PECK: The sins of Wall Street

OP-ED:

As a former brokerage executive and current leadership development professional, I think it’s the height of codependence and negligence for the Fed and Treasury to hold the American people accountable for the sins of failed Wall Street leadership.

Bailouts of AIG, Fannie Mae, Freddie Mac, and who knows who’s next, send the wrong message to current and future offenders: don’t worry, we’ve got your back - we’ll just print more money, and bill the struggling American people. By the way, hire me when I’m done with my federal job, okay? No one will notice.

In fact, as more and more fallen giants plop into the river Styx, rippling and roiling world markets, one would hope it’s a one-way ride. Won’t they who created these conditions be dinner for their Darwin-in-Armani competitors? As a matter of fact, where are the dining-on-ashes crowd? You say they just don’t have the scratch to buy their failing foe? I doubt that’s true. They see the writing on the wall: the Fed will take care of the tab, and we can just watch them flounder. Popcorn, anyone? Well anyway, glad to see Barclays - the brave Brits, don’t you know - is willing to pull up a chair and snap up at least some morsels of Lehman Brothers.

So what have we got? The Tiffanies of federal bailout programs wailing down Wall Street like a welcome wagon on steroids, chanting as they go: “Bring out your botched business plans and failed forays and we’ll take care of you!” What’s the total tab for Bear Stearns, Fannie, Freddie, AIG, and maybe Washington Mutual? It’s in the plundered of billions - oops, I meant hundreds of billions. Now those are subsidies that would make the French blush.

By not letting them fall on their butts on their own, we are enabling a bunch of greed addicts. The Fed and the Treasury are the well-intentioned parents who keep giving the troubled teens more money, thinking maybe “this” time things will be different. Yet, as they say in recovery circles: the definition of insanity is repeating the same behavior, and expecting a different result. It just doesn’t work.

Rather than let the American people foot the bill with more taxes, why don’t we ask the regulators to hit an Al-Anon meeting, where they will learn what friends and families of addicts learn there: it’s going to keep happening unless there are consequences. The greed-grubbing market pumpers must hit bottom, even if there is collateral damage, literally.

Recovery means we must all just say “No!” and decide reckless excess is unacceptable, and get serious about rethinking our values as a nation, not to mention how we regulate Wall Street.

The Fed Feeding Frenzy of 2008 must stop, and we must all do our part to help those pillaged by the greedy leaders of the fallen companies - the employees and the communities they served - not by paying more taxes, but by making sure this doesn’t ever happen again. I would rather face a tremendous world market correction, as has happened in the past, and will happen in the future, than continue this insanity of federal disability insurance for the wealthiest companies in our land.

And by the way, is that $9 million severance package tax exempt, Mr. Outgoing AIG Chairman Don’t worry, it’s on us!

David Peck is an author and a contributor to Business Week online.