Daily Archives: January 23, 2009

John Thain: Bring Back the Stocks

The era of responsibility is off to a somewhat rocky start. Yesterday we were engulfed with the Caroline Kennedy U.S. Senate debacle. Did she jump or was she pushed? Is there anyone who will speak to reporters these days on-the-record? No such ambiguity with John Thain, the now defunct CEO of Merrill Lynch (now part of Bank of America and a ward of U.S. taxpayers) and former Wizard of Wall Street. Thain got the pink slip yesterday. Ouch.

But what got me thinking about this again this morning was a post I read by Paul Begala on The Huffington Post. The former Clinton adviser and now CNN commentator opines:

As President Obama ushers in a new era of good feeling, allow me this potentially discordant note. As we finally and belatedly stop torturing people, can we please start humiliating sleazeballs?

Bring back stocks. Not the equities that are tanking on Wall Street; the ancient English punishment wherein a criminal’s head and hands where placed through a piece of wood, immobilizing them.

Bringing back stocks might restore a commodity that’s in even shorter supply than hope: Shame. Let me be clear. I’m not suggesting we put terrorists in stocks. They need to be in prison. But what about those who shamelessly and shamefully ripped off our country, bankrupted our economy and tarnished our national identity? They need to be shamed.

Here’s my proposal: An evildoer, when found guilty of fraud, market manipulation or other crimes like lying about weapons of mass destruction, illegally spying on Americans or outing a covert CIA agent, would be placed in the stocks.

This appeals to me on a number of levels. First this kind of public humiliation would be perfect for Cable TV. So it should attract attention, at least initially. And to add some visual oomph, we could follow the model of Nathaniel Hawthorne and affix a scarlet letter. How about — “D” — for douche bag.

imagesAnd it strikes me that building stocks — every community would need more than one — would be a great part of the president’s economic stimulus plan. Heck. Around Wall Street you might need thousands.

From Begala again:

Can’t you see some Wall Street dirtbag immobilized in Battery Park with a sign explaining that he manipulated derivatives and caused millions of cops and firefighters and teachers to lose their pensions? Given the ingenuity of the free market, someone might even open a rotten tomato stand nearby.

Or here in Washington, the people whose arrogance and incompetence have weakened America and caused so many American troops to fight and kill and bleed and die should, at a minimum, be paraded before the public they betrayed. We could set up stocks in Lafayette Park, across from the White House. Of course, we’d make them wheelchair accessible.

Wussies and wimps would call it cruel and unusual punishment. But stocks were in use when the 8th Amendment was added to the Constitution in 1791. So the Reagan-Bush majority on the Supreme Court, being originalists and textualists, might well uphold stocks. Justice Scalia certainly would. He’s already said so. In an April, 2008 interview, NPR’s Nina Totenberg asked Scalia if stocks would be permitted under the 8th Amendment, since they were in use in 1791. “I would say that may be very stupid,” he told Totenberg, “but it’s not unconstitutional, if indeed it was a punishment that was at that time accepted.”

OK. Now we get to it. Begala asks “who would you like to see in the stocks and why”?

Ah, hum, tough to pick only one. But OK. How about John Thain?

Among other outrages, while Merrill Lynch was crashing it appears that Thain was redecorating his office to the tune of more than $1 million, with features including a $87,000 area rug and a $1,400 “waste can.” There are also some annoying details about some last-minute bonuses and the fact that he may not have been totally forthcoming about the financial situation of Merrill Lynch during and even post merger. Oh well. A billion here. A billion there. (Disclosure here: What’s left of my retirement account is with Merrill Lynch. Think I’ll stop by my “wealth creation adviser’s” office today and check out his rug.)

Thain, like many business and political leaders these days, just doesn’t get it. It’s not his company. He is just a hired employee like everyone else. And investors and fellow employees expect him to do the right thing. So let’s recognize him for his lack of responsibility — and for further undercutting the confidence and trust that has to be restored if we are going to work our way out of this mess.

Give him the scarlet “D” — and bring back the stocks.