Jim Cramer, founder of TheStreet.Com,
has perfected the concept of treating stocks like sports teams. It
remains a brilliant innovation. But if we're going to do that,
shouldn't our focus be on the integrity of the game?
Take what's going on with JP Morgan Chase. It shouldn't take The Daily Show to remind us of our proper role.
To torture an analogy, we reporters
feel like we're “in the locker room” with business stars. We
identify with the owners, and the CEOs playing the game we're
covering, when we should be identifying with the fans.
In the Morgan case, CEO Jamie Dimon
said in 2008, when he bought Bear Stearns and Washington Mutual, that
he was taking the liabilities as well as the assets.
Since 2010 the company has set aside
$23 billion to deal with those problems, and while the settlements
coming through now look big at $13 billion and counting, they're less
than what was set aside.
Dimon made some great deals with these
purchases, and in his dealings with the government he's coming out
ahead. Whining on his behalf is silly.
And the threat from all this special
pleading seems plain. Let me explain it with another sports analogy.
Back in 1989, baseball commissioner
Bartlett Giamatti threw one of baseball's greatest stars out of the
game, for life,
although at that point Pete Rose hadn't been convicted of any crime.
Giamatti acted, as he said, “in the best interests of baseball.”
For the good of the game.
Over the next two years ratings on the
World Series rose dramatically, from 18 to 22. They haven't been that
high since, falling below 8 last year.
I would argue the reason is steroids,
and baseball's failure to deal with that issue directly. Like
commissioner Bud Selig, baseball writers were more interested in
cheering home runs during the steroid era, ignoring the huge heads
and ripped muscles on 40-year old athletes that made the scandal
obvious.
The events leading up to, and occurring
after, the Great Recession were business' version of the steroids
scandal. Just as was the case in baseball, these scandals have taken
a toll.
Each year, Gallup does a survey asking
whether people own stocks. In 2007 65% said they did. In 2013 only
52% say they do.
Millions of people have missed a chance
to double their money. Partly it's because the market's collapse in
2008 emptied investment accounts, and persistent unemployment has
kept people out. But it's also because millions of people think the
game is fixed.
Business, in other words, is seen to be
on steroids, and the fans are staying away.
Justice can be slow. When the
defendants hold trillions in assets it can be slower. When there is
an immense risk to business confidence, and the nation's economic
system, in going forward it gets even slower.
But justice does grind forward. And it
doesn't have to go forward alone.
In business every CEO, from Jamie Dimon
on down, has the chance every day to be Bart Giamatti. Giamatti, who
died just months after handing down his decision on Rose, was acting
in his role as CEO of baseball.
For the good of the business game, Wall
Street CEOs need to step back from the edge of the legal abyss. They
need to demand ethics, not just legal expediency. People who break
the rules need to be fired and broken, for the good of the business
game. You shouldn't have to risk jail to be breaking those rules. And
it doesn't matter how much these people make, for themselves or their
companies.
In the game of business, “the best
interests of baseball” is called fiduciary responsibility. It needs
to mean something again.
Saying this doesn't make me
“anti-business.” It means I support law and order. I'm
witnessing, not playing, the business game. I think all business
reporters should be focused on the good of the business game, even if
no one else is, or we are not serving the best interests of business.
In the end, it's the game that matters,
the system that matters. Not today's CEOs, but tomorrow's. All those
future little CEOs in the coffee shops, and all those potential
investors now in high school and college. They need to know that the
game is honest or else they're not going to play, and there won't be
a game to watch.
