
New York Times (NYSE: NYT) business journalist Floyd Norris articulated one such observation during a roundtable discussion with other Times journalists on "The Charlie Rose Show" on PBS Monday night.
Regarding the bank bailout plan, Norris said, "This is a case where justice and success don't come together."
And that observation summarizes the trade-offs and dilemma present in the current crisis. If the U.S. wants a banking fix success, with normalized credit that facilitates commerce, it will have to involve some of the current financial players who were at least partially responsible for the crisis in the first place.
Alternatively, if we want justice to be done, Norris says in so many words, "so be it," but understand that punitive measures against current players who played a role in the mess, runs the risk of having inexperienced players at the helm, entirely new processes that are not likely to be as efficient, and/or potential bureaucratic bungling. In other words, if the nation's goal is justice, a lot could go wrong, and a lot of macroeconomic harm could be done.
The justice/success trade-off also helps explain some of the public's frustration, Norris added. The public's performance expectation for the bank bailout is too high -- sort of like asking that a baseball player possess blinding speed and tremendous power. Every once in a while, a Mickey Mantle comes along who possesses both, but it's not the norm or likely.
Fiscal Policy / Economic Analysis: For investors, the view from here argues that the bank bailout has to focus on success, not a 'party purge' of existing players. Some of those players are intrinsic to getting the financial system functioning again, and if the nation does not fix the financial system, nothing else -- not the stimulus package, not health care reform, not energy policy -- will matter.
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Financial Editor Joseph Lazzaro is writing a book on the U.S. Presidency and the U.S. economy.











Reader Comments (Page 1 of 1)
2-10-2009 @ 11:28AM
Marc said...
Justice didn't come when things were looking rosy and now you don't want justice to come when it counts the most? The harm that would come through justice is the harm to rich people's wealth that comes from accountability for their dumb excesses. Harm to the rich and powerful would improve this country over long-run when accountability is restored. What is going to happen though is that rich people's wealth will be restored at the eventual disproportionate expense of the middle and lower classes.
Justice has never come in this country anyways! I am talking about real justice, where every working person is afforded a living wage and a respectable living; where taking care of health care needs does not destroy your livelihood and cause stress and depression in people who just want a simple life and have a fighting chance. Where petty theft is not punished harsher than destroying thousands and millions of people’s life-savings. Where pushing money and paperwork around in vaporous and fragile schemes is not rewarded with billions of dollars in siphoned off wealth that is not value earned but simply a scalable scheme. Where corporations and foreign interest groups don’t control our government and have more power than the American citizen. Where immigration, civil, and penal laws are upheld; no matter whether it benefits the rich or corporations not to. Where every person is afforded the equal opportunity, not just the affluent middle class and above. And on, and on!
This country was founded on injustice and perpetuates injustice. It is rather pathetic of anyone not to see this!
I ask you; when will justice come if it does not come now? Of course it is better here than in many other countries, but less bad does not mean success!
2-10-2009 @ 11:44AM
Yon said...
Justice? When blackmail is the favorite Union tool, and Prosecutors do nothing about it, what justice are we talking about? We have Union boys taking $70 and hour, running companies to bankrupcy, while the educated population is unemployed.
2-10-2009 @ 12:28PM
grandmommyjune said...
Why can't we have justice and success. The leaders on Wall Street have already proven that they cannot and will not bring the system under control. who knows whether some middle manager or even some unknown economist might not have brilliant ideas about how to accomplish this? We simply continue to put the same people in positions of power because they belong to the good old boy network and assume they are going to change their basic character. Unfortunately, one thing that does not change is an individuals basic character. Once a greedy, arrogant, self-promoting individual, always the same. What possible reason do they have to change when they are getting a by on their current decisions. Justice should be a part of success. Otherwise we simply self-perpetuate the same old story. Maybe these "leaders" will be "good" for a while but the next time a chance comes along for them to make a lot of money and screw the stockholders and the American public, what is to stop them since they have got away with it so many times? There is no way that the American people shold be stuck with these yahoos in control of anything other than their own personal finances and definitely not making decisions that affect Americans for generations to come. Get real for once and listen to what we are saying. President Obama, where is the change and the hope for the ordinary American citizen?
2-10-2009 @ 2:11PM
grandmommyjune said...
The stock market is speaking loudly about the American consumers opinion of the bail out, the increase infunds desired by Tim, the Tax dodger. Whe is enough enough. Can't wait to see what kind of bonuses the bigwig friends of Obama and Timmy boy get this year.
2-11-2009 @ 9:26AM
lou said...
If the investors just want a fix without justice, then let the investors fix it and leave the tax payers alone. What is wrong with new blood? They can't do much worse than the ones that have destroyed the financial system. The old ones failed. Bring on the new.