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COLUMNISTS
TODAY'S STORIES
10.03.2008
Bad Day for Honest Capitalism?


Non-campaign related post (on what else?):

I'm told CNBC's coverage of SpitzerGate is worth watching to see all the Wall Streeters doing victory dances over their nemesis' downfall.  It's an old cliche but the losers here are probably ordinary people.

Along those lines, here's none other than Noam on Spitzer in the NYT from 2005:

Spitzer, of course, isn't simply the beneficiary of this prosecutorial model; he helped create it. The attention surrounding his investigations of Wall Street revealed a popular hunger for taking on corporate fraud. Perhaps more important, the investigations highlighted the appeal of standing up for the ordinary investor - the middle-class person saving for retirement or for a child's education - against entrenched business interests....

Another measure of Spitzer's influence is the virulence of his critics. The Wall Street Journal editorial page, which frequently rails against "the Lord High New York Executioner," has complained that Spitzer "attacks entire businesses and business practices, whether or not he can prove any individual culpability in court." Grover Norquist, the anti-tax activist, views Spitzer as little more than a shakedown artist who extorts settlements from companies under the threat of indictment - more Alabama sheriff than New York prosecutor. This also accurately describes the sentiment in some corners of Wall Street, which could end up funneling tens of millions of dollars toward Spitzer's likely opponent next year, William Weld, the former Massachusetts governor who now lives in New York.

P.S. As the Senator from New York I'm sure Hillary is going to be asked for her response to this. That won't be awkward or anything.

--Michael Crowley

Posted: Monday, March 10, 2008 3:43 PM with 31 comment(s)

Comments

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LISAH said:

Funny, isn't it, how some of the biggest --uh -- moral blowhards kinda stumble in their own muck....?

March 10, 2008 4:08 PM

Rhubarbs said:

Awkward for Hillary? Why? If there's one area where she has unique experience, it's publicly defending powerful men who have been charged with exploiting women and committing crimes. This is probably an easy case for her, actually, since for once she won't be one of the powerful man's victims.

March 10, 2008 4:09 PM

WoodyBombay said:

I dunno - HRC has shrewdly parlayed her "betrayed and victimized by a philandering male" schtick to second place in the Democratic nomination process. This might put her over the top!

March 10, 2008 4:15 PM

sprechs said:

if you want to see real disgusting glee among Spizter's enemies, read the NY Sun.  

March 10, 2008 4:25 PM

waynejm said:

Has David Vitter resigned from the Senate?  Just wondering.

March 10, 2008 5:01 PM

ralphnelle said:

If we're lucky, maybe Spitzer will be Hillary's Mark Foley, i.e., the "open wound" that produces the "excema breakout." It could be just enough to remind voters of the Clinton sexual psycho-drama that gave us Bush in 2000.

March 10, 2008 5:10 PM

teplukhin2you said:

There's certainly a lot more price competition among this crowd than among Wall Street's ho's. Try getting a range of bids on an IPO from any of Wall Street's colluding firms.

March 10, 2008 5:14 PM

teplukhin2you said:

live by the sword, die by the sheath

March 10, 2008 5:25 PM

stgla said:

Are you kidding?  This is pure gold for Hillary. She's going to ask Spitzer's wife to be her running mate.

March 10, 2008 5:38 PM

blackton said:

enough with the gate already, I have a better name for this scandal: Spitzerswallow.

March 10, 2008 5:58 PM

newdex said:

This is tragic.

March 10, 2008 6:18 PM

Wandreycer1 said:

Very sad - he did a magnificent job as AG.  And he went easy on Wall Street, he could have easily closed Merril Lynch with one signature.  He had no desire to do that.  

I still can't believe it.  SAD.

March 10, 2008 6:54 PM

JosephCuomo said:

blackton-

In keeping with the standards of Monica Lewinsky (and her, er, stained blue dress), shouldn't it be SpitzerNotSwallow?

March 10, 2008 6:54 PM

Rhubarbs said:

As much as I think Spitzer needs to resign quickly, I'm with newdex. This is tragic. In the original sense of the word, not in the cheap sense of mere misfortune that we mostly use the word today.

I feel especially sorry for his wife and daughters. What a terrible, public betrayal this is for them.

March 10, 2008 7:01 PM

blackton said:

newdex, rhubarbs, no sorry but I disagree. Cancer is tragic. Random homicide is tragic. A miscarriage at 5 months is tragic. At the end of the day he will still be a multimillionaire, it is fine to feel sorry for his wife and daughters of course, but his wife can get her pound of flesh if she sees fit. As to his daughters it was his actions that led to this.

Certainly there is a large amount of public embarrassment, but as Bill Clinton has also shown, there is a quality of shamelessness that exists now. It will pass soon enough, even for his children. And, in a sense, that is a good thing. They have done nothing wrong.

But between getting nabbed with a hooker, or being mutilated in a far off war by a road side bomb, I will take hooker anyday. No, I save the term tragic for those worthy of it. Feel free to disagree of course.

March 10, 2008 7:29 PM

JosephCuomo said:

I voted for Eliot Spitzer, and was very glad to do so. At the time, he was seen as the one clean, intelligent politician available to us.

Now, here in NYC, everyone I know is shocked.

And, yes, I guess it is tragic, in a way, if you're talking about the traditional definition of tragedy--a hero brought down by a tragic flaw (or moral weakness).

But it also seems a bit silly, especially if you've seen any of the transcripts of Spitzer's conversations with the prostitutes. And, more than that, silly in the sense that here was a man who had everything to gain in terms of his political career--and quite a bit to offer to his constituency--and he literally pissed it all away. . .

The word that comes to mind is Clintonesque.

March 10, 2008 7:42 PM

teplukhin2you said:

A vote for un-tragic. I also feel little sympathy for him. Arrogant AGs wield extraordinary power which can be used to ruin lives, including innocent ones. Talk to Tim Tabor of Goldman about Giuliani. I bet Spitzer took more than a few innocent scalps.

Wonder whether Kristen's employer has mob connections?

March 10, 2008 8:17 PM

Wandreycer1 said:

Wrong on all counts Tep - Spitzer was real public servant about his Wall street investigations.  Can you please name me one innocent Wall Streeter that Spitzer abused his power with?

Check your history on it and tell me he abused anything. I know loads of Wall Streeters and every single one of them respects him and the work he did. He saved Wall Street from itself and took a pittance from them for doing so - when he could have destroyed everything he touched.  

Most of the firms he went after had to pay appx. .0001% of their coffee budget for the real crimes they commited against you and I.  Again:  Spitzer was their friend.  If it wasn't for him. Merrill would still be fighint class action lawsuits and probably out of business for very good reasons.

I'm not saying to feel sorry for him, I'm saying you not do not seem to be very familiar with his record as AG or the details of the cases against the firms he went after  - for very good reason.  

He was exactly what you want in that position.  I thought he'd be a great Gov and I was wrong.  But except for his personality, glib characterisations of him comparing him to other AG's  - especially Guiliani - don't make any sense at all.  

March 10, 2008 8:36 PM

teplukhin2you said:

Fair enough, Wandrey, I'll defer to you on this one. I admit I haven't done much research and know relatively litle about his record. I don't have any agenda here other than a hostility to bullying-- if he's not a bully, then fine, I withdraw my snark. In any case I feel sorry for his family.

fwiw I'd like to see prostitution legalized and also see an end to our prying into politicians' personal lives. Consenting adults etc

March 10, 2008 9:14 PM

JosephCuomo said:

One of the things that people here in NY (on the radio, etc) seem to be obsessing about is this: why didn't Spitzer resign today, instead of presenting that incredibly vague statement that took but one minute for him to say?

People I know here who know people in the know say this: Spitzer is hanging on to his governorship as a bargaining chip, to make certain that there isn't any jail time (or any other serious penalty) attached to his offense.

In other words, the thinking is: Spitzer is going to deal his way out of office, giving up the governorship in return for some clear leniency from the law.

March 10, 2008 9:28 PM

paffoab said:

Wandreycer -

How about Ted Sihpol?  www.forbes.com/.../spitzer-sihpol-piling-on-cx_daa_0708spitzer.html.  This isn't a minor example of Spitzer abusing his power - This was the first trial of a defendant targeted in Spitzer's attempt to criminalize so called "late trading."  Spitzer basically tried to wreck this guy's life, and he bragged that Sihpol was facing potentially 30 years in prison, and emphasized that "This isn't federal time.  This is state time.  State time has a certain edge to it."  Translation - "This guy should beg for mercy because I am going to send him to hell in a state prison, and I'm going to profit politically by doing it."

Fortunately, this was one of the rare cases where the jury didn't just role over for the prosecutors, and Sihpol was acquitted.  But believe me, Spitzer getting hoist by his own petard could not happen to a more deserving guy.

March 10, 2008 10:05 PM

cspencef said:

"I'll resign when that weenie Vitter resigns."

Yeah, wishful thinking.  If only...

March 10, 2008 10:10 PM

jm_rice said:

"Honest Capitalism..."  Isn't that an oxymoron?

March 11, 2008 1:20 AM

tar036 said:

It's hard for me to do this, but I tend to agree with Grover Norquist.  Spitzer protecting ordinary investors?  That is laughable.  Thousands of honest, ordinary people lost their jobs and financial security because he didn't think that certain, long-standing, business practices were right -- note, they weren't illegal, he just didn't like them and wanted to build his name off stopping them.    

I think he got what he deserved.  He made the decision to visit with a prostitute, he built his career "cracking down on supposed corruption", and now he has to suffer the consequences.  

March 11, 2008 8:20 AM

Wandreycer1 said:

paff - I don't have any mercy for Sihpol or his ilk, they almost destroyed our capital markets, no exaggeration.  Without those markets, there is no economy.  I just don't feel sorry for these crooks at all.  Rich guys putting millions of jobs at risk as well - screw em, throw the book at them.  Good for Spitzer, maybe the next batch of amoral crooks would have thought twice if Spitzer had no hesitation in Gitmo-ing them.  These crimes are not small.  Just because a white guy in a suit does it doesn't make it harm free.

Spitzer was a progressive warrior, not too many of those and his demise is ours.  Yep, he was a rottweiler when he wanted to be, no question.  I loved it.  His demise is his own fault and I'm very sad, his wife is such a great woman, a major force here in the city - classy and real.  

I'm not so sure about legalizing prostitution, I haven't thought enough about it.

March 11, 2008 8:27 AM

Wandreycer1 said:

"Thousands of honest, ordinary people lost their jobs and financial security because he didn't think that certain, long-standing, business practices were right -- note, they weren't illegal, he just didn't like them and wanted to build his name off stopping them."

WRONG.  Those people lost their jobs entirely because of the greed of their management.  Spitzer slowed the loss of even more jobs, like I said - he could have easily closed down Merrill - thousands of people did NOT lose their jobs because of that choice.  The management of those firms knew what they were doing was wrong and weakened the markets - and that it was only a matter of time before they were busted.  Place the blame where it belongs.

I'm not defending his hypocrisy by any stretch, I'm defending the work he did in saving our capital markets.  He was magnificient.  

March 11, 2008 8:35 AM

lesserliz said:

Kind of dumb the way he got caught. You'd think an AG would be smarter than that. I'm surprised he didn't send the prosties a 1099 form.

March 11, 2008 8:57 AM

ChanRobt said:

Gloating over Spitzer's fall cannot possibly be inordinate.  

He was an unprincipled, hypocritical zealot.  And he dserved a comeuppance of this sort in true literary, dramatic, and biblical fashion.

The only sympathy possible in this entire affair is for his family.

As for the man himself, thus ever to hypocrites and self-serving zealots who build careers by ruining others.  

At least one can wish.

March 11, 2008 1:36 PM

JosephCuomo said:

This excerpt from Crain's seems to confirm what a source of mine said last night (and which I posted last night on this thread), that Spitzer is using his governorship as a bargaining chip, dealing his way out of office, in return for leniency from the law:

". . .aides to the governor expect him to step down, the New York Times is reporting this morning on its Web site. The only question is when he will do so, not if. It is expected that the resignation will be negotiated with federal prosecutors in an agreement to resolve their criminal investigation of the governor.

"The timing is uncertain because the U.S. Attorney for the Southern District is considering a variety of different charges, the most serious of which pertains to the governor’s alleged attempt to conceal his payments to a costly call-girl service."

March 11, 2008 1:49 PM

ironyroad said:

I think that Spitzer, like FDR, did a magnificent job or rescuing capitalism from and for the orgiastically greedy assholes who populate the upper ranks of a lot of our corporations at the moment.  Of course, he is despised by them.

As someone said about FDR, he was hated by those he'd helped and loved by those who thought he was helping them even when he wasn't.

This event is not a biblical or dramatic comeuppance but one more reminder that Freud is still relevant, despite the number of obituaries on his work that continue to stack up.

March 11, 2008 9:04 PM

lsernoff said:

Tep has a long memory.  Guiliani and Spitzer had some things in common:  they used prosecutorial positions to frighten Wall Street people (not all) into pleading guilty or settling on conduct that had not theretofore been regarded as unlawful, much less criminal.  We have had time to consider Guliani's record and his subsequent career as mayor.  The city and its principal industry are clearly better off for his coming.  Can the same be said for Spitzer?  I doubt it. Neither was a Dewey, who was clearly the role model. Rudy and Spitzer share in common a greater interest in themselves than in their families.  They can schmooze together about the end of their political careers.

March 11, 2008 9:14 PM