Anger Management, the Abe Lincoln Way

"My dream is of a place and a time where America will once again be seen as the last best hope on earth," Abraham Lincoln, 16th President of the United States

Like the rest of the banking industry, I have watched recent events in America with quiet resignation. My industry deserves to be punished for the greed, irresponsibility and poor judgement that marked the years leading up to this financial crisis. To be sure, I can name a few co-conspirators. But never mind that. This crisis needs its dastardly villian and the banker is a worthy choice. But in America's rush to punish the bad guys, mob rule is taking hold. As is often the case with mobs, the urge to punish, and to do so harshly, is overwhelming society's responsibility to set criteria for deciding who the bad guy is. In the America I know and love, even the bad guy gets a chance to tell his story. So while I never intended this blog to be a forum for rants, I feel I can no longer sit by passively as the mob takes over. I want to tell my story, even if most people reading it already know it.

I grew up in Scranton, the quintissential small US town. It is middle to lower income. It is a region poplulated with 3rd and 4th generation immigrants - mainly catholic and European, especially Irish and Italian (I have a little of both in me, along with a dash of Polish). While Scrantonians are under-represented at US universities, I am pretty sure there are many who served in Iraq and Afghanistan. It has always been that way. My father served in the army and my uncle died a marine, on his way home from Vietnam. I never met him. American flags have always been proudly raised outside of Scranton homes - even more so after September 11, 2001.

When you visit Scranton, you get the sense that time has passed it by. Its "boom" days were many years ago, when the region supplied the country with the coal to power its industry. My grandfathers both worked with the mining companies. As they died young, I never met them either. In recent years, Scranton has tried to reinvent itself, with only modest success. First it attempted a period as a defense contractor. But the cuts to the defense industry during the Clinton years put an end to that. Then it had a go at call centers. But it is much cheaper to set up those centers in India. These days, Scranton is having its 15 minutes of fame, as the setting for the US version of The Office. The show originated here in England, in a town called Slough - not too different from Scranton, actually.

I grew up in one of those lower-middle class, flag-flying homes. Neither of my parents went to college, but three of their four children did. I paid my way through my undergraduate degree on scholarship grants, student loans and nearly full-time work. The loans I proudly paid off on time. I remember beginning my working life by driving my new Honda Civic (another loan taken and paid) to New Jersey carrying everything I owned. I had $6000 to my name. I worked my way up the corporate ladder the hard way. I wasn't part of a graduate program. I began at the bottom - doing menial jobs, putting in twelve hour days and earning a graduate degree at night. With a little luck and a lot of patience, I landed a job beyond my boyhood dreams: world travel; manic, unpredictable days on a buzzing trading floor; and the chance to play a pivotal role in growing, multi-million dollar business.

As part of my job, I moved to London with Dina in January 2003. It was a difficult time to be an American overseas. The goodwill the world had extended the US after September 11, an event I witnessed from across the street in my New York City office, was fading fast. The Bush Administration was about the launch its ill-fated, highly unpopular war in Iraq. One of our first memories in London was walking out of our home and into a sea of muslim humanity. Not 100 yards from our front door we were witnessing our first war protest. Soon after, we visited Belgium and had to resort to pretending to be Spanish. Thankfully, Dina partially speaks the language (I just stared and tried to look stupid, which has never been hard for me). And while we sympathized with many of the frustrations that Europeans had with George Bush and his policies, throughout those trying days, we remained proud Americans.

I often say that my story is what the small-town American dream is all about. With a lot of hard work, a little luck and a set of strong values, you can accomplish nearly anything. And I did. It just so happens that my dream was built around the business of banking. And while many in America will have me hold my head down, that is one thing I will not do. To this day I remain proud of everything I have acheived. Yes, I am a banker. But I don't run a ponzi scheme, or sell mortgages to households that can't afford them. And I can't price a complex derivative to save my life. I simply look at market prices and economic trends and advise clients on whether currencies will go up or down. Yes, I have made a decent living at it. But I have always performed my job with honesty and integrity - just as I was taught to do as a boy in Scranton.

So while I am not asking for sympathy, I do want to be heard. My warning to the mob is beware of the law of unintended consequences. Congress is set to vote on a bill that will tax most Wall Street bonuses at 90%. While this will make the mob feel better, the bill does come with consequences. For one thing, most of those dastardly villians the public wants to punish are in jail, on their way to jail, retired or looking for jobs in parts of the industry that no longer exist. Many that are left are like me: hard-working Americans whose luck is running out. Many of them have paid dearly for this crisis already. Barney Frank has suggested that Wall Street executives do not lose anything when their firms fail. I wonder whether he ever read the details of Lehman Brother's employee stock ownership program.

Meanwhile, part of the bill up for vote is a retroactive tax on money already paid to bankers. While this is not technically an unravelling of one of America's great strengths - respect for the binding contract -it is pretty damn close. Do we really want to go down that slippery slope in an effort to recoup $165 million from AIG employees? I sure don't, at least not for the equivalent of 1/1000th of annual American GDP. The payments of bonuses to AIG employees is an outrage. But they are based on contracts written before this crisis took hold. Unless the government is willing to let AIG fail, it should pay the contracts or hope the money is returned by choice.

Most importantly, if we are ever going to get out of this mess, main street needs to come to terms with the fact that it needs a healthy Wall Street. Watching last week's circus in Washington, I couldn't help thinking the country was snatching defeat from the arms of victory. An unprecedented amount of policies have been put in place to fix the American economy. And believe it or not, there are some signs the economy is finding a bottom. But there are two consequences of this bill, perhaps unintended, but almost certainly assured. First, Wall Street will focus far more on paying back the government money than it will lending to credit-worthy Americans. Second, the pool of talented bankers that remains will seek the relative saftey of foreign banks. I suspect the stock market realized this when it reversed course and started falling again at the end of this week.

As an avid reader of history, one of my true heros is Abraham Lincoln. A little story about him comes to mind. In a fit of anger, Lincoln wrote a letter to his young, impetuous and incompetent general, George B. McClellan. He then sealed the letter in an envelope and placed it in his desk drawer. He opened it a few days later when his anger had receded, to read it one last time. That letter was never sent. On the eve of the Senate vote, my hope is this bill - drafted in a fit of anger - is put in a desk drawer to be opened on another day. There is plenty of time to punish the arsonists. Right now, we need to put out the fire.

A Scranton Boy in Chelsea

P.S. For my dozen or so loyal readers, I want to thank you for your patience and understanding. I promise the next blog will get back to the most important things in my life: Dina, the boys and our lives in London.