of congress conduct themselves poorly with regards to matters sexual, and the entire population has human failings. I don’t condone Spitzer’s behavior but I also don’t believe a man with his education and experience needs to be permanently marginalized by a culture and an economy that needs his insight and skill. American society has made an accommodation that allows, rightly or wrongly, for a distinction between an individual’s personal conduct and their professional performance. Washington and most of the corporate offices in this country would be empty structures if we had not made this compromise. We are human beings; we screw up and need redemption.

Let’s give Spitzer another shot. Put him on this task of getting to the bottom of what went wrong on Wall Street and how our retirements did the amazing disappearing act. As an example of his tenacity and skill, consider what he did regarding mutual fund abuses way back in 2003 when we were all flush with excitement about our thrumming economy. Spitzer knew people were playing games and running scams to make things better than possible with natural market forces. Using arcane practices known as front running, late trading, and market timing, Bank One, Putnam Investments, Prudential Securities, Invesco, Janus, and Bank of America were providing benefits to some of their big investors using practices considered to be fraudulent and unfair by the SEC. The feds investigated in the wake of the work conducted by Spitzer’s team and these fancy fiscal maneuvers were shut down. The heads of several significant mutual funds resigned in disgrace.

The man knows what to do and where to start looking. Why would we not put him on point to help taxpayers and the government better understand what has just transpired? Don’t we need to know or are we afraid to learn that the pirates are still in control of the high seas?

Scott Fitzgerald was wrong about American lives. There are second acts. In fact, life in America is all about second acts. If ever there were a culture that offered redemption and renewal and loved a comeback, it is ours. We enjoy seeing people fall from high places but we seem to be pleased even more when they pick themselves up, mend, and get on with other challenges because we know, as Papa Hemingway wrote, they have become “stronger in their broken places.”

Eliot Spitzer’s broken place is healed. Let’s put him back to work.

3 Comments for this entry

  • Jack Holt

    INteresting post, Jim. Weren’t his means at issue? I remember reading about his team taking some serious legal license to uncover the fraud.

    Overall though, good thought.

  • Ray Wiegel

    Thanks you. Thank you. Thank you. What an interesting ‘coincidence’ that Spitzer was taken out of the game RIGHT before the financial meltdown happened.

    While I have also read in the mainstream press about Spitzer’s questionable tactics in uncovering fraud, this pales in comparison to the tactics used to create it in the first place.

    ‘Don’t we need to know or are we afraid to learn that the pirates are still in control of the high seas?’

    I believe that by now most Americans know this instinctively. As a country, we’ve matured a lot in the past 8 years and part of that process has been an unveiling of the scared old men huddling behind the phantasmagoric comic tragedy they’re trying desperately to orchestrate.

    My two cents – let’s get Spitzer back in the game and REALLY start to create a new tune.

    Thank you for being a voice of reason in this manufactured scandal.

    – Ray

  • Linda Shaw

    Good for you. After Madoff, Spitzer’s affair is nothing. And Ray is right, the disclosure was payback. The wonderful thing about being human is that human beings can change. Goodness, what a world if they couldn’t.

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