Bing Blog

The Inquisition Convenes in Washington

Lloyd Blankfein

Tomorrow in Washington, the new Financial Crisis Inquiry Commission, gets together to hold a perp walk for the finance industry. You know the drill.  Lawmakers gather after the crime has been committed, the body taken away and autopsied, the scene scrubbed and everybody has basically returned to normal. Only then is the inquisition mounted. The usual suspects are rounded up and made to stand before the tribunal, their pictures taken while they take the oath, all due pomp and ceremony observed.  Then the fun starts. Fingers are wagged in chastened or truculent faces. Outrage is aired, each inquisitor topping the other in the size and ferocity of his dudgeon. Soundbites are offered in hopes of wider coverage. Then everybody goes home.

There are many excellent questions that the Commission should ask Lloyd Blankfein (Goldman Sachs), Jamie Dimon (JPMorgan Chase), John Mack (Morgan Stanley) and any other nabobs unfortunate enough to be called before the tribunal tomorrow. Many are laid out today by Andrew Ross Sorkin in his DealBook Blog, and excellent questions those are indeed. I have some others that might be asked, if anybody is listening:

  • Mr. Blankfein, what's your bonus this year? And how much of it would you have been willing to give to the Treasury in exchange for getting out of today's hearing?
  • Mr. Dimon, can you tell us how you manage to get so much good personal press, while others in the business are constantly teased and goaded? Do you think it may be because you're cuter than any other major financial figure?
  • For the group: When do you think this kind of annoying scrutiny will be over and you can all get back to business?
  • For the group: What kind of regulation would you find tolerable? We don't want to hurt your feelings, since many of us look forward to joining your firms after we leave the public sector. I guess that's not really a question. 
  • What hotels do you like to stay at when you're in Washington?
  • Why do you think it took those of us in Washington so long to notice that the entire financial underpinning of our economy was reliant on bad loans and inflated real estate prices?
  • (For Democrats:) How do you think the failed policies of the Reagan and Bush years created this terrible crisis?
  • (For Republicans:) How do you think the failed policies of Bill Clinton created this terrible crisis?
  • What investments look good in 2010? Like, what are you guys putting your money into right now?
  • What's in YOUR wallet?
  • Have you no shame?

I only offer the last one because it tends to be picked up on the cable news channels afterwards. They love it. Congressman leans forward and points his finger at the miscreant in the dock. "Have you no shame?!" he thunders. There's no way to answer that. Look at the options:

1. Yes, I have shame.

2. No, I don't.

Either way, you lose. And then you go back to New York.

18 Comments Add Comment

At least they won't have to drive 8 hours in a hybrid to get there. You can bet that the short runway at White Plains is fully booked for tomorrow morning.

THE>>>>>WORST>>>>>BLOG>>>>>EVER

Love this piece, Bing.

Those testifying at tomorrow's hearing should also be asked who, in their humble opinions, are the big winners in this unprecedented global economic crisis.

I'm betting that no one will squirm, that all will appear unflappable.

I love your mention of "the usual suspects." Makes me think of "Casablanca" and the "shocked, shocked" Captain Renault. Good metaphor for the current situation.

As for Jamie Dimon, I think he gets treated lightly because of his name. "Jamie" is so cuddly, so little boyish -- not anything grown-up and sinister, like "James", for instance. Very ruonded and soft, unlike the hard, gutteral pronunciations of "Blankfein" and "Mack".

And "Dimon" is close to "Damon", so maybe "Jamie Dimon" is just getting mixed up with "Johnnie Damon". All American boy -- baseball, mom and apple pie. Gosh, what's not to like?

If Congress would really like to get serious about getting to the root cause of the finacial crisis I would suggest questioning a broad cross section of Americans who were involed in the real estate bubble and crash. So, these are the people I would call and these are the questions I would ask like to ask them.

1) To main street America: Why did you abondon your puritan work ethic and think everbody could get rich by investing in real estate?

2) To the main street loan brokers and main street banks: why did you lower your lending standards and make loans to people who obviously could not pay them back?

3) To the real estate industry: Why did you talk people into buying overly inlfated homes?

4) To Wall Street: What on earth were you thinking when you bought such bad loans?

5) To the Rating Agencies: How could you rate such bad loans as tripple A?

6) To Fredie Mac and Freddie Mae: Again, why did you lower your lending standards and accept these bad loans?

7)To the Federal Reserve: Why did you keep interest rates so low for so long causing people to speculate in real estate rather than saving?.

8) To Congress: Why did you mandate and entice banks to lower their lending standards?

9) Finally to all our acedemic istituitons and financial advisors: Why did you all think real estate was immune to speculative bubbles and crashes?

If you want to find the real villians who caused the real estate bubble and crash, just look in the mirror America.

Will any of you be buying or naming a day after yourselves when you recieve your record bonuses?

To Congress:

(1) Why did you keep raising the dollar limit for aggregate loans Freddie and Fannie could buy up from the banks and mortgage companies in the middle of the housing bubble? This was like throwing gasoline on the fire.

(2) If you had no idea we were in a bubble that would soon pop, why did you move Heaven and Earth to modify the bankruptcy laws just before the global economy went to Hell in a hand basket?

Appearance is more important than substance in such matters.
The elected must appear to be upright.. not the limp dicks they really are when it comes to serving the public good.

To have it end in any other fashion ,,would be......beyond the imagination of the average taxpayer.

Congress changed the law that kept investment banking separate from retail banking. That law was part of the fix after the 1929 crash.

Any chance that some Members of Congress will testify as to why they changed the rules so that formerly merely large banks are now Too Big To Fail?

Didn't think so.

Looks like the bonus money funneled into campaign contributions was really well spent!

Mr. Blankfein, echoing our next CEO, Sarah Palin, may I call you Lloyd?

"Borrowing from Gov. Palin myself, you betcha. "

Great.

I only want to know one thing.

What is your corresponding rank in the Salvation Army, and might we see you at a kettle any time soon?

"Generalissimo, and highly unlikely, Senator, as we do God's work at Goldman somewhat differently."

Mr. Chairman, I have no further questions.

The Chair thanks the Senator from the great state of Contribution, I mean Connecticut.

The business of the people being concluded, these hearings are adjourned.

Wait up, Lloyd.

Bing,

I'm feeling somewhat jealous. Cho has a crypto clearance.

Why does Cho know about this decoder ring stuff before the rest of us?

Did I miss the encryption column?

This post will not self destruct in 10 seconds?

Was Barbara Bain a babe, or what?

And that name, Cinnamon Carter.

Sorry, I digress.

Funniest thing I've read in a long time. You nailed it, Bing.

Ahhh, come on Cho Cha-Cha-Cha. At the very least it's funny =)

It is, indeed, a pointless charade, carried out by the subjects' political lapdogs...a pseudo 'blood-letting'....public drama to defuse the public's impotent and poorly focused rage.

It works....we'll all soon be distracted by 3D TV, and whatever else comes down the pike....and that would be quite enough if these turds would be satisfied with simply being filthy rich...and left enough for us proles to enjoy our lives. :-)

I am reminded of a setup commonly used by pickpockets: two or three start a fight on the street, causing the crowd to gather round, while the rest of the gang cleans out the pockets of the gawks.
My question to the "usual suspects": how long before US $1 becomes cheaper than 1 Renminbi?

Cash_is_trash....I'm sort of worried about you son....I think we're sympatico in this one. Hope I'm not coming around to your way of thinking (I'm not donating my TV to anyone).

The pick-pocket distraction scam analogy is quite apropo.

Rust Bowl chatter c/o Trafficant, former congressman, Youngstown, Ohio! "Congress is just one big whore house"! Do opinions really matter?

Perhaps we could shorten these hearings...

Just have each banker begin his turn in the hot seat with this question:

"Congressman, considering the money we donated to your campaign, what did you want to ask me?"

Imagine that - no more questions.

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