Having Fun at Jon Corzine’s Expense

Dear Reader (in particular those readers who complained about the lack of a parenthetical “Dear Reader” gag last week),

Well, I’ve got to catch a plane in a few hours for Florida. The latest National Review Cruise sets sail tomorrow for Ames, Iowa (“I think you really need to look at the itinerary. And a map” — The Couch).

So, like the penile-enhancement surgeon who was terrified of operating on himself said, I think I’m going to keep this short.

 

MF Stands for What Now?

If you’re like me, you think goat cheese tastes like it was scraped off the underside of a corpse, but that’s not important right now. However, if you’re like me, you’re probably also enjoying watching Jon Corzine come undone like the Wicked Witch of the West in a dunking booth (“Market accountability! Look what you’ve done to me! I’m melting . . . “).

There’s been a lot of fun at Corzine’s expense, given that he destroyed his firm by doing exactly the sorts of things he criticized other firms for doing. (See Jon Stewart’s take here.) But I don’t want to have fun at his expense over his hypocrisy. I want to have fun at his expense over an entirely different point.

I’m not one of those fancy-pants numbers guys with consistently demarcated parts in their hair who can explain all the ins and outs of how bond markets work, but I do know that big firms aren’t supposed to lose $600 million. I don’t mean “lose” as in a lost investment. I mean lose as in a stoner and his car keys. From the WSJ:

“Their books are a disaster,” Scott O’Malia, a commissioner at the Commodity Futures Trading Commission, one of the regulators leading a hunt that has stretched 10 days so far, said in an interview. “We’re trying to figure out what numbers are the real numbers.”

Several people who reviewed MF Global’s trading records and balance sheet before or after the New York company filed for Chapter 11 bankruptcy protection Oct. 31 said they saw incomplete transactions, numbers that didn’t seem to add up and other inconsistencies.

“I always knew the records were in shambles, but I didn’t know to what extent,” said Thomas Peterffy, chief executive of Interactive Brokers Group Inc., which had for years considered doing a deal with MF Global. The company walked away from a handshake agreement to rescue MF Global after discrepancies in its books emerged, according to people involved in the discussions.

An executive at another company that considered making a bid for parts of MF Global as it was going downhill said officials at his firm “couldn’t get a good sense of what was on the balance sheet.”

Routine information about assets and positions on MF Global’s books took hours to produce, the executive said. Such information should be accessible instantly, he added.

Now, obviously, it’s an understatement on the order of “Helen Thomas doesn’t have a great chance of making the cover of the next Victoria’s Secret catalog” when I say that plenty of Wall Street firms have made mistakes in the past. So I don’t want to go too far with this.

But I can’t help but note the irony that Corzine’s firm was run like a shady New Jersey bureaucracy, not a lightning-fast hub of global capital. Corzine’s schtick for quite a long time was that he could bring his business and financial expertise to government. It turned out that he brought all of the efficiencies and cleverness of government to business.

This is a point that seems lost on Stewart. He’s mad at Corzine for turning out to be an irresponsible jerk. But the Corzine he liked was the same Corzine he doesn’t like now. And they both sucked.

 

American Horror Story

Like a lot of people this week, I can’t shake the Penn State scandal.

Unless this turns out to be one of those bizarre, entirely fabricated witch-hunt stories like the Amirault case – which I doubt pretty much entirely – I think this is going to get a lot worse before it gets “better.”

Too many things don’t make sense.

For starters, how does the Board of Trustees get blindsided by a story that was in the papers in August? They didn’t even need to read the papers, of course, because there’s no way this was all kept secret, particularly after people started getting dragged in front of a grand jury. How do the trustees find themselves in a situation where they have to fire Joe Paterno at ten o’clock on Tuesday night just days before the last home game? Obviously, boards can be clueless about what’s going on, but this kind of cluelessness had to be cultivated by someone.

A more flummoxing question: Who in the world sees a grown man buggering a child and doesn’t stop it? If fighting words exist, surely fighting deeds must as well.

I’m not going to rehearse all of the arguments everyone’s already heard or made themselves. But the absolute breakdown in decency and responsibility on display in this tale should be a reminder of how normal people can surrender to the perverted and evil logic of complacency.

 

On Corruption

I will admit it’s easy for me to be self-righteous about this. Because of the nature of what I do for a living, I’m not entirely beholden to one employer or institution. I want to stay at National Review for the rest of my life, all things being equal, but if I lost my job here I’d probably land somewhere else. Maybe for less – or more! – money. But I’d be okay. So I am very lucky.

But I’ve tried to put myself in the position of the various witnesses. The “graduate assistant,” Mike McQueary, was a young man at the beginning of his career. So I try to think of myself in, say, 1995 when I had a younger man’s worries about getting ahead. If I saw someone I revered, respected, and feared doing what McQueary says he saw Sandusky doing, I’d like to think I’d grab a fire extinguisher and smash it into his forehead nonetheless. But I can see myself calling my dad for advice, setting up a meeting with someone like Paterno, and working through channels. What I can’t grasp – and pray I would never do – is the possibility that I would just leave it there: “It’s out of my hands now.”

The same goes for the janitors. Again, I’m trying to be open-minded about a situation I’ve never been in myself. Again, I’d like to imagine I’d become a helicopter of fists the second I saw what they saw. But I also understand they don’t have the options I have. They needed their jobs, their pensions. So I can grasp the caution at the outset. But over time, as you saw that nothing was being done, you think through your options. You discover that as a “whistleblower” you’d have protections. And yet you still do nothing? I can’t get my head around it. It would eat at my conscience and, eventually, my soul.

I think part of the answer lies in the rich complexity of corruption. In Hollywood and on the left, corruption has been reduced to a naked transaction of money (and occasionally sex) for services rendered. There’s also the much-discussed and misunderstood corruption that comes with power (I discuss that at length in my next book).

But corruption is so much richer and varied than all that. My father always used to say that the biggest source of corruption isn’t money, but friendship. He’s right. Go offer a newspaper editor or politician $10,000 to hire someone. Most won’t even consider it. But if a friend asks for a favor, the answer is much more likely to be yes. Friends strike bargains with friends, even though they could get a better deal elsewhere. Friends forgive mistakes in business because that’s what friends do.

Not all such transactions are corrupt so much as part and parcel of how civil society works. Besides, because friendship goes both ways, paying a premium for the trust and reliability of such relationships might actually be a good business decision. Which is simply to emphasize the fact that corruption is a very complicated thing, with variables and considerations not immediately apparent to those looking from the outside in. Still, tribal, familial, and social allegiances most certainly can be corrupting, in large ways and small. After all, in many circumstances we’re more likely to lie to our friends than to strangers. “I loved your column!” “I read your book!” “Your daughter’s beautiful!”

Anyway, this is a long way of saying I don’t think there’s any amount of money — nor any job — that would cause me to turn a blind eye to something like this. But I could see it taking more effort and time to do the right thing if it were a friend or a loved one. I told one of my best friends yesterday that if it was him, I’d give him 24 hours to turn himself in or to commit suicide. I’d like to believe that’s true. I know I never want to be put to the test.

 

Happy Veterans Day

I don’t know what to say, except thank you. Fortunately Leon Kass can think of more.

 

Cool Links!

Okay, on to more cheery matters. Decoding the symbolism of movie posters!

A tiger mama gets depressed over losing her cubs. They call in porcine replacements.

Don’t tell the Saudis: Israel enlists owls to catch rats.

The  Pride of Texas (and I’m not talking Rick Perry).

Cracked’s guide to progressive rock.

Herewith my musings on the shortcomings of Walking Dead (fans and zombie aficionados should read it for the comments section alone).

Thanks to my wonderful hosts last week at Furman University and Americans for Prosperity. In case you hadn’t heard, at last week’s AFP event the first three outside speakers were, in order, Mitt Romney, Jonah Goldberg, and Herman Cain. Who wants to sign up for my exploratory committee?

Oh, and lastly, I thought folks might like to know I spoke – via Skype – to a class at Harvard earlier this week about Liberal Fascism, which has been assigned in a course on fascism there. Most of you won’t care, but the right people will be annoyed by that news. More on all that later.

Off to the Caribbean! You can follow me on Twitter while I’m gone. Though I’m not sure I’ll be allowed to live-tweet from the blackjack tables.

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