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Outrage Week in the Capital

[My story in today's paper.]

History will record the third week of March 2009 as Outrage Week in Washington.

The initial outrage outbreak followed revelations of million-dollar bonuses at bailout beneficiary American International Group. Like a spring fever, outrage spread across party lines, and 85 House Republicans joined the Democratic majority in passing a punitive 90 percent tax on the bonuses.

Then came the backlash to the outrage. The sages of Washington warned of mob rule, chaos in the streets. But then some people hollered that not being outraged was itself an outrage.

At the core of all this populist outrage and elite counter-outrage is a mystery: Why now, exactly? Why did the AIG case -- $165 million in bonuses, contractually agreed upon last year -- roil the capital so feverishly after months of the government shoveling tens of billions, hundreds of billions, make that trillions of dollars, to private companies?

It may simply be that, after months of dismaying reports of executives getting fat bonuses, the AIG case was the final tumbler in the lock. This one clicked. And bonuses aren't abstractions: AIG might be a faceless corporation (what does it stand for, again?), but its executives can easily be pictured as they pocket their one, two, four, six million dollars in bonuses -- each.

"Why do they deserve that bonus?" asked David Donaldson, a District sanitation worker, as he emptied garbage cans near the White House on Saturday afternoon.

"We're doing labor," his co-worker Ricardo Brandon said. "We get a bonus, we get, like, 50 cents. Dealing with hazardous materials. Having to fight off rats."

Most people know exactly how much money they get paid, and they know that under no circumstance are they likely to make Wall Street kind of money. And so, from where Daisy Montague's standing, making espresso drinks for $12 an hour at the Baked & Wired coffee shop in Georgetown, the AIG executives should give back not 90 percent but 100 percent.

"What is it they do that's so valuable? And why are we rewarding the people who put us in this crisis we're in now?" the 25-year-old, who has a college degree in theater education, said Saturday morning. "I think those folks are basically stealing from taxpayers such as myself."

Neil Pfortsch, 51, a concrete pump operator working Saturday at a site in downtown Washington, said of the AIG executives, "They ought to put 'em in jail." He said he has seen the value of his 401(k) drop 40 percent over the past year. He wishes he'd gotten out of the stock market a year ago. The AIG executives will take their money, he guesses, "and hide it. Know where to without losing. That's why they're executives."

It was the president himself who began the percussive backbeat of "outrage" last Monday when, after learning of the AIG bonuses, he asked, "How do they justify this outrage?" But the president is not a natural at the language of outrage, and he took heat for not sounding more like Clint Eastwood.

The Obama administration is now in the awkward position of trying to figure out how populist it wants to be. By week's end, it was no longer clear whether the administration and its allies in Congress wanted to partner with troubled financial institutions in an attempt to stabilize them or simply blow them up.

[Click here to keep reading.]

By Joel Achenbach  |  March 22, 2009; 8:32 AM ET
 
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Comments

Foist. Not outraged as much as bitterly bemused.

Posted by: yellojkt | March 22, 2009 9:08 AM | Report abuse

This was an excellent article because it described, with great insight, the outrage without indulging in either denigration or exacerbation.

(And I am really proud of that sentence by the way.)

Anyway, the key question, to me, is if Obama can harness this outrage for something positive or if it will escape his control.

I am reading (well, listening to in my car actually) a book about Gandhi and Churchill. One of the themes is the extreme difficultly Gandhi had with his "non-violent" protests. Gandhi wanted a carefully-modulated form of restrained outrage leading to productive change and spiritual purification. The mob wanted heads on pikes. Guess who won.

Posted by: RD_Padouk | March 22, 2009 9:13 AM | Report abuse

Reposting,

Good morning all, hope everyone is having a good weekend.

Just noticed that Gene's story on the children left in the cars was published in the Toronto Star today - glad to see such a good article getting noticed. I do not recall seeing anyone of his other work in that paper.

Busy weekend here, visiting relatives in from the west, they came to one of the kids hockey games yesterday and then we had an enjoyable supper at home and a delightful visit, off for a family gathering later today.

This week I begin doing yard clean up/perk up for some friends who are in the process of selling there house, a chance to play in the dirt - Yea.

Posted by: dmd2 | March 22, 2009 9:07 AM

Posted by: dmd2 | March 22, 2009 9:15 AM | Report abuse

Maureen Dowd has been milking the outrage for weeks. Like the common people in the article, it's the little numbers that seem to upset her more than the bigger maelstrom. When she hears of executive perks on expensive furnishings or outlandish events, it just drives her nuts. As I suppose it does most of us.

For my commentary on her column today, I've mashed up a poster of The Bonfire of the Vanities which Dowd refers to as 'shafters of the universe'.

http://dowdreport.blogspot.com/2009/03/bonfire-of-bailout.html

Posted by: Mo_MoDo | March 22, 2009 9:16 AM | Report abuse

Good morning. What I wonder is whether this outrage - so well described by Joel - will last, be transformed into a power for good or evil, or simply dissipate into the cultural ether. It sometimes seems that we as a culture have become easily distracted. Even though the economic crisis is affecting people's livelihoods and pocketbooks in a way the Iraq war, say, did not, I wonder if we're capable of sustained outrage.

Oooh - shiny!

Posted by: Ivansmom | March 22, 2009 9:58 AM | Report abuse

Mine! Mine! Mine!

Posted by: Boko999 | March 22, 2009 10:11 AM | Report abuse

I've been reading John Ruskin and am impressed at how relevant this eccentric old-timer is. Here he is talking about how the basic "buy low, sell high" formula for getting rich has some fundamental deficiencies:

=====
Buy in the cheapest market? - yes; but what made your market cheap? Charcoal may be cheap among your roof timbers after a fire, and bricks may be cheap in your streets after an earthquake; but fire and earthquake may not therefore be national benefits. Sell in the dearest? -- yes, truly; but what made yourmaket dear? You sold your bread well to-day: was it to a dying man who gave his last coin for it, and will never need bread more; or to a rich man who to-morrow will buy your farm over your head; or to a soldier on his way to pillage the bank in which you have put your fortune?
============

Here, he explicates the idea that not everything that results in an accumulation of money is necessarily good:

========
One mass of money is the outcome of action which has created, -- another, of action which has annihilated, -- ten times as much in the gathering of it; such and such strong hands have been paralyzed, as if they had been numbed by nightshade: so many strong men's courage broken, so many productive operations hindered; this and the other false direction given to labour, and lying image of prosperity set up, on Dura plains dug into seven-times-heated furnaces(1). That which seems to be wealth may in verity be only the gilded index of far-reaching ruin; a wrecker's handful of coin gleaned from the beach to which he has beguiled an argosy; a camp-follwer's bundle of rags unwrapped from the breasts of goodly soldiers dead; the purchase-pieces of potter's fields, wherein shall be buried together the citizen and the stranger.
===========
(1) The Dura plain is where the golden idol was that Shadrach, Meshach and Abednigo refused to worship, in consequence of which they were thrown into a "fiery furnace." We certainly have our own golden idol(s) in the 21st century. This is a relevant image.

One of the consequences of the real estate bubble here in South Florida is that we have an impressive number of luxury high-rise reseidential and commercial buildings which have never been occupied and, quite likely, never will be. I think that the people who designed them and built them were paid. The developer used borrowed money, and if he's now bankrupt, he's not paying the money back. This is part of the answer to the question, where did all the money go? These buildings were very expensive to build (the bribes alone are surely in the millions!) and there is no market for them at any price, much less at the ridiculous prices the developers projected they would get, when they conceived the idea.

Sorry for the long-winded post. I'd rather think about wild-flowers, frankly.

Posted by: kbertocci | March 22, 2009 10:12 AM | Report abuse

There's even outrage in Mianus:

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/21/AR2009032102239.html

Well, maybe not in Mianus in particular but definitely in the areas around it.

Posted by: yellojkt | March 22, 2009 10:13 AM | Report abuse

Good morning boodle! It seems that now would be the perfect time to launch the _Mob Action Handbook: Angry doesn't have to be ugly_ ,but who has the time? Better to just point people to Ghandi or _The Pushcart War_
http://en.wikipedia.org/wiki/The_Pushcart_War

Front page of the Strib above the fold, a story about a failed "bank" that left a trail of unfinished developments behind it. The outrage against executive bonuses is surely an outlet for the frustration people feel not just with having to bail out foolish borrowers and formerly high flying financial firms-but the sober realization that there is no way to escape this mess.

Whether you believe the companies must be bailed out to save the financial system or they must be allowed to fail because that's the way of the market, your town is going to have to deal with the results of the unfinished and foreclosed. AIG execs have the misfortune of being the Hooker Chemical in this national Love Canal. There are others, including government agencies that are just as, or more, culpable for our toxic financial environment-but "we're not worse than anyone else" is not a motto any person or organization should live by.

Posted by: frostbitten1 | March 22, 2009 10:15 AM | Report abuse

Is it possible in this day and age to have a 'well-modulated form of restrained outrage leading to productive change and spiritual purification'. It always sounds like we think noise equals productive change.

Posted by: --dr-- | March 22, 2009 10:16 AM | Report abuse

Very thought provoking, kb. Where does several trillion dollars go, except to think it was never there in the first place? Perhaps it was all just froth that vanished like the settling foam in a cappuccino. I imagine many of these contractors and tradesman that built these see-through condos never got paid. Their work and effort disappeared into a rabbit hole of unpaid liens.

Posted by: yellojkt | March 22, 2009 10:18 AM | Report abuse

KB, we stand on the shoulders of giants, don't we? Ruskin, Locke, and other political philosophers helped develop our economic thinking....at some point the market glamour overtook these voices of restraint -- indeed, justice.

Posted by: CollegequaParkian | March 22, 2009 10:52 AM | Report abuse

15 cm of snow and still falling fast. Windy. *Not* bluebell weather. But neither does it cause outrage.

Posted by: Yoki | March 22, 2009 10:55 AM | Report abuse

kb and CqP-It all goes back to a reliance on infinite growth doesn't it? We imagine that buying low and selling high results from simply finding that fledgling company that goes on to make great profit. We gloss over the more usual circumstance where lows come after a high-where some lost, perhaps everything. When the losers were easy to loathe speculators, and the workers we didn't know, the outrage was small. We are all losers now.

Posted by: frostbitten1 | March 22, 2009 11:09 AM | Report abuse

Again, the reality and justice and perhaps the inevitability of a

steady state economy, where human development continues richly, but not by the ill-considered GROWTH TRUMPS ALL.

Is the transition easy? No. Painless. No. But we are in a world of pain, now being applied with fierce pinchers to the middle class....may we take this pain as a chance to walk in the shoes of the vast majority of people on our fragile planet.

Posted by: CollegequaParkian | March 22, 2009 11:13 AM | Report abuse

CqP, well said!

Here, doing my part for organic gardening and the local food movement and going to dig up somebody's surplus raspberry bushes and bring them home.

I lived in semi-rural Ohio for so much of my adult life that some MW culture rubbed off. Housewarming or first time in someone's house? Invitation to iced-tea on the back deck treehouse on a Sunday afternoon? Funeral? (D) All of the above. Take a plate of homemade cookies. In this case, chocolate chips.

Have a good day, Al!

Posted by: -dbG- | March 22, 2009 11:23 AM | Report abuse

Um, this plate of cookies is going to the rasp-donors, if that wasn't clear. rmeam

Posted by: -dbG- | March 22, 2009 11:25 AM | Report abuse

mmmmmmmmmm cookies!!!!

Posted by: greenwithenvy | March 22, 2009 11:28 AM | Report abuse

I disagree somewhat with the facile notion that to fret over small fractions in the face of large looting is the usual silliness of the volatile public. I think the public is hip to the idea that to prevent further swindle, there must be punishment of the swindlers. As Pearlstein noted in the Post the other day, "the Justice Department would surely have been within its rights to launch an extensive civil and criminal investigation into whether those bonuses were granted as part of an ongoing conspiracy to defraud shareholders -- a conspiracy in which the traders were knowing participants." But as yet we see no such serious actions taken by Justice. Granted, they may be coming, and I hope prosecutors are taking their time to gather sufficient evidence for guaranteed convictions. And I know Obama has to get Justice reorganized after the evils of the Bush years. Yet still I have an uneasy feeling about this important signal not yet being sent to the malefactors: you - will - atone.

Posted by: Jumper1 | March 22, 2009 11:37 AM | Report abuse

Well, gwe, I'll be at your house for the first time in a week or two. What kind of cookies do you like? I mean, it would be rude of TBG and me to show up without some. :-)

Posted by: -dbG- | March 22, 2009 11:39 AM | Report abuse

A pair of mountain quail just came by. We were sitting in bed having coffee watching the snow fall on the hill behind the house when they flew up on the fence. They went over in the driveway to have some seed. They are so much more classy looking with their swept back double tapering top knots and side bars than the california quail.

Posted by: bh72 | March 22, 2009 11:43 AM | Report abuse

I'm all for changing our growth and money paradigm. Anybody got ideas? Is stability the answer? Is it even possible in human affairs?

What FDR did in the Thirties worked pretty well for 80 years. I suppose we should be glad for that, and try to make equivalent changes now.

Mr. T and I went to Sunday School but skipped church. I had heard the presentation on which the sermon was based a couple of times, and I didn't care to hear it again. It's not warm here today, but the sun is shining, so he and I will work in the yard this afternoon. I think I might also start some of those myriad seeds I've purchased.

I got moonflower seed. What is it one is supposed to do, to make them grow? Soak before sowing? CqP, I'm depending on your advice since I've never tried them before. Mr. T put up a lattice to hang the hosereel on, so now I have a place.

Posted by: slyness | March 22, 2009 11:47 AM | Report abuse

Yeah Jumper, the whole credit swap thing was a semi-criminal enterprise. AIG was selling insurance but they had no means to pay if all the clients made a claim. When they went bankrupt Lehman bros. held 450 billion of CDS yet they had "only" 150 billion in debt to "swap". Where did they think they would get the extra 300 billions if they had to actually swap that 450 billions of debt?
It annoys me to no end that government backed toxic debt sells for 97-98 cents on the dollar (Freddie&Fannie debt) while the private stuff goes for 1-25%.

Yoki, we only had a dusting of snow here but it's cold. It's a cruel joke for the just arrived robins and red-wing black birds.
On the other hand Mrs D. return flight from the Rock scheduled for this morning has been canceled due to snow and freezing rain all around the Gulf. She's taking the next available flight, Tuesday morning. It's a silly country.

Posted by: shrieking_denizen | March 22, 2009 11:57 AM | Report abuse

Any cookie would be great,but probably something that everyone likes.

Posted by: greenwithenvy | March 22, 2009 12:01 PM | Report abuse

Overcast, dampish cold and windy this morning--it's a very Pacific Northwest sort of day.

The trees do smell good, though.

Posted by: Wilbrod_Gnome | March 22, 2009 12:13 PM | Report abuse

My own suspicion is that sustainable growth depends on new and larger energy sources. They have to be clean sources or the despoliation of the ecosystem will negate the benefits. Whether solar, geothermal, wind, tidal, honestly budgeted nuke, even extending to solar satellites if necessary. Of course the obvious point that a mix of all those will probably be best.

Posted by: Jumper1 | March 22, 2009 12:17 PM | Report abuse

Yes, here in the PNW, it's cold and they're talking about snow again...more of an upper-midwest sort of day. I want our weather back!

The wars are a huge drag on the economy, and will be for many years. I never could understand why people were/are not more outraged about the wars, on all sorts of levels, and for all sorts of reasons.

Posted by: seasea1 | March 22, 2009 12:55 PM | Report abuse

Hey! bh, you stop picking on the California quail! They are cute as can be, and look like wind-up toys when they run. The dog and I flushed a pair on our walk just last week.

Posted by: nellie4 | March 22, 2009 1:17 PM | Report abuse

Reposted with permission (see the last line of the reposted comment):

"About my rant…

Joel, I’m sorry I exploded all over your beautiful boodle. I know it doesn’t seem like it, but it was an accident. It looks like that wall’s gonna need a whole lot of spackle and some paint if not a HazMat team and new drywall. Any chance there’s an insurance policy? I can dig around in the sofa/car for some money, have a bake sale, maybe put a donation jar in the bunker…whatever I can to make that right….

Mudge, thank you. Yes, both my original post and my rant were about what I perceived as condescending attitudes. I can move on now.

The Tims, laloomis, I’ll bet the first thing you both thought was ‘thank goodness, for once that lunatic woman isn’t aiming at me.’ I understand.

Cassandra, I know you sat in your home and applauded the fact that I stood up for myself the way I stand up for others, even if I did maybe kinda sorta but not really aim in the wrong direction and even if I went just a smidge overboard. Thanks. Having a cheerleader helps. Even though the pendulum is swinging fully at this stage, hopefully I’ll get to a nice equilibrium. I also know you applaud the forgiving and moving on part. You’re a good influence that way.

bc, it would be great if you can still come do my floors, but I might be hitting up you and RD for some drywall help…

To those of you who have wondered if I’ve really lost it, nah…there’s probably a couple good ones still in me (my guess is they’ll be doozies, make this one look like a walk in the park on a bright sunny day) but I don’t think I’ll go so far as to risk going off the deep end for good. I’ll try to remember that combustible materials are outside toys. And overall, I’m okay.

And S’nuke, you know that scene in And Justice for All where Al Pacino goes in with the cafeteria tray? Something tells me if (when?) I get to that point, you’re going to be Al Pacino. Thank you in advance for liking me enough to save me from myself.

If a new kit gets posted this weekend, can someone please re-post this for me? I’m going to be out of pocket a bunch of the time. Thanks.


Posted by: LostInThought | March 21, 2009 4:27 PM"

In my opinion, one of the wonderful things about the human condition is how an apology makes one stronger, not weaker.

bc

Posted by: -bc- | March 22, 2009 1:21 PM | Report abuse

I guess I should do something stupid now, to lighten it up. Hey, everybody, look at me! Hey! oh oh.. whooops

a
a
ah

SPLASH!

Posted by: Jumper1 | March 22, 2009 1:48 PM | Report abuse

I still subscribe to the theory that AIG got taken to the cleaners by smarter guys than them. If you are at the poker game and you can't tell who the pigeon is, it's you. AIG never saw it coming. They only thought they were the smartest guys in the room. Only we are all paying for their share of the pot.

Posted by: yellojkt | March 22, 2009 1:53 PM | Report abuse

What seems outrageous to me is that most folks do have 401k's.That they do have a retirement plan.

I wonder how many Americans can't think about retirement and just live day to day week to week,month to month.I think if you look at the lower class and the poor americans that struggle each and every week.We could care less whether some Fat cat executive is getting a bonus.That money or those funds will never trickle down to us.

And that is just America,what about the rest of the world and their poverty levels,do they have 401k's? No their main concern is how to feed their families,get good drinking water and decent medical care.Just to survive is a struggle enough.

That is what is Outrageous to me,that we care more about our ownselves while many in America and the rest of the world sruggle to survive,each and every day!!!

Sorry the rant is over.

Off to work.

Posted by: greenwithenvy | March 22, 2009 1:57 PM | Report abuse

It ends the same way:
give it or have it taken;
one way is more fun

Posted by: DNA_Girl | March 22, 2009 2:40 PM | Report abuse

It's called the tipping point.

The silver lining to all of this is that the American people finally get it and are really making changes like growing more of their own veggies and thinking twice before an impulse buy. GOOD. As well as fearing for their childrens' childrens' welfare. NOT GOOD.

I think people are reaching out a bit more, too. In the last 2 weeks I have been in DC (touring AND a funeral...gheesh), Virginia, West Virginia, Maryland, Pittsburgh, Minneapolis and Illinois. People are friendlier. Most of us, save the Wall street fat cats, are in this together.

But I'm tired! No more traveling for a while thank goodness.

I'm sitting here taking a break from studying for my last (I hope) certification exam. Meanwhile the temp here is over 70 F and sunny. My husband just left to hit some bells ('er balls) at a local golf course. And we have crosuses already in bloom. Dafodils are almost crowning. Sadly, little rainfall (but not as bad as Texas, Laloomis).

Anyway, that's my story and I'm sticking to it.

Have a great rest of the day, boodle bunch.

Posted by: Windy3 | March 22, 2009 2:44 PM | Report abuse

Yep, I hear you, gwe. As angry as I am at being laid off after working my *** for many years, I know that I am better off than a lot of folks. It could be worse.

I suppose it's human to care about yourself first, or to be paralyzed with inaction in the face of war or economic meltdowns. You have to do what you can, like Yoki's sparrow. Think globally, act locally. Too bad the deserving don't always reap the rewards, at least, not here. But I guess you have to keep trying.

That's why I hope that we get health care reform, and better education, and an alternative energy policy. That is where our collective outrage should be channelled. Oh, don't forget Medicare and Social Security. Yikes.

Posted by: seasea1 | March 22, 2009 2:46 PM | Report abuse

I think we're getting a sense of the boodle...

The pundits, and others, who complain that Obama should focus on the economy alone and not tackle the other great issues have it all wrong. Now is the time to work toward a humane and affordable health care system, and clean energy, and better schools. We've already proved we won't do it when times are good, maybe, just maybe we'll manage when the only choice is do it or perish.

Posted by: frostbitten1 | March 22, 2009 2:52 PM | Report abuse

I am so sorry for your job loss, Seasea1. It s_cks. Happened to my husband last year. But he found another job within 4 months. Might have taken longer now days. That's one reason I am getting this certification and keep working my tail off. FEAR. But as someone great once said ..."we have nothing to fear but fear itself." I know... Best advice is to stay busy.

Frostbitten...while I agree with you on theory I question how we are gonna pay for all of this. Inflation is gonna get really bad soon. I've been telling my kids to stick with buying tangibles. But agree we must look inward as a nation and take better care of ourselves. We ARE a big village. It seems almost insurmountable but even if it is baby steps it is steps in the correct (didn't wanna say 'right')direction.

Posted by: Windy3 | March 22, 2009 3:02 PM | Report abuse

Also, people are getting more polite. About time!!!

Posted by: Windy3 | March 22, 2009 3:05 PM | Report abuse

It seems to me that the outrage over the AIG bonuses is less about inequity of income and more about the perceived inequity of achievement and reward. And, like many things in life, the outrageousness of this is a matter of perspective.

Posted by: RD_Padouk | March 22, 2009 3:09 PM | Report abuse

Good point, RD. I read today that Bill Gates could pay that $165 mil EVERY DAY for the next 100 years and still have 50% of his fortune left.

It's the principle...and a wake-up call to the average person. Plus it is showing the incompetence of the Congress in obtaining even a semblance of straightening out this mess. The blame game is in full force. As Gene W. was discussing...who has the intellectual courage out there to start really telling it like it is? Then really doing something about it.

Posted by: Windy3 | March 22, 2009 3:15 PM | Report abuse

According to this 2006 NYT article 55% of working Americans had a $)!(k).
http://www.nytimes.com/2006/12/28/business/28scene.html
I like the title.
"Universal 401(k) Accounts Would Bring the Poor Into the Ownership Society"

Posted by: Boko999 | March 22, 2009 3:22 PM | Report abuse

Well, we all certainly got owned.

I think I'm going off to think about something else.

Posted by: Wilbrod_Gnome | March 22, 2009 3:40 PM | Report abuse

I have to repeat that if you have no input into the management and the CEOs hire the very outfits that determine their pay, do we 401K "owners" really "own" any of it?

Posted by: Jumper1 | March 22, 2009 3:44 PM | Report abuse

Sorry for the long submission, but it seems relevant to what you are discussing:

Keeping Psychopaths Out Of Corner Offices

BY NORM ALSTER

INVESTOR'S BUSINESS DAILY

Posted 3/20/2009

Many normal and basically decent people are confused by the relentless headlines detailing massive fraud and reckless management in the financial world.

An FBI official recently told the Senate Judiciary Committee the agency is looking into "hundreds" of cases of corporate and bank fraud. Bernard Madoff somehow conned some of the savviest banks and charities in the world out of $50 billion. The SEC has filed civil charges claiming that R. Allen Stanford defrauded investors of billions.

Is everybody now corrupt? How are such things allowed to occur, many wonder?

A clue may lie with research findings on the psychological profiles of top executives. After several years studying 200 fast-track corporate execs, psychologists Paul Babiak and Robert Hare reached a disturbing conclusion. Many of the same traits found in psychopaths — a personality disorder defined by an absence of guilt or empathy — are especially common among chief executives. Psychopaths make up roughly 1% of the general population. But they are more than three times as likely to be found in the corner office.

"In our group, 3.5% had sufficient psychopathic personality traits that they reached the cutoff for psychopathy," said Babiak. There were seven up-and-comers identified as psychopaths, and all have since fared well in the corporate world. "All of them are at least senior directors reporting to vice presidents. Some are vice presidents," Babiak said.

Because of confidentiality agreements, Babiak can't disclose the names of the companies or managers in the study.

Psycho Detectors

Over the last five years, Babiak and Hare have been working on a screening tool for identifying psychopaths. They hope to have a commercial product by year's end. It will be marketed to corporations doing CEO succession planning.

Of course, all businesses have a vital interest in keeping amoral psychopaths out of management. But it's not easy to do.

Many psychopathic traits are conducive to climbing the corporate ladder. Psychopaths can rob with one hand. But they'll be grinning and patting you on the back with the other. "The psychopath has great social skills. Everybody who meets them the first time really likes them," noted Babiak.

Since psychopaths feel no guilt, they aren't bound by normal ethical constraints. This often lets them excel in environments where performance — regardless of methods — is exalted.

Psychopaths often believe they're born to lead. They would naturally be drawn to the high-stakes world of finance because of the "big rewards and fast pace," Babiak said. They would also gravitate to industries with "a lack of controls."

Posted by: LarryLost | March 22, 2009 4:39 PM | Report abuse

Next part:

Mortgage underwriting during the housing boom, for example, had the elements to be "very attractive for a psychopath," said Babiak. "They are attracted to power and authority and fast money."

With all the rampant fraud and fiduciary neglect in the mortgage, banking and finance industries, it's tempting to label all headline miscreants as psychopaths. But psychopathy requires clinical diagnosis. And sometimes the issues are simply greed and human frailty.

But businesses, more than the general public, have the ability to distinguish the psychopath from the simply shallow and self-absorbed.

Certain traits, for example, leave footprints. Psychopaths are experts at deception and manipulation, notes Babiak. They tend to choose targets to manipulate and will often surround themselves with a circle of admirers.

Circles Of Enablers

"You find a cadre of enablers around a sociopathic CEO," said Tim Mead, a managing partner with the executive search firm Gustin Partners. In executive searches, one warning sign is when the candidate mentions that he'll need to hire several associates or friends for key positions. The prospective CEO who says he needs to bring in his own general counsel and chief risk officer is likely up to no good, says Mead.

Psychopaths are also practiced liars. In reviewing job candidates, companies must carefully check on resume claims. Though inflation of credentials is not uncommon, the true psychopath "will create things out of whole cloth," said Babiak. They will, for example, invent references or claim they worked for a wholly fictional company.

Ethical breakdowns, often instigated by a single psychopath, can devastate companies, says Larry Colero, a management consultant who for many years taught corporate ethics at the University of British Columbia.

Colero argues that corporate boards need to probe more deeply to detect malfeasance. At the very least, he says, boards must quiz management on how ethics are applied within their firms.

Don't Reward Psychopaths

One question that should be asked: Is ethical integrity that has a negative effect on the bottom line rewarded or punished? Colero cites a Columbia University study that found one-third of 1,000 surveyed execs were penalized for refusing to take unethical action.

"It's a matter of incentives and deterrents," said Colero. "History shows that companies not only look the other way when unscrupulous activity is lucrative — they actually reward it. On the other hand, ethical whistle-blowers are most often punished horribly," he added.

Posted by: LarryLost | March 22, 2009 4:46 PM | Report abuse

Thank you, that is an interesting article-- I've heard that before about the sociopath in business, but those new statistics are sobering.

I assume there's no URL you could link to?

Posted by: Wilbrod_Gnome | March 22, 2009 5:26 PM | Report abuse

I think Yellojkt would understand this.

http://www.theonion.com/content/news/obama_disappointed_cabinet_failed

Posted by: Wilbrod_Gnome | March 22, 2009 5:35 PM | Report abuse

I kilt the boodle! Time to get out the sporran patrol.

Posted by: Wilbrod_Gnome | March 22, 2009 6:42 PM | Report abuse

Already posted in its entirety, but here's the link:
http://www.investors.com/editorial/IBDArticles.asp?artsec=24&issue=20090320

Posted by: frostbitten1 | March 22, 2009 6:42 PM | Report abuse

Turns out the death of newspapers is all Dave Barry's fault.

From Clay Shirky at Edge-

"Back in 1993, the Knight-Ridder newspaper chain began investigating piracy of Dave Barry's popular column, which was published by the Miami Herald and syndicated widely. In the course of tracking down the sources of unlicensed distribution, they found many things, including the copying of his column to alt.fan.dave_barry on usenet; a 2000-person strong mailing list also reading pirated versions; and a teenager in the Midwest who was doing some of the copying himself, because he loved Barry's work so much he wanted everybody to be able to read it.

One of the people I was hanging around with online back then was Gordy Thompson, who managed internet services at the New York Times. I remember Thompson saying something to the effect of 'When a 14 year old kid can blow up your business in his spare time, not because he hates you but because he loves you, then you got a problem.' I think about that conversation a lot these days.

The problem newspapers face isn't that they didn't see the internet coming. They not only saw it miles off, they figured out early on that they needed a plan to deal with it,..."
Read the rest here:
http://www.edge.org/3rd_culture/shirky09/shirky09_index.html

Posted by: frostbitten1 | March 22, 2009 7:50 PM | Report abuse

Oh, look -- the President's on "60 Minutes."

Wait, didn't I read most of this in the Post today? Or did I see it on the "Tonight Show"...?

A question: How does History record *anything* of note? Personally, I can't remember what I had for lunch or even recall why I was going down to the basement half the time (Yellow Sticky Note to self: Don't read anything more engaging than a fabric care label between floors). And History's got a lot more on its mind than that; it seems like there's *always* something to Record.

Having said all that, I will be surprised if the AIGumbrage lasts very long. Is there anyone who would benefit if this became a protracted situation? I'm sure the Adiministration, the Treasury, and particularly AIG will want to wrap this up and move on. I think that the story will be brought to some sort of a conclusion, and we'll move on at Internet Speeds to Something Else to fill our bandwith.

Like who's going to win the next American Idol, or how significant public, economic, and industrial impacts there will be if the Administration allows if Chrysler to become a sacrificial lamb for the Domestic Auto industy.

bc

bc

Posted by: -bc- | March 22, 2009 8:55 PM | Report abuse

Not a Conan fan. I have read a few Gor novels, though. Will that get me a cabinet position?

Posted by: yellojkt | March 22, 2009 9:22 PM | Report abuse

There was an interesting article in Angry Bear about the effect the 90% tax on the bailout bonuses is having or may have on the fat cats' willingness to work with the government on future projects, like the Geithner plan to be unveiled tomorrow morning. At first glance the article appears to be a cautionary "beware of letting your outrage get out of hand" kind of thing - but it has a surprise ending. The author, Robert Waldman, thinks outrage is a good thing, at least in this case.
http://angrybear.blogspot.com/2009/03/90-bonus-tax-ties-obamas-hands-hurray.html

Posted by: Wheezy11 | March 22, 2009 9:22 PM | Report abuse

Watching Tropic thunder on dvd so no 60 Minutes here, but the Strib is reporting Obama says the 90% tax is unconstitutional. Implies he won't sign unless Senate passes a significantly different version from the House.

Posted by: frostbitten1 | March 22, 2009 9:33 PM | Report abuse

Thinking of psychopathic CEOs, Mom and I went to see Duplicity, which drew a nearly full house for the theater's weekly $4 for seniors day. Wonderful film that fell afoul of the rating system's abhorrence of Dirty Words, so it has an R rating.

Local production of "Third" a play partly about sterotyping by Wendy Wasserstein had a nice opening night. The English professor at the center of things is near my age and is more than a bit of a stereotype.

On the barrier island, the coralbeans (Erythrina herbacea) are flowering. This deciduous tropical shrub in the pea family has brilliant red flowers evidently intended for hummingbirds. The shrubs freeze to the ground periodically, but they're living in an environment where fires were also inevitable. Coastal Florida isn't a soft, forgiving place.

Posted by: DaveoftheCoonties | March 22, 2009 9:35 PM | Report abuse

Which I should say is how I hoped he'd react.

Posted by: frostbitten1 | March 22, 2009 9:37 PM | Report abuse

"...and we'll move on at Internet Speeds to Something Else to fill our bandwith. bc, 8.55p., 22.3.09.

Like this, totally off kit, because SU played their way into the S16. The sub-Standard sports blogger favours SU over the Sooners:

http://www.syracuse.com/axeman/index.ssf/2009/03/suarizona_state_recap.html

Posted by: -jack- | March 22, 2009 9:39 PM | Report abuse

Dude. I think it's dead.

Posted by: -jack- | March 22, 2009 10:12 PM | Report abuse

3 22 09 17 45.95 112.50

Posted by: laloomis | March 22, 2009 10:22 PM | Report abuse

Slyness, yes, nick the seed of the moonflower. I think you may wait until tax time to do this. I do this on Mother's day, but you are warming down there.

From Dickens, the advice from Mistress Betset Trotwood to Davey C (Trot to her):

“We must meet reverses boldly, and not suffer them to frighten us, my dear. We must learn to act the play out. We must live misfortune down, Trot!”
G-nite.

Posted by: CollegequaParkian | March 22, 2009 10:24 PM | Report abuse

CqP-Had I remembered Davey C was on Masterpiece tonight I would not have wasted the evening with Tropic Thunder.

Toodles boodle and sweet dreams.

Posted by: frostbitten1 | March 22, 2009 10:32 PM | Report abuse

In response to Chris Hanson's investigative reporting "Mortgage Meltdown" on NBC tonight:

http://www.independent.co.uk/news/uk/crime/nine-arrests-over-16340m-mortgage-scam-1642097.html

"It is one of 615 investigations run by City of London officers – the UK's lead force on economic crime – into alleged mortgage fraud. The inquiries are said to involve 10,000 victims and losses run into hundreds of millions of pounds."

How many invstigations stateside for mortgage fraud, as compared to Britain? How many incarcerations stateside for mortgage fraud, and for what periods of time is the punishment? Why does Briain seem to be ahead of the curve?

Who thinks the Senate will pass the House bill calling for 90 percent taxation on the bonuses given to AIG execs? Should we take Conn. AG Blumentahl's numbers and add another $55 million to the total, the oft-reported $165 million, in payout of AIG bonuses? Why didn't Harry Reid read the fine print on the stimulus bill? Should there be a more detailed investigation of the close ties between AIG and Goldman Sachs? What should be done about double-dipping? Should the bonuses be called retention bonuses if employees leave the firm in droves? What has there been zero oversight and accountability of TARP One funds and no money from those funds going toward toxic assets? Who takes the fall for the Geithner-Dodd amendment--Geithner, Dodd, Or Obama? Why doesn't Obama appear a little less on television and a lot more behind closed doors trying to get a handle on the financial crisis? Should the press be taking a much closer look at Geithner's chief of staff, ex-lobbyist Mark Patterson?
What did Geithner know and when did he really know it--was he really oblivious to the e-mails exchanged months ago about the AIG bonuses?

Posted by: laloomis | March 22, 2009 10:43 PM | Report abuse

Will Lassie get help in time?

I'm sorry. I'm not trying to be mean. Just funny.

Posted by: LostInThought | March 22, 2009 10:54 PM | Report abuse

I'll second that emotion.


http://www.youtube.com/watch?v=BOeDEVyUBek

Posted by: -jack- | March 22, 2009 10:54 PM | Report abuse

Will Dudley Doright get Nell off the tracks before the train comes?

Now I really am off to bed. Nice clip Jack.

Posted by: frostbitten1 | March 22, 2009 11:00 PM | Report abuse

What's that you're saying, girl?

Timmy's in the well and he can't get out?

bc

[PS I'm going to get some popcorn -- I love the pure escapism of a good cliffhanger. Or a dozen.]

Posted by: -bc- | March 22, 2009 11:19 PM | Report abuse

I believe this is an old classmate of mine, Erika Harper, who has just been murdered.

I'm so in shock. She was a great, sassy and sweet girl who was trying her best not to succumb to street culture.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/22/AR2009032200731.html?wprss=rss_metro/dc

Posted by: Wilbrod_Gnome | March 22, 2009 11:51 PM | Report abuse

So sad, Wilbrod. My thoughts go to her family and you.

Posted by: Yoki | March 22, 2009 11:58 PM | Report abuse

Oh, Wilbrod, that is very sad. What a shame.

Posted by: seasea1 | March 23, 2009 12:09 AM | Report abuse

Duplicity is PG-13. I remember because some ushers were arguing over it and I double-checked IMDB:

"Rated PG-13 for language and some sexual content."

And by 'sexual conduct' they mean plenty of shots of Julia Roberts' body doubles upper back as she snuggles post-coitly with Clive Owen. No real nudity whatsoever. Sorry ladies, there isn't even a good fanny shot of Clive. It's one of those great caper movies where you have to pay attention the whole time.

Posted by: yellojkt | March 23, 2009 6:01 AM | Report abuse

Wilbrod,
That is a terrible, terrible tragedy. My condolences to you over your friend.

Posted by: yellojkt | March 23, 2009 6:04 AM | Report abuse

God loves us so much more than we can imagine through Him that died for all, Jesus Christ.

Morning, friends. Please read the article under Health, the one where there is discussion of mentally ill folks in nursing homes. The situation isn't good for the elderly living there. The suggestion in this news piece is that the mentally ill should be housed in apartments. Wrong answer. We're dealing with that situation here, and it is not good. Not good for the tenants, but especially not good for the mentally ill person.

gwe, I think every decison that is made by corporations and business people alike impacts the poor of the world, and because sometimes we don't see it up close and personal, we move on, never thinking about that impact or even if there is one. Sadly, I fall into that category you were talking about, living from day to day, or rather in my case, month to month. I don't say that to make anyone here feel bad, just stating a fact. It has become a lifetime habit. I was taught as a child how to take two pieces of meat and make a meal for many. Of course, it wasn't always healthy, but it was filling. I was a teenager before I used an indoor bathroom at home. Yet I graduated from high school, and during that time, it was almost unheard of for girls. My mother, bless her heart, was determined, and did not take any stuff when it came to school work. A good way to get on her wrong side was to come home with a failing grade or a low grade on the report card. You literally put your life in your hands doing that. And if a teacher sent a note home about behavior, you were dead in the water.

Yoki, Slyness, Martooni, Scotty, Mudge, and all the gang, have a wonderful day. The g-girl is here, and we have to get ready for school. *waving*

Posted by: cmyth4u | March 23, 2009 6:38 AM | Report abuse

Morning Al!

Fly by Hi!

Posted by: russianthistle | March 23, 2009 7:00 AM | Report abuse

Happy Monday, all. I hope it will be a good day for everybody, including Al.

Your mother had the right idea, Cassandra. Would that all parents were as intent on their children getting a decent education. Think of the possibilities!

Anybody see this yesterday?

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/20/AR2009032001779.html

It scares me to be in agreement with anybody at AEI, but this made sense to me. I do NOT wish for us to be like Europe.

Posted by: slyness | March 23, 2009 7:12 AM | Report abuse

Good morning, Boodle. Cassandra, Al.

You should see the snow banks after the big blizzard of '09! Please send daffodils.

Have a great Monday.

Posted by: Yoki | March 23, 2009 7:41 AM | Report abuse

Morning Al!

Incredibly bright start to the day -- I'd pull the blinds if my cube faced the window. Now if my brain could only match that intensity.

I wonder if I should apologize to the starlings that wanted to nest in the roof of my porch -- spent a good deal of yesterday morning applying chicken wire to the "new" openings on the underside of the roof.

*possibly-properly-caffeinated-for-the-upcoming-work-week Grover waves* :-)

Posted by: Scottynuke | March 23, 2009 7:56 AM | Report abuse

Saw the pictures on CBC yesterday Yoki, hope it melts soon. Our western relatives kept commenting yesterday that they were glad just to be out of the snow - they are just north and east of you a few hours.

Wilbrod, so very sorry to hear the news of your classmate.

Morning all, another nice sunny morning here, cold but lovely. One of the mourning doves has established a nest in the pergola about our patio door, my outrage level is very low right now, in part due to the nice weather we have been having and the ability to go look at the lovely gentle creature sitting so calmly in her nest. Plus even if I get outraged it is rather pointless, solutions not outrage are required.

I can do little but try to support companies that have philosophies I believe in.

Posted by: dmd2 | March 23, 2009 7:58 AM | Report abuse

It's a wonderful morning for a walk, cool enough to require the heavy coat and gloves but warm enough to see spring everywhere. The cherry trees, redbuds, and forsythia are in full bloom. Daffodils riot in yards all over the neighborhood, I hope in protest of the weeds that are also springing up.

When Elderdottir was small, she called the cherries snow trees. An apt description.

CqP, thanks for the advice on moonflowers. I will follow it and let you know how they do. No morning glories here, I've pulled enough morning glory weeds in my time that if I had a nicket for each, I'd be richer than Bill Gates.

Posted by: slyness | March 23, 2009 8:52 AM | Report abuse

'morning all. What have you done to deserve that weather Yoki? I've just looked at your forecast for the week. It's a good one for February, if you like skiing.
It snows again in Newfoundland today and some more forecasted for tomorrow. Hopefully not enough to cancel all flights once abgain. Mrs. D isn't a drinker so she founds there is very little to do in St-John's on a Sunday...

Posted by: shrieking_denizen | March 23, 2009 8:52 AM | Report abuse

Since Mrs. D is not a drinker I guess my advice to go have fun on George St. in St. John's wouldn't help - unless she really likes music. I believe the street is named St. George, my father used to claim that he had the best Lobster bisque in his life in St. John but can't recall the name of the restaurant he used to go to, he would go at least once on every trip.

Slyness, here is another article on remaking conservatism in the US, Frum vs. Limbaugh. I am not a big Frum fan but he certainly makes much more sense than Limbaugh.

http://www.theglobeandmail.com/servlet/story/RTGAM.20090322.wibbitson22/BNStory/International/home

Posted by: dmd2 | March 23, 2009 9:05 AM | Report abuse

This outrage seems to be a densely packed moment in time. Seems like that it is THE topic on which everyone spent the last 4 days.

For the most part, I missed it.

I still would note, with what little I know, I did read and hear that the those "formerly known as conservatives" are busy mis-representing how the majority feel and why. Indeed, also mis-representing the words coming from the Democratic Leadership.

The average folks don't even know that most corporations are drop millions PER YEAR into their executives retirement accounts. In the past three or four years, a good 10% of American workers, if I remember correctly, lost their pensions all together.

I find it somewhat interesting that the MegaMillions Lottery Jackpot that represents to wildest dream come true of millions of Americans each week is no bigger a payoff than what some Corporate leaders take home each year. (exclusive of the before mentioned retirement packages and golden parachutes).

Posted by: russianthistle | March 23, 2009 9:07 AM | Report abuse

Slyness-are you sure it was morning glory and not bindweed you were pulling? I ask because Mr. F has an unreasonable distaste for morning glory, which can be a weed in southern climes where there is no frost-but that doesn't apply to the part of California where he grew up. It was bindweed he was pulling, but everyone called it morning glory. I found morning glory reseeded quite freely in the Fayetteville, NC area but was easy to keep in bounds.

Posted by: frostbitten1 | March 23, 2009 9:08 AM | Report abuse

Beyond the obvious text editor issues, I am somewhat concerned about Nell's safety.

Posted by: russianthistle | March 23, 2009 9:11 AM | Report abuse

E.J.Dionne says, more clearly, what I've been trying to say about the "Obama shouldn't be spending time on side issues" "congress already has too much to deal with" crowd. Here's the money graf:

"And that's the beauty of this critique. It's far easier to talk about an overloaded system than to tell those without health insurance that they will have to wait a few more years, or to be honest in saying that balancing the budget long-term will require raising taxes. It's much easier to use the economic crisis as an excuse for inaction than to defend the status quo."

Posted by: frostbitten1 | March 23, 2009 9:17 AM | Report abuse

Wow! Huge news on my turf:

http://www.theglobeandmail.com/servlet/story/RTGAM.20090323.wpetrocan0323/BNStory/energy/home

Posted by: Yoki | March 23, 2009 9:20 AM | Report abuse

Home page menu bar is golden again... *SIGH*

Posted by: Scottynuke | March 23, 2009 9:20 AM | Report abuse

Wilbrod, that news article is horrible, my condolences to you and her family. :-(

Posted by: Scottynuke | March 23, 2009 9:24 AM | Report abuse

A very quick drive-by before I head off to Dulles to pick up a friend. Been up since 5, so I'm flagging a bit, and I have to get the first draft of a pleading to "da boss" by tonight. I figure I'm halfway through or more.

I was looking at the Today Show this morning over my Wheat Chex and finally reached for the remote to turn the whole dang TV off. I had watched the 60 Minutes interview of Obama and the Today Show showed the snippet of him laughing, and Today was overtly implying that he was essentially making fun of the whole economic situation. WTF???? What idiots the MSM can be -- or at least the "infotainment" people over at GE-NBC. I mean, I saw the interview -- I wonder if they did, other than to cherry-pick little soundbites.

Okay, that's it. Gotta stay fresh for the drive. Have good days/nights (depending on your respective time zones).

Posted by: firsttimeblogger | March 23, 2009 9:25 AM | Report abuse

Frosti, I looked up bindweed and I've seen that, but morning glory is the weed that I've pulled in every yard I've been responsible for since my mother's house on the farm.

There had been a tenant house on the portion of the farm that my mother inherited, but it had burned. The garden there was fertile in the extreme, especially with weeds and broken glass. Because of that garden, I am intimitely familiar with morning glories.

Posted by: slyness | March 23, 2009 9:28 AM | Report abuse

Slyness-sigh, hard to see a good gardener put off morning glories, but I understand.

Posted by: frostbitten1 | March 23, 2009 9:39 AM | Report abuse

I've been thinking a bit about outrage, the blogosphere, and the whole notion of information overload.

Now I am all for being an informed citizen and all, especially when casting a ballot. And citizen oversight is certainly important.

But I think, at some level, an obsession with the minutia of current events actually becomes a form of narcissism. It isn't healthy.

Now, I am susceptible to this as much as anyone. Fixating on the news can fool me into believing I am vastly more important than I am. But the truth is, the events of the world are largely immune to my opinions and, certainly, my outrage.

Life is short. The days are numbered. I think it is important to get out there and find some bliss before we die.

The world will find a way to muddle through.

Posted by: RD_Padouk | March 23, 2009 9:58 AM | Report abuse

Did a morning walk at the beach, which is windy and has some surf. Walking in the wave swash zone was probably more useful than doing a stair-climber machine at the gym.

Posted by: DaveoftheCoonties | March 23, 2009 10:09 AM | Report abuse

Probably had a far more palatable aroma too, DotC...

Posted by: Scottynuke | March 23, 2009 10:14 AM | Report abuse

New Kit!

Posted by: Yoki | March 23, 2009 10:19 AM | Report abuse

I think the outrage of the people and Congress is understandable, even if there's not much we can do about it without punishing ourselves worse than we punish the "Masters of the Universe." These guys always made their money essentially out of transaction fees, skimming some cash from the flow of money back and forth. In order to do that, transactions have to happen; money has to flow. Thus, even though the amount actually taken by the MotU's is relatively small, the huge transaction that enables them to take it may be entirely a swindle. If you induce me to throw away $100 through your fast-talking, I am out $100 even if the portion that you take for yourself is only $1. The remaining $99 goes to something I apparently don't need or which the recipient can't really supply me, and apparently doesn't help its recipients all that much -- more than likely, they have already been talked into committing that $99 to another project, from which the MotU's will take another $1.

Posted by: ScienceTim | March 23, 2009 10:28 AM | Report abuse

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