All We Are Saying Is Give Dick Fuld a Chance: Jonathan Weil
Enough of this going-halfway stuff. It’s time Barack Obama found someone capable of doing something bold to the U.S. economy. And I’ve got a list of candidates who could do it.
The president has a golden opportunity. Larry Summers is leaving soon as director of the National Economic Council, and Obama’s aides are leaking names of possible replacements. Among the luminaries being floated in the press by “people familiar with Obama’s thinking” are Citigroup Chairman Richard Parsons and former Xerox Chief Executive Officer Anne Mulcahy.
There’s much we can learn about the kind of person the president is looking for by studying these two contenders’ credentials. In addition to CEO chops, it seems Obama is seeking someone who also has served on the board of directors of at least one company that either had a massive accounting scandal, blew up so spectacularly that it threatened to take down the global financial system, or both.
Parsons, the former chief at Time Warner, and Mulcahy should have a leg up on the rest of the competition by this standard. That’s because each of them has sat on the boards of multiple such companies.
Long before the government placed Fannie Mae into conservatorship, Parsons and Mulcahy both served as directors at the mortgage-finance company when it was breaking all sorts of accounting rules. For years both were directors at Citigroup, while the bank’s executives drove it to the brink of failure before its bailout.
There’s more, too. Both Xerox and Time Warner settled accounting-fraud allegations by the Securities and Exchange Commission over conduct that occurred while Mulcahy and Parsons held lesser executive posts at those respective companies.
Yet if this is the kind of experience Obama is looking for, he can do better. Why settle for someone who merely oversaw great corporate destructions, when he could recruit a real doer? Someone like:
1. Dick Fuld. Now here’s somebody we could rely on to leave a big mark. Like the size of a meteor crater. I realize Lehman Brothers was the largest bankruptcy in history, and Fuld was its CEO. This is what makes him useful. No matter what he says, people instinctively will think the opposite must be true. If Obama wants us to believe the economy is turning around, all he has to do is get Fuld to say “the best is behind us.”
2. Jimmy Cayne. True, the former Bear Stearns boss managed to sell his firm to JPMorgan Chase in a government-brokered deal for $10 a share. That’s a notch against him, compared with Fuld’s pristine record. In tough times, though, Cayne could be counted on to project calm, provided he’s far from the action, say, at a bridge tournament. He’d make a fine second choice.
3. Stan O’Neal. The former Merrill Lynch CEO, who got a $161.5 million severance package, knows the warm feeling of stimulus and has ice in his veins. He played 20 rounds of golf on four different courses during the last several weeks of the third quarter of 2007, while Merrill lost $8.4 billion on subprime mortgages. His handicap only got better.
4. Angelo Mozilo. Who better to get us out of the housing crisis than the man who did more than almost anyone else to get us in it? Sure, picking the former Countrywide Financial CEO might seem counter intuitive, given how the SEC is suing him for fraud. Yet even if he loses, it’s only a civil case. He’ll still have the most valuable qualification of all: Never convicted.
5. Hank Greenberg. This man has an eye for talent. The former CEO of American International Group, who resigned in 2005 and later paid $15 million to make the SEC go away, hired Joe Cassano to run AIG’s financial products division. Cassano is the guy widely credited with blowing up AIG. Another plus for Greenberg: At 85 years old, he could give Obama a Nixon-in-China moment on the budget deficit by proposing to increase the retirement age for Social Security to 86.
6. “Chainsaw” Al Dunlap. The former Sunbeam CEO, whose company imploded in one of the original “massive accounting scandals” of the 1990s, would be perfect for slashing government spending. Give Dunlap a few minutes, and he’d devise a plan to break up the union, sell off the sand states, and fire half the federal workforce.
7. A tie between former CEOs Rick Wagoner of General Motors, Chuck Prince of Citigroup, Martin Sullivan of AIG, Kerry Killinger of Washington Mutual, and Ken Lewis of Bank of America. Throw in Tony Hayward’s name for kicks, too. Sure, he’s British. But heck, Obama wants diversity. Plus there’s always Robert Rubin, the former Treasury secretary and Citigroup chairman, as a fallback. Too obvious, though. Obama already had Summers. Why reach for his mentor?
What’s important is that the president remembers to think big. Whomever he selects, surely he can do better than Parsons or Mulcahy. They wouldn’t know how to cause a major economic crisis even if they watched others do it first, which they did. Talk about lame.
(Jonathan Weil is a Bloomberg News columnist. The opinions expressed are his own.)
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