Suicide Fails the Test of Taking Responsibility: Michael Lewis
Suicide Fails the Test of Taking Responsibility: Michael Lewis
Commentary by Michael Lewis
Jan. 8 (Bloomberg) -- Financial people may or may not be more likely than others to kill themselves after they’ve suffered a reversal, but there’s no question that they enjoy a reputation for doing so.
Disgraced politicians, disbarred lawyers, doctors guilty of malpractice, field-goal kickers who crush the hopes of entire cities. . . none of these people do we half-expect, after they fall, to find some high ledge to jump from. If you work with money you are thought to be, in this one respect, a bit less like any ordinary professional than a jilted lover or a misunderstood artist.
The question naturally arises in the wake of the recent suicides of Adolf Merckle and, especially, Thierry Magon de La Villehuchet. The latter, the 65-year-old head of Access International Advisors, lost millions of his own and even more of other people’s money by placing them with Bernie Madoff. On Dec. 22, even before he could have known for sure how much he had lost, he shut himself in his office, swallowed sleeping pills, and slashed his wrists.
The New York Times quoted Mr. de La Villehuchet’s brother explaining the suicide as a rare act of honor in a dishonorable profession.
“He felt responsible and he felt guilty,” the brother told the Times. “Today, in the financial world, there is no responsibility, no one wants to shoulder the blame.”
This was perhaps understandable; more surprising was when The Times’ reporters heartily echoed this sentiment.
“Mr. de la Villehuchet’s attitude appears to be rare,” they wrote.
“So far, the leading players in Mr. Madoff’s case have maintained a stony silence, studiously avoiding apologies or statements of responsibility.”
Leave to one side the essentially unknowability of Mr. de La Villehuchet’s attitude -- perhaps he was merely distraught at having lost his own money. Consider instead the strange assumption: that suicide is a form of “taking responsibility.”
Suicide can be interpreted in many ways: as honorable, cowardly, sad, tragic, even as a matter of personal choice beyond the reach of moral judgment.
But as a practical matter, after a financier has killed himself, there is no noticeable decline in the sum total of responsibility in need of taking in the financial world. His death fixes no problems, restores no wealth, redresses no harm.
The people whose affairs the financier has disturbed are left in at least as much of a lurch as they were while he lived -- though now, perhaps they feel not only aggrieved by their losses but party to a suicide. Do any of Mr. de La Villehuchet’s clients feel better now? I doubt it.
Just now the financial industry has a big responsibility- taking problem on its hands. Financial professionals have helped to create, out of the clear blue sky, an economic catastrophe. They’ve made vast sums doing things that now can be seen to have had negative social value: misleading giant Wall Street firms; deluding their clients and themselves, allowing themselves to be duped by con men like Bernie Madoff.
No doubt many of them do not wish ever to “shoulder the blame.” Even if they did, how would they go about it?
Begin with what they shouldn’t do: make some great public display of how bad they feel, and how they have now seen the light.
If your response to our economic catastrophe is to go out and shop a memoir or a screenplay or an inspirational lecture series of your spiritual rebirth, you are not taking responsibility. You are merely following the fashion of the moment as slavishly as you did when you sold those mezzanine CDOs.
The world once rewarded you for selling the CDOs; now the world might reward you for saying how much you regret having done so. The odds are pretty good that it’s the incentives, and not you, that have changed. The time to display your sincere disapproval of your own financially idiotic or destructive behavior was back before they fired you, or canceled your next three bonuses.
A better approach might be to accept that it is not easy, or immediately rewarding, to “take responsibility.” Forgoing this year’s bonus might be a start, but even that doesn’t really do the trick.
After John Thain stuck his toe in the water and got it chewed off by piranhas (a bit unfairly, as he really had nothing to do with creating the mess and did a great job saving Merrill Lynch), Wall Street’s top brass seems to have agreed that it is generally not a good idea for them to accept performance bonuses for 2008.
But that doesn’t account for the past five or more years of ill-gotten gains, and the trillions of dollars of economic losses caused by Wall Street’s fantastic misallocation of capital.
The Swiss Bank UBS has come up with a better idea: give some of the money back. The former CEO of UBS, along with some of the bank’s other executives, agreed to re-pay bonuses they received based on the phony profits of the credit bubble. For very senior executives who made hundreds of millions of dollars the act is obviously not merely just but useful, and even cathartic.
Why on earth should Stan O’Neal, Chuck Prince and Jimmy Cayne still be walking around with billions of dollars that they never should have been paid in the first place?
Just Baby Steps
But these are baby steps toward some more general redemption. The vast majority of the people who might feel a desire to take responsibility for their role in our financial catastrophe are out of the public eye and not in a position to give vast sums of money back.
Indeed, that’s partly the point: Most of the money that’s been lost is simply gone.
If you are an ordinary Wall Street person -- an architect of mezzanine CDOs, a rater of securities at Moody’s -- and now wracked by guilt, how might you rid yourself of it? Drive to Washington and explain to the Securities and Exchange Commission the evils of the credit default swap? Teach a free public course about the relationship between financial risk and return?
There’s no obvious answer. It’s not easy for a financier to take responsibility in some meaningful, useful way. On the other hand, it wasn’t easy for him to cause the trouble for which he now needs to take responsibility.
Wall Street Man has exhibited a fantastic ability to dream up solutions to problems, even when the problems don’t exist. Here’s one that does. Any thoughts?
(Michael Lewis, author of “Liar’s Poker,” “Moneyball,” and “The Blind Side,” is a columnist for Bloomberg News. The opinions expressed are his own.)
To contact the writer of this column: Michael Lewis at firstname.lastname@example.org