Eliot Spitzer may be gone, but Wall Street remains guilty without a hearing, and why Bear Stearns had to die.
When the bad news about Bear Stearns hit the market several Fridays back, it stole the media's attention from the story that had dominated the earlier part of the week: the fall of call-girl patronizer Eliot Spitzer. Wall Street figured prominently in that story, of course, if only for the schadenfreude it was reportedly experiencing as a result of Spitzer's troubles. Indeed, reports chronicling this schadenfreude were so prevalent that by the end of the week -- right before Bear imploded -- stories chiding Wall Street for its chortling began to appear. The prime example: Daniel Gross's brilliantly headlined, if less brilliantly argued, "Spitzenfreude."
Gross is irked that Wall Street sees Spitzer's fall as a vindication of those he investigated (though the only "Wall Streeter" he quotes expressing anything close to vindication is Friend-of-Dick-Grasso Ken Langone). And he's further irked by those who continue to complain that Spitzer never took any of the firms he hounded to court: "Just as Spitzer didn't need an indictment and a trial by a jury of his peers to know that his conduct was unacceptable and incompatible with holding a position of public trust, the subjects of most of Spitzer's investigations didn't need a grand jury and lengthy court proceedings to know they had been caught in flagrante delicto," he wrote, adding later: "Spitzer didn't take these cases to trial because he didn't need to. The paper trail, the e-mails, and the trading records spoke for themselves."
In other words, who needs courts of law? If you have compelling evidence, just release it to the media and let the public decide guilt or innocence. We all know Wall Street is evil, anyway. Why waste time in court trying to prove it? Extract a settlement and run.
In fact, don't even question the conventional wisdom. Kimberley Strassel wrote a Wall Street Journal op-ed piece on Spitzer's complicated relationship with the press -- the leaking, his deification -- and got hammered by both Slate's Jack Shafer and the Columbia Journalism Review's "The Audit," which dubbed it "another baseless screed."
Call it the American Idol School of Justice; popular vote rules. It's hard to imagine Gross, or any other sane columnist, arguing that other types of cases -- murder, robbery, whatever -- don't require a judicial process because the evidence "speaks for itself." Hey, we've got the bloody knife; why bother with that whole grand jury thing? (Although we guess a form of this is what's happening on Dateline NBC's gotcha-happy To Catch a Predator series, but that's another story.) But Wall Street is different.
Well, it must have come as a relief to many in the media when they could leave a disgraced Spitzer and embrace something a bit more, at least in its eyes, black and white -- Bear Stearns Cos. The media, predictably enough, declared open season on the firm after news broke that the Federal Reserve and J.P. Morgan Chase & Co. would bail out Bear.
Gretchen Morgenson of The New York Times, naturally, led the charge. "But why save Bear Stearns?" she demanded. "The beneficiary of this bailout, remember, has often operated in the gray areas of Wall Street and with an aggressive, brass-knuckles approach." In other words, Bear deserves to die. Never mind what that might mean for the economy. Never mind the legality. Die.
Morgenson was quickly cheered. The Audit wasted no time in rewarding her a "credit" for "putting the odious Bear Stearns in perspective." Yes, odious. CJR also declared that Bear CEO Alan Schwartz "lied about" the firm's cash problems "until it was impossible to keep lying," as though it knew.
And over on his blog, New Republic editor Marty Peretz directed readers to Morgenson's piece and expressed hope that Bear's CEO -- it was unclear whether he meant Schwartz or Jimmy Cayne -- be indicted for, well, something.
None of this is surprising, of course. There's nothing like an apparent "bailout," to get the media's blood pumping. And Bear Stearns, never exactly home of saints, is an easy target, thanks to everything from collapsed hedge funds to the A.R. Baron scandal to the bridge-playing, pot-smoking, golfing Cayne. Maybe Peretz's hope will be answered and Schwartz, Cayne and others will be indicted for something. After all, the media's already made its judgment. And that's all that matters.