Monthly Archives: January 2013

The Hubris of Wall Street–Location, location, location

There’s an old saying in real estate: your property’s value is determined by one thing: location, location and location.

I guess the same is true when we’re discussing criminal culpability when you steal hundreds of millions of dollars from your investors.

Today, Russell Wasendorf got the book thrown at him. He’s the disgraced investment manager from Cedar Falls, Iowa who bilked his 13,000 clients out of $215 million over a 20 year Ponzi career. For his crimes, he received the maximum sentence of 50 years in jail. He’ll be 107 when he gets out.

Good. He deserves every day in jail he received.

But what about Wasendorf’s counterparts on Wall Street? The same sort of Ponzi scheme guys that robbed America of billions and sent us perilously close to the brink of financial ruin?

Too bad Russell, an additional offense is that you live and work in the wrong zip code. Remember, location, location, location.

Since the Great Financial Meltdown of 2008 began, which had its epicenter in Wall Street greed, the Obama Administration, SEC, and Treasury Departments have largely sat on their hands and let time elapse without taking any concrete action to prevent what happened from happening all over again. While they trumpet the Dodd-Frank legislation, it doesn’t seem to address the real causes of the Meltdown.

And what’s worse is that the Administration has been even more lax on bringing any of the Ponzi crowd to justice. And that’s raised the ire of Iowa’s senior Senator, Chuck Grassley.

In a tersely worded letter to the U.S. Attorney General, Senator Grassley asked if “too big to fail” now also means “too big to jail.” Senator Grassley’s ire is well placed, and the Administration’s policy of handling these cases is nearly incomprehensible.

And if this isn’t enough to raise your blood pressure yet, then please read a recent story in the Washington Post about how Treasury ignored its own guidelines on executive pay at firms that received taxpayer bailouts. Treasury approved compensation packages of more than $3 million last year for the senior ranks at General Motors, Ally Financial and American International Group.

It is absolutely shocking to me that the people who ran these companies into the ground and then leaned on the taxpayers of the US for massive bailouts should (a) have a job, much less (b) get a paycheck and certainly not (c) ever get a bonus.

So what’s the moral of this story for Russell Wasendorf?

Well, had he worked and lived on Wall Street, he would have gotten off scot-free. Heck, he probably could have gotten federal funds to bail out his Ponzi scheme, been retained as the firm’s CEO, and then received a bonus from the federal government for his hard work and sacrifice.

Location, location, location.


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The Constitutional Conundrum

I’ve been writing, rewriting, and rewriting this post for weeks. It deals with my perspectives on the gun control debate raging across America in the wake of the tragic events in Newtown, Conn.

There have been many voices on this subject over the past few weeks. And one of my favorite writers, Charles Krauthammer, synthesized much of what I planned to write in an article that appeared in Sunday’s Des Moines Register. And of course, Mr. Krauthammer’s article was much better than any of my previous drafts. There’s a reason he’s a nationally syndicated writer, and I’m not.

My premise in this debate is rather simple: We need to focus not only on Second Amendment rights. We also need to focus on free speech rights of the First Amendment; due process rights of the Fifth and Sixth Amendments; and equal protection rights of the 14th Amendment. The ultimate solution, if people are serious about finding one, will involve concessions from all corners of the Constitution and from all interested.

As Mr. Krauthammer stated,

That’s a lot of impingement, a lot of amendments. But there’s no free lunch. Increasing public safety almost always means restricting liberties.

We made that trade after 9/11. We make it every time the Transportation Security Administration invades your body at an airport. How much are we prepared to trade away after Newtown?

Those who are serious about getting to the bottom of this issue will speak clearly to that point. They will take the time to discuss infringement of all rights before focusing on the infringement of any rights.

Those who are only interested in demagoguery will only address selected rights.

We will know immediately that they are not serious about solving this problem or protecting public safety. They will be interested only in scoring cheap political points.  On this subject, we’ve had far too much of that already.

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