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Harry Rosenberg

Imagine a hotshot, who is brilliant and innovative, does pioneering work, revises your thinking, and makes great public presentations with a stage presence that has no bounds. He is fit for just about any challenge, and he just might be worth an outrageous bonus. The key word is might.

Why doesn't it always work out that way? Most importantly, simple arithmetic gets in the way. How can any bank grow faster than the interest rates they charge less operating expenses. Banks can't create capital, but they can corral it via acquisitions or nefarious means--like unloading toxic assets on others at prime prices.

How can we hire the lead-in hot shot?

AIG CEO, Edward Liddy, has a formula (paraphrased):
"I can only retain the best and brightest by paying $165 million."
And that is supposed to be that!

What do you think?

But what if it doesn't work out? Is Liddy caught up in an all-too-common "happy-go-lucky" or "don't-bother-me" syndrome? His best and brightest hot shots had the transcripts, the stage presence, the meteoric rise through the ranks, the self confidence. Yet they were caught up in the emotions and exuberance; ordinary employees might indeed know better, why did not the the best and brightest--like Liddy himself.

Surely Liddy is no ordinary. Could it be that connections and insider tracks were/are all that count? It would seem so.

Christopher Hayes, in the 13 Apr 2009 issue of The Nation, quoted a Wall Street Journal article that put it nicely: "The Bank(er)s message: If you want our help to get credit flowing again to consumers and businesses, stop the rush to penalize our bonuses." Whether or not that is the literal truth, it is certainly consistent with what most of us know, but deny, about human personality and character. Moreover, the Wall Street Journal does not criticize financiers lightly. They have to be really bad. So there must be some truth in this report. As for Liddy himself, he has been on the job only a few months. His salary? One dollar! Isn't he one of the best and brightest? There is no rigorous definition here--only a trend. But a trend is enough.

As for the big shots, Hayes makes a telling point:

    Remarkably, the small class of (mostly) men running these failed financial institutions seem just as aggrieved [as we are]. Instead of reacting to their failure with shame or apologies, many exude distrust and contempt for the great unwashed who don't understand their brilliance.

This is psychopathic behavior to say the least.

Back to the common level. What if our hotshot in our lead in, irritates, scares or antagonizes co-workers, finds it hard to accept ideas not his own, is uncooperative, fails to deliver on his new project as promised, has a temper, is self centered, takes excessive risks, puts his own desires above all else, and is demanding and aggressive?

This composite is not made up. Only a few elements of it can add up. Employment failures occur too regularly all across America. Even mega-scale enterprises--Wall Street and money changers--are susceptible. We in the trenches have to lose, so it is we who must wise up.

These composite behaviors represent situations I have encountered in the workplace—each ended unhappily. Impeccable skills were not enough, nor was lack of ability a problem. New hires too often failed to work out. Temperament and/or character defects got in the way. Neither was picked up during even multiple interviews.

The situation is even worse if such a highly skilled hotshot is your business partner, your spouse, or--your financial advisor. At the common level, it is easy to sort out the troublemakers if one tries hard. Character usually means more than skill sets or intelligence unless the latter are seriously deficient. So screen potential colleagues first for character and temperament, then for skills and experience.

Back to the plutocratic level.

AIG got into trouble for the same reasons the mega banks did--Plutocrats look out for themselves first, last and always. They learn by example, or are even schooled from early on to be craven, corrupt and clueless. Birthright and connections mean ever so much more than ability.

Their ultimate measure of achievement is how much public money they can steal. Yes, I said steal. They knew exactly what they were/are doing. They are bullies, and shame on Congress and the Administration if they are allowed to get away with it. While school is still out around day 60 of this administration, there are signs that Wall Street will not be checked, nor will the banking system. An AIG board member is now advising the president. Bad move? Maybe. Weakness on the president's part? Maybe that too. To be fair, however, he is facing the greatest crises of confidence and wealth generation that ever faced an incoming president. So we will give him time, but we are less optimistic than we were.

Special interests absolutely must be stood up to. Of course that is most difficult if you owe your job to them. Since most people in Congress are in that spot, even enlightened leadership would have big trouble changing the culture. It can only evolve in the best of cases.

One thing for sure, the deepest-ever recession will hang on until confidence in our institutions is restored in the eyes of the public. That may well have begun. But it will take time and ultimately hard actions beyond priming the pump. Obama, Biden, Pelosi and Reid better get a collective move on before it is too late. This is where Obama's charisma could save the day if he uses it effectively for the time that he has. We hope he will blend short political views with longer term concerns consistently.


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