Wednesday, October 22, 2008
It occurred to me while following the news over the last couple of weeks, it is time to stop, take a deep breath and think about what we are doing and where we need to go.
For example, no sooner had the ink dried on the federal financial rescue plan when some in Congress could not resist hauling in CEOs to rake them over the coals. Immediately, publicity hungry lawmakers zeroed in on a gathering of AIG executives at a posh California spa one week after the government stepped in and tossed the company an $85 billion lifeline. That made my blood boil, too!
Every major television network was on hand with cameras rolling as the House Committee on Oversight and Government Reform barbequed former AIG CEO Robert Willumstad. The public was left with the indelible impression that our tax dollars paid for a lavish soiree with company executives hoisting glasses of champagne toasting how they hosed us, the taxpayers.
Buried in the news over the following days was the truth. The gathering was a reward for the top producers in one of AIG's life insurance subsidiaries. No top AIG brass attended. Should the AIG "go getters" have by-passed the lavish party? You're darnn tootin' and I suspect that Willumstad would have pulled the plug on it had he not been consumed with trying to keep his company afloat.
I'm not defending CEO behavior or their compensation. Frankly, it is a mystery to me how it is set and measured. That is a matter for the boards of directors and shareholders to decide. But if they are breaking the law, government should lower the boom.
If our private free enterprise system is to prosper, corporate board members and governmental officials need to be held accountable by shareholders and voters. The alternative is worse: more government intervention and control. To avoid that, corporate board members and government leaders need to think about how their actions play in places where people struggle each day to put food on the table.
These days, every politician in Washington, D. C. is rushing to "do something" - anything - to show they're responding to the problem. That's when mistakes are made.
We need to step back and take a breath. When the momentum shifts in a basketball game, great coaches call a timeout and lay out winning strategies and regain control of the game. It is no different with our economy.
Right now, the American people are looking for calm, thoughtful leadership, not hysterics and political finger pointing. They need reassurance that their jobs, 401k programs and savings will be okay in the long-run. They need to know if you take a risk in our nation, you have a reasonable chance to succeed.
So what can our leaders do to change the momentum?
First, they need to quit blaming others. Take a little responsibility for a change.
Second, get the facts right. Rather than grandstanding before hordes of cameras for 10 seconds of fame on the nightly news, gather the facts and chart a course for our future. Don't shoot first and aim later
Third, develop a comprehensive strategy in which we all win. The current state of our country is far beyond a "Democrat" or "Republican" fix. As difficult as that may be in an election year, politicians must realize our problems will not be resolved by lobbing attack ads back and forth. Americans need confidence that people running for office and those in positions of power can work together and restore our economic well-being. This is not a time for business as usual.
No doubt the road ahead over the next few months will be bumpy, but we all have to have patience and the will to fix it. The rules determining how the financial rescue plan will work won't be completed for another four or five weeks. The Treasury Department needs the time to carefully craft those rules so the plan does exactly what it was intended to do and not become a playground for political opportunists and scam artists.
Accomplishing that is the link to restoring our confidence.
Don C. Brunell is president of the Association of Washington Business.