What makes this history all the more unfortunate is that the warning signs about Mr. Spitzer were many and manifest. In the final days of Mr. Spitzer's run for attorney general in 1998, the news broke that he'd twisted campaign-finance laws so that his father could fund his unsuccessful 1994 run. Mr. Spitzer won anyway, and the story was largely forgotten.
New York Stock Exchange caretaker CEO John Reed suggested Mr. Spitzer hadn't told the truth when he said that it was Mr. Reed who wanted him to investigate Mr. Grasso's pay. The press never investigated.
On the substance, his court record speaks for itself. Most of Mr. Spitzer's high-profile charges have gone up in smoke. A New York state judge threw out his case against tax firm H&R Block. He lost his prosecution against Bank of America broker Ted Sihpol (whom Mr. Spitzer threatened to arrest in front of his child and pregnant wife). Mr. Spitzer was stopped by a federal judge from prying confidential information out of mortgage companies. Another New York judge blocked the heart of his suit against Mr. Grasso. Mr. Greenberg continues to fight his civil charges. The press was foursquare behind Mr. Spitzer in all these cases, and in a better world they'd share some of his humiliation.
Instead, remarkably, they continue to defend him. Ms. Masters, his biographer, was on CNN the day Mr. Spitzer's prostitution news broke, reassuring viewers that the governor really was a "lovely" guy. Other news reporters were reporting what a "tragedy" it was that such a leading light in the Democratic Party could come to such an ignoble end.
There's little that's tragic about Mr. Spitzer, unless you consider his victims (which would appear to include his own family). The press would do well to meditate on that, and consider how many violations they winked at and validated over the years. Politicians don't exist to be idolized by the press, at least not by any press corps doing its job.
Wednesday, March 12, 2008
Kimberly Strassel on Spitzer's warning signs, ignored by duped accessories (otherwise known as the media)
Megan McArdle disagrees with Felix Salmon about the goodness of Spitzer's bully tactics
Some of his more bizarre prosecutions, and the weird settlements he demanded, made it clear that he didn't have the understanding of markets to effectively be the financial regulator he set himself up as.Worse was how he did it. He couldn't make cases--the highest profile case he brought to trial basically ended with an acquittal on all counts. Yes, securities cases generally settle, but not like Spitzer's--precisely because the cases are generally a hell of a lot stronger than any of Spitzer's, cases where the prosecutors had some hope of proving that someone had actually done something illegal. Spitzer was able to do this through the power of the Martin Act, which gives the New York State attorney general practically despotic powers to go after fraud. Among the provisions: the prosecutor does not have to prove that there was intent to commit fraud, that any transaction took place, or that anyone was actually defrauded; he can interrogate potential defendants with no rights to an attorney or against self incrimination; he can keep the investigation secret or make it public, just as he pleases; and can subpoena just about anything. Practically the only limitation on the AG is his goodwill and sense of fair play. Eliot Spitzer was not overgenerously endowed with either.
Banks and others came to the table because Spitzer would launch these investigations and then use a carefully orchestrated series of press releases and leaks to torpedo their stock price. But many of the more spectacularly incriminating sounding excerpts from subpoenaed documents were so misleadingly taken out of context that they would have been grounds for a libel suit if he'd been a journalist. Don't get me wrong--many of them were guilty. But this kind of tactic doesn't distinguish between the guilty and the innocent; anyone in a credit-dependent industry whose stock value is plummeting would have to negotiate, because Spitzer's inquiry could shut them down. (Can and did, in some cases--indeed, he apparently nearly shut down Merrill's asset management business until a judge reversed the order.) Often, these shaded into personal vendetta--Dick Grasso's pay package seems like he was grossly overvalued, but what business is it of Eliot Spitzer's how much a private body pays it's CEO? This has nothing to do with the reasons we regulate financial markets.
Moreover, all his quick settlements screwed the investors he was supposed to be protecting. The unjust settlements extorted money from those firms' shareholders and dumped it into state coffers. And the just ones did nothing for investors: the money went to the states, not to the people who had allegedly been defrauded. Shutting the investigations down quickly forestalled discovery that would have helped clients sue. Eliot Spitzer got the headlines; investors got nothing.
I'll post Felix's response, since she called him out, if he manages to put something together for their mutual readership. My note of Felix's pro-bullyness here.
Quotes of the day
A university consists of a faculty attached to a fundraising apparatus, where it used to be the other way around.--Arnold Kling
I’m sorry to say that a large part of the progressive movement seems to have lost its sanity.--Paul Krugman
John McCain has the most inconsistent voting record in the Senate
A show about nothing can be hilarious. But a voting record about nothing?
Long term inflation concerns
The fact is that around most of the world, inflation ― and eventually inflation expectations ― will keep climbing unless central banks start tightening their monetary policies.I've looked at inflation here and here and here in the last couple of weeks.
The U.S. is now ground zero for global inflation. Faced with a vicious combination of collapsing housing prices and imploding credit markets, the Fed has been aggressively cutting interest rates to try to stave off a recession.
But even if the Fed does not admit it in its forecasts, the price of this "insurance policy" will almost certainly be higher inflation down the road, and perhaps for several years.
So there IS hope for America!
Congrats, Mr. Mamet, the Truth will set you free!..., in the abstract, we may envision an Olympian perfection of perfect beings in Washington doing the business of their employers, the people, but any of us who has ever been at a zoning meeting with our property at stake is aware of the urge to cut through all the pernicious bullshit and go straight to firearms.
I found not only that I didn't trust the current government (that, to me, was no surprise), but that an impartial review revealed that the faults of this president—whom I, a good liberal, considered a monster—were little different from those of a president whom I revered.
Bush got us into Iraq, JFK into Vietnam. Bush stole the election in Florida; Kennedy stole his in Chicago. Bush outed a CIA agent; Kennedy left hundreds of them to die in the surf at the Bay of Pigs. Bush lied about his military service; Kennedy accepted a Pulitzer Prize for a book written by Ted Sorenson. Bush was in bed with the Saudis, Kennedy with the Mafia. Oh.
And I began to question my hatred for "the Corporations"—the hatred of which, I found, was but the flip side of my hunger for those goods and services they provide and without which we could not live.Do I speak as a member of the "privileged class"? If you will—but classes in the United States are mobile, not static, which is the Marxist view. That is: Immigrants came and continue to come here penniless and can (and do) become rich; the nerd makes a trillion dollars; the single mother, penniless and ignorant of English, sends her two sons to college (my grandmother). On the other hand, the rich and the children of the rich can go belly-up; the hegemony of the railroads is appropriated by the airlines, that of the networks by the Internet; and the individual may and probably will change status more than once within his lifetime.
What about the role of government? Well, in the abstract, coming from my time and background, I thought it was a rather good thing, but tallying up the ledger in those things which affect me and in those things I observe, I am hard-pressed to see an instance where the intervention of the government led to much beyond sorrow.
But if the government is not to intervene, how will we, mere human beings, work it all out?
I wondered and read, and it occurred to me that I knew the answer, and here it is: We just seem to. How do I know? From experience. I referred to my own—take away the director from the staged play and what do you get? Usually a diminution of strife, a shorter rehearsal period, and a better production.
And I realized that the time had come for me to avow my participation in that America in which I chose to live, and that that country was not a schoolroom teaching values, but a marketplace.
I began reading not only the economics of Thomas Sowell (our greatest contemporary philosopher) but Milton Friedman, Paul Johnson, and Shelby Steele, and a host of conservative writers, and found that I agreed with them: a free-market understanding of the world meshes more perfectly with my experience than that idealistic vision I called liberalism.
2008 March Madness Calendar
March 16: Selection Committee announces at-large bids
March 18: 65th v. 64th Play-In
March 20-21: Sixty-Four
March 22-23: Thirty-Two
March 28: Sweet Sixteen
March 30: Elite Eight
April 5: Final Four
April 7: National Championship
The 12 teams who hold automatic bids (as of today, Wed Mar 12):
Cornell (20-5)
Winthrop (22-11)
Austin Peay (24-10)
Belmont (25-8)
Drake (28-4)
George Mason (23-10)
Siena (22-10)
Davidson (26-6)
San Diego (21-13)
Oral Roberts (24-8)
Butler (29-3)
WKU (27-6)
Cornell, my alma mater, did get crushed by Duke (currently ranked #6 in the nation by Associated Press) back in January, losing by 14 points. But Wisconson, #10, lost by 24. So I like our chances!
DISCLOSURE: I am short NCAABK.DUKE and long NCAABK.FIELD.
Tuesday, March 11, 2008
A 30-year irony capsule
The worst thing about political jokes is that some get elected.
Comic roundup of yesterday's top headline
Did you happen to see the press conference? Very dramatic. Eliot Spitzer was there. He had yellow crime scene tape draped around his pants – crazy.
The thinking now is that the governor may step down now to spend less time with his family.
Top 10 list of Eliot Spitzer Excuses [video]:10. “Oh come on, like you were never involved in a prostitution ring.”
9. “Hookers is fun.”
8. “Just trying to help the economy.”
7. “Have you ever been to Albany?”
6. “It’s part of my new MTV prank show, ‘Spitz’d.’”
5. “Haven’t been myself since Roy Scheider died.”
4. “Uh, tainted beef?”
3. “Whether it’s a hooker or your wife, you’re always paying for – you married fellas know what I’m talking about.”
2. “Wanted to be known as the Charlie Sheen of politics.”
1. “I thought Bill Clinton legalized this years ago.”
Latest episode of Bikini Statistics
courtesy of Bruce McQuain:
Previous BS installment here.A majority of Americans do not read political blogs, the online commentaries that have proliferated in the race for the U.S. presidency, according to a poll released on Monday.22%?
Only 22 percent of people responding to the poll said they read blogs regularly, meaning several times a month or more, according to the survey conducted by Harris Interactive.
Well, let’s see, 22% of 300,000,000 is what?
66,000,000.
Yeah, ok, I’ll settle for that.
I’ll tell you who does read political blogs - most of Washington DC and the news media - to include Reuters.
Statistics are like a bikini. What they present is suggestive, but what they conceal is vital--Aaron Levenstein
Quote of the day
Our search for happiness might be exactly what is preventing us from finding it--Raina Kelly
Real Median Income per Household Member is up over 60%
Monday, March 10, 2008
Obama distances himself from his best advisor
o George: Listen... there's something that's been on my mind and we haven't really talked about it. It's kind of important to me.
o Susan: What is it?
o George: Well... I put a lot of thought into this and I think I would like you to sign a prenuptial agreement.
o Susan: A pre-nup?
o George: Yeah.
o Susan: [bursts out laughing]
o George: What's so funny?
o Susan: You don't have any money. I make more money than you do. Ha ha. Yeah, gimme the papers I'll sign 'em.
Quotes of the day
If Mr. Spitzer wants us to butt out of his private affairs, he should from here on in set an example by butting out of everyone else's private affairs.--Donald J. Boudreaux
Prostitute Admits Link to Elliott Spitzer; Resigns From Escort Service in Disgrace--Radley Balko
Spitzer Swallows?--Economist
From Troopergate to Shtupergate--Suitably Flip
To be sure, we already knew that Eliot Spitzer had no respect for the letter of the law--his signature move was going after people on the basis of moral outrage, rather than, say, violating a statute. But his behavior since he got into governor's office has been, in the deepest sense of the word, scandalous. His use of the state police to prosecute petty political battles, and now his flagrant violations of statutes that he himself used to enforce, seem to indicate that Spitzer thought he had been elected to the position of Third World Dictator. To call him a hypocrite is too kind--he isn't even paying tribute to virtue. If he had an ounce of shame, he would resign.--Megan McArdle