His pitch was simple and it struck a chord: ordinary working Americans are being sacrificed
His pitch was simple and it struck a chord: ordinary working Americans are being sacrificed by chief executive officers who care only about the bottom line. Worse, the more they cut, the higher their own rewards seem to rise and the more stratospheric the performance of Wall Street.Mr Buchanan spits bile at Goldman Sachs and Chase Manhattan, claiming they were the ultimate beneficiaries of the taxpayer-guaranteed $50bn bail-out of Mexico by the US government last year. Last month, the telecommunications colossus said that as part of its three-way demerger announced last year, it was to cast away 40,000 of its workers, most of them white-collar managers. Then, last week, we learned that the CEO, Robert Allen, saw his pay package swell by several million dollars last year, thanks to a large dollop of share options. You probably know the joke by now: AT&T stands for Allen and Two Temps.Newsweek emblazoned the headline “Corporate Killers” on a recent cover with mugshots of such corporate chiefs as Allen himself, Louis Gerstner of IBM and Albert Dunlap, formerly of Scott Paper.
There was an esprit de corps – you found out who can take it, and who cannot.”. If an award existed for corporate courage, the winner last week would surely have been Du Pont Co for announcing plans to eliminate 1,500 positions in a bid – oh, my – to boost profits. Didn’t anyone warn the folks down in Delaware not to mention job cuts and profits in the same breath?
Well, of course someone told them, which made them either brave – or daft. There can hardly be anyone left in America who does not know that companies laying off large numbers of workers have become the favourite punch-bags of candidates on the Republican campaign trail. It used to be that it was Moscow and the Reds that they bashed; now it’s AT&T and Goldman Sachs.
Patrick Buchanan started it with his excoriations of big business and Wall Street last month. In true British spirit, Barings brought an element of Dunkirk to Threadneedle Street, he believes.”It brought together a group of people under tremendous pressure.
Most of them look back on it as the most interesting, tremendous period of their life. This certainly falls well short of any commitment to the more radical changes some talk about,” says Mr Foot.Pointing to much closer cooperation with the Securities and Futures Authority since Barings, Mr Foot says a lot can be done without changing the structures “Shuffling brass plates on the door itself does nothing. It is really only Japan that has a structure bringing securities and banking supervision under one roof, and if you want an example of how bad cooperation can be when under one roof then you need look no further than Tokyo.”Furthermore, he argues, “all other countries that brought supervision under one roof tend to have rather small financial markets, such as the Scandinavians. The profits yardstick would have been triggered at some point in 1993 or early 1994, and had we known of the letters of comfort from Barings bank to the various securities operations within the group, it could have triggered the third yardstick quite early on, as well as the large quantities of cash going out in late ‘94,” Mr Foot says.Hardly surprisingly, he is unimpressed by those arguing that the Bank should be stripped of its supervisory responsibilities and left to concentrate on monetary policy. By the time they are finished we will have a clear framework for supervision and clear statements of our risk priorities.”The Bank has already brought into play some of its new yardsticks.
