Commentary: Ambiguity cuts both ways in sports and finance
This article first appeared in the St. Louis Beacon, Feb. 12, 2009 - A wag once described ambiguity as the feeling you get while watching your mother-in-law drive off a cliff in your new car. Perhaps a better -- or, at least, more politically correct -- example might be the sentiments of a St. Louis football fan watching Super Bowl XLIII.
Here you had the impossible-not-to-like Rams' legend, Kurt Warner, leading Bill Bidwill's desert rats on a quest for a world championship. If Kurt pulls it off, he's a lock for the Hall of Fame but the Lombardi Trophy goes to Bidwill - the guy who not only made off with the team you grew up with but then voted against the city's effort to replace the franchise he'd taken from it. For the hero to triumph, the villain must prosper. What's wrong with this picture?
In the end, things worked out about as well as could be expected. Kurt posted stellar stats and rallied his team from a 13-point fourth quarter deficit to take the lead, only to see the last minute heroics of Ben Roethlisberger and Santonio Holmes rob Bidwill of his prize. Rarely does life resolve a painful dilemma in such humane fashion...
Of course, ambiguity is hardly limited to athletics. In fact, the signature appeal of spectator sports is their general clarity. The fan's team is composed of heroic figures engaged in a titanic struggle of no practical consequence. If they win, the viewer is vicariously triumphant; if they lose, turn the channel. The experience is thus a relief from the real world where issues tend to be a good deal more complex.
The Associated Press reports that Wells Fargo & Co. recently cancelled a scheduled 12-day junket to Las Vegas for its best-performing employees and their guests. The firm had just received $25 billion in federal bailout money, and it was seen as a bad public relations move to have top executives cavorting poolside while stressed-out taxpayers who can't afford to go to the movies lend them money to continue doing business as usual.
Indeed, some of the abuses of the initial bailout payments are unambiguously outrageous. According to The Wall Street Journal, the five biggest Wall Street securities firms lost a combined $25.3 billion last year. Yet, these same firms paid out a collective $26 billion in executive bonuses for 2008. Had they limited executive compensation to base salaries, the firms could have recorded a collective $700 million profit.
This sort of behavior is ridiculously irresponsible. To the extent that it involves the possible misuse of public money and the certain betrayal of investor trust, it could -- or at least, should -- be criminal. $26 billion to reward the geniuses who managed to post record losses while driving their respective firms to the brink of bankruptcy? Madness.
But the Las Vegas situation is less clear. While Wells Fargo's corporate austerity may be morally satisfying, its practical impact is probably not real popular with workers on the Strip.
The economy of Las Vegas, like that of the rest of the country, is mired in recession. The 1,000+ people who were slated for two weeks of merry-making there at the company's expense could have provided a genuine boost to the local business community and the employees it supports. Instead, the card dealers, bartenders, bell hops and strippers who rely on tourism to feed their families will suffer further financial privation thanks to fiscal responsibility.
The question thus becomes whether we, as a nation, can afford thrift. With widespread penury looming, at least the irony here is rich.
During the 2004 presidential campaign, John Kerry tried, in his own stumbling manner, to offer nuanced answers to complex questions. Then-President Bush responded by labeling him a "flip-flopper." Under Mr. Bush's clear-eyed, man-of-action style of leadership, the $330 billion budget surplus he inherited was converted into the $1.2 trillion deficit he left his successor. That's a net loss of 1,530,000 million dollars in the annual budget.
Presently, President Obama and his chief economic advisers are pushing for a massive stimulus package to spur us out of the recession. Congressional Republicans and right-wing talk show hosts are livid, howling about the need for fiscal discipline. Their protests might be taken more seriously were they not the self-same people who marched in uniform lock-step behind Mr. Bush while he drove the national economy off a cliff with his mother-in-law and the rest of us along for the ride.
Meanwhile, former genius Alan Greenspan, who headed the Federal Reserve for approximately 600 years, has announced that he was shocked -- shocked, I say -- to learn that Wall Street bankers had betrayed their fiduciary responsibility to shareholders because of personal greed. The guy in charge of regulating the banking system never heard of greed? Trying to explain the banking system without mentioning greed is like trying to explain childbirth without mentioning sex. ("But Daddy, how did the baby get in there in the first place?")
When Bill Bidwill's Cardinals played football in St. Louis, the fans perennially complained that his near-pathological frugality prevented the team from reaching the league's upper tier. His penny-wise, pound-foolish approach to team finance resulted in a generally mediocre product that ultimately reduced gate receipts thus prompting him to search for greener pastures in the desert.
Mr. Obama has chosen the opposite approach. He would invest heavily in the economy up front, then pay back the borrowed cash from the enhanced tax receipts that prosperity yields.
Will his strategy lead us from the desert to the Promised Land? The answer to that one is a firm "maybe"...
M.W. Guzy is a retired St. Louis police officer who currently works for the city Sheriff's Department. His column appears weekly in the Beacon.