The New York Review of Books arrives somewhat late to my house out here in the provinces, but I see in the Feb. 28 issue that Felix Rohatyn has weighed in on the whole Enron thing. Turns out he’s concerned. His 16-paragraph piece works cautiously through the issues familiar to anyone who’s followed the story casually and concludes that Enron’s meltdown resulted from a failure of ethical standards—”standards that are, in my view, fundamental to the American economic system.”
Hey, that’s my view, too. Of course if you or I tried to get such an unshocking perspective published in the New York Review, we’d be lucky if a junior editor could find the time to write “Duh” on the manuscript and send it back. But what Rohatyn has that we don’t is gravitas. As he notes (twice) in his piece, he’s spent 40 years on the front lines of American capitalism. Plus he’s a statesman, having been (as he points out in his opening paragraphs) ambassador to France from 1997 to 2000.
I don’t really follow Rohatyn’s career, but I was interested to read that during his “nearly four years” as an ambassador, Rohatyn “frequently” gave speeches on the subject of “popular capitalism in America.” Apparently the French had some concerns about possible downsides of popular capitalism, such as “a tolerance for speculation.” Rohatyn says his speeches were designed to “dispel” such worries. Sure, he was “deeply troubled” by “developments” in the markets during those years, but apparently he kept making the speeches anyway, over a period of time that more or less coincides with some of the most excessive speculative behavior the markets have ever seen.
Now, however, he is concerned. He’s concerned about the recent past, including the “relentless publicity campaigns to push the markets higher and higher,” and he’s concerned about other trends he witnessed, in his years (40 of them, I believe) on corporate boards and whatnot, in accounting rigor and in the regulation of derivatives. I think those are very legitimate concerns. They are legitimate now, and they were legitimate from 1997 to 2000, when instead of voicing concerns, Rohatyn was, by his own account, contributing to a “relentless publicity campaign” on behalf of American popular capitalism. Voicing his concerns back then might have been a more helpful employment of his gravitas. In my view.