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Hearings with no listening

Stephen Tuttle - June 28th, 2010
Befuddled and beleaguered BP CEO Tony Hayward had his day before
Congress. He apologized, he groveled, he’d have probably prostrated
himself before the committee members had he thought of it. Our
elected representatives, ever vigilant, were having none of it. They
blustered and pontificated and bloviated. They were filled to bursting
with self-righteous indignation. Hayward sat and absorbed it all, the
demon being cast out by a nationally televised public exorcism.
We seem to enjoy these spectacles. Some horror befalls our collective
sense of decency, usually as a result of something that genuinely
damages many or all of us, and members of Congress hold public
hearings. The intent of these hearings, at least ostensibly, is to
get to the bottom of said problem and call the rascals responsible to
Congress holds these hearings with some frequency but little success.
We did it during the savings and loan scandals and subsequent
collapse, firing for effect at hapless chief executives who exploited
the quasi-deregulation of their industry until the entire damned thing
collapsed around their feet.
Then we had at the tobacco company executives who comically swore,
under oath, that they did not believe cigarettes were addictive and
they weren’t completely convinced they were even harmful. That one
was especially fun.
Then there were the Wall Street investment house bosses taking their
turn trying to explain why they allowed a handful of employees to
create investment instruments based on sub-prime loans and then
watched the housing market and the investment houses crash and burn.
Ironically, not one of them said, “We did it because it was legal and,
at the time, we were making obscene amounts of money from these
Next came the automobile company executives who spent most of their
time answering questions about why they came to Washington in their
corporate jets and little time explaining why they kept making crummy
cars despite losing tens of billions of dollars.
The poor CEO of Toyota, who understood neither our language nor our
culture, was next in the dock. He tried mightily to explain that all
Toyotas were not careening wildly out of control and that he was
really, really sorry, anyway.
While one assumes there is some purpose to all of this excoriating of
alleged evil doers, the results are decidedly unsatisfying.
Some savings and loan executives were convicted of crimes and served
time. New regulations were put in place that might have been helpful
before-the-fact but did little to help the people who lost their life
savings and saw their lives shattered. This was closing the barn door
after the horse had left, wandered through the pasture, jumped the
fence and was headed to another state. Just a trifle late.
Usually, the CEOs leave feigning chastisement. In a worst-case
scenario they return to a distressed Board of Directors, are summarily
fired and float to Shangri La, or a private Caribbean island of their
choosing, under the benevolent canopy of a golden parachute so
bizarrely generous it would embarrass the robber barons of old.
For the Wall Street and AIG execs it was a terrible reckoning,
indeed. They took their verbal thrashing and walked away with a
gazillion dollars. Their pained expressions of regret could hardly
disguise their soon-to-follow knowing smiles. One assumes they giggled
like a toddler being tickled as they returned to their palatial
offices and decided to which of their several McMansions they’d be
heading on the week-end. “The Hamptons on Friday, dear, or should we
jet to Monte Carlo?”
The point is these highly publicized Congressional hearings accomplish
almost nothing in the bigger scope of things. They are always many,
many days late and billions of dollars of the public’s money short
before it ever even occurs to them to hold the hearings. Sometimes the
companies have to shell out a few billion dollars but rarely enough to
have a real impact on their bottom line. Most of us already know the
cause of the problem long before the first gavel falls and the
mandatory swearing in of witnesses begins.
In the case of BP, the frontline decision-makers opted for speed, to
save a few million bucks, instead of safety. Ironically, it’s quite
likely no laws were broken in the process. The Wall Street twits saw a
way to make huge money and just kept doing it without regard to any
consequence beyond tomorrow’s balance sheet. No matter the scandal,
the cause is almost always the same bad marriage between lax or
non-existent laws and regulations and corporate decision-makers unable
or unwilling to resist the temptation to cut corners to make more
Congress might consider taking a look at the history of these various
catastrophes and do something pro-active instead of being perpetually
reactive. How about some regulations with actual teeth and the resolve
to enforce them? How about some regulatory agencies that actually make
sure the rules and laws are being followed instead of bureaucratic
lapdogs who are, in some cases quite literally, sleeping with those
they are supposed to regulate? How about a Congress that writes laws
that both allow business to flourish, or fail, while at the same time
protecting the public? And wouldn’t it be nice if they would do this
before the next financial or environmental cataclysm arrives?
They hold their hearings to great fanfare and then do almost nothing.
That’s why we’ve stopped listening.

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