Financiers: Where’s the remorse?

I don’t want to see bankers jumping out of windows. But I do want to see some of these alleged “Titans” of the western financial world expressing– and enacting– some real remorse to those of their fellow-citizens whom they’ve been exploiting for so long now and whose tax dollars they are now lining up to grab hold of.
The rapidly growing literature on the strong social value of remorse (e.g., the work of Pumla Gobod-Madikizela or other sources explored in the last chapter of my “Atrocities” book) makes clear the valuable role it plays as a gateway to social healing and thereby also to resolving the problems occasioned by the miscreants’ past deeds.
When a former miscreant credibly expresses remorse to those he has harmed, that signifies to those former victims that he:

1. Recognizes that their worth as human persons to be equal to his own,
2. Recognizes that his own previous actions have harmed these (equally valuable) other persons,
3. Expresses credible regret for that harm, and
4. Communicates a sincere desire to see it repaired.

To be even more credible, such remorse may well (and most likely, should) be accompanied by the miscreant engaging in the actual work of repairing the harm, i.e. participating in reparations of some kind.
Judged by this standard of the kind of remorse we might want to see being expressed by the former “Masters of the Universe” who have brought the western world’s financial system to its knees, yesterday’s performance by Richard Fuld, Chairman and CEO of the now-failed Lehman Brothers Bank, at the House Oversight and Government Affairs Committee fell far, far short.
The committee is conducting hearings into how the actions of the leaders of the financial world has ended up wrecking the west’s financial system. Today it has been the turn of AIG, the insurance behemoth that (unlike Lehman) did get bailed out by the Treasury weeks ago.
In yesterday’s hearing, committee chair Rep. Henry Waxman (D. CA) put up a slide showing how much Fuld has been earning in recent years. Scroll down here to see it.
It shows that in 2007, Fuld earned a “cash bonus” of $4.3 million, on top of his $900,000 “regular” salary. That was down from his all-time high cash bonus: $13.8 million, in 2005. It was also quite separate from his stock options of $40.3 million in 2007 (down from a high of $93.6 million in 2001.) But his stock options are probably not worth anything now.
The cash bonuses and base-salary payments he gets to keep.
These figures are obscene.
The people and institutions that either invested in or loaned money to Lehman will get very little of their money back.
For many of them, this will bring serious harm.
I saw no recognition from Fuld of the harms his actions have caused to others. Nor does he take any responsibility for decisions he made that led to Lehman’s crash. Nor does he offer to do anything to help repair the harms.
It’s as though for him, all the “little people” whom he defrauded don’t count at all.
The WaPo’s Annys Shin reported that

Fuld told lawmakers he hasn’t been sleeping well at all.
“Not that anybody on this committee cares about this, but I wake up every single night thinking what I could have done different,” he said. “This is a pain that will stay with me for the rest of my life.”
But during more than an hour of questioning, Fuld did not admit any specific mistakes. He blamed investors looking to make money from a fall in Lehman’s share price for spreading false rumors that made it harder for Lehman to raise money. That, he said, created a liquidity problem and a crisis of confidence, leading to a run on the bank…
Lawmakers took the opportunity to exorcise taxpayer anger over executive pay, posting Fuld’s compensation since 2000, an estimated total of $484.8 million. Fuld later said it was closer to $350 million.
The panel also took issue with a decision last month by board members to pay three executives a total of $23.2 million for leaving, even as the firm was collapsing, according to committee documents.
Fuld defended Lehman’s pay practices, saying “the system worked” because 85 percent of his pay was in the form of stock, aligning him with shareholder interests.

How’s that again? The system worked?? The proof of that would be that the firm would still be in business, doing the useful work of helping provide financial backing for productive businesses in the real economy while giving a steady (even if sometimes small) return to its shareholders.
Earth to Richard Fuld: The system did not work!!!
Also, just because you got an extra payment in stock options, additional to the millions you took home in cash, that still didn’t “align your interests with those of the shareholders.” You got out of the mess with tens or hundreds of millions of dollars of past cash compensation payments squirreled away. They got out with nothing.
Anyway, the company wasn’t structured as a “partnership” between you and the shareholders. You were their employee, however many (now worthless) stock options you might have been given. As their employee you had a responsibility to safeguard their investment.
The “system”, including that whole quite rotten structure of executive compensation from which you benefitted, did not in any sense “work.”
The financial crisis– and the real-economy crisis that it has already started to cause– is very bad news for the Republicans, on whose watch the vast majority of this mess has occurred. And of course, John McCain must bear some personal responsibility for what has happened. He has been an ardent deregulator for many years; and before that, he showed his sleaziness through his involvement in the “fast money” S&L scandal of the 1980s.
Many Democratic leaders in congress also bear a portion of the blame, as did the Clinton administration in its day. Leading Democrats have taken huge amounts of money from the financial “industry” for far too long. So now those legislators are bobbing and weaving a bit to avoid getting stuck with too much of the blame. I hope that one other big change that’s enacted as next year’s congress and president continue dealing with this crisis is that– finally– they start to enact some serious, hard-hitting campaign finance reform.
Meanwhile, though, let’s continue demanding that these recently failed financiers start to show (and act upon) some real remorse in their communications with the public. Not just a thin form of “regret”, which could mean mainly that they “regret” the fact that they got caught. But a much thicker form of remorse. And a good readiness to engage in some real acts of reparation, too.
One commenter over on this post on Think Progress suggests today, regarding the amazingly lavishly pampered leaders of AIG, that “They should have their ‘homes’ turned into homeless shelters.” That might not be a wholly bad idea, though homeless shelters are not a great longterm solution to the anguish of homelessness.
But maybe those executives’ “homes”– all except the one-each that might actually be called a home with some validity– could be divided into condos at the executives’ expense and given away to foreclosee families by lottery?
The legal basis for such a plan? Well, regarding Lehman Brothers, Annys Shin notes that, “The FBI is investigating whether there was fraud at Lehman Brothers, and the Securities and Exchange Commission is looking into what Lehman disclosed about housing-related investments and how it valued them…. ”
So who knows what’s next for Richard Fuld and his former colleagues?