Listen to the cooing of major media outlets, and here is what you will be told about New York Attorney General Eliot Spitzer — that he is America’s “Best Public Servant” (Reader’s Digest), “Crusader of the Year” (Time magazine) and “The Sheriff of Wall Street” (TV’s “60 Minutes”).
Nice, very, very nice, which is why Mr. Spitzer mentioned these accolades on his Web site — but overly nice considering the politically ambitious Mr. Spitzer has recklessly destroyed reputations, cost major firms’ shareholders hundreds of millions of dollars, put literally thousands out of work and seriously slowed New York City’s economic growth.
None of that matters much to some in the news trade, I’m afraid, because they consider big finance a beast in need of constant piercing, a threat to Americans instead of what it really is: a vital means of their sustenance. These journalists thrill at finding an anti-business hero, a St. George who will stick spears in the capitalist dragon.
This particular St. George, now hoping to ride all this media adulation to the New York governor’s mansion, has himself praised the free market in words that might make some of his admirers cringe. He told an interviewer on public TV it “creates jobs, moves capital, creates wealth,” which, in fact, it does.
He quickly added, though, that the free market would not survive without the “integrity, transparency and fair dealing” that government can bring about, especially government as personified in Mr. Spitzer, you were made to understand. The trouble is this best of all public servants takes an ethical shortcut to achieve these ends and ends up not achieving them. As critics note, he simply skips his central responsibility of gathering evidence of criminality — if it actually exists — and bringing the accused to trial.
Instead, he has used the extraordinary powers of subpoena, interrogation and investigation granted him under a progressive-era state law as a club to hold over the heads of executives while excoriating them in headlines. His public damnations cause stocks to plummet and teeth to chatter. To save themselves from possible extinction, companies agree to just about anything — firing executives, paying steep fines, even ending legal, efficient and economically beneficial business practices.
His cheerleaders will tell you Mr. Spitzer’s pulverizing press releases have led to important structural change in investment banking, brokerage houses, the management of mutual funds and the insurance industry. Not so, say critics such as Alan Reynolds, a Cato Institute fellow who ably shows many “reforms” made or sought were setbacks, not improvements.
In one piece, for instance, Mr. Reynolds takes on Mr. Spitzer’s worry before a congressional committee that “the ordinary purchaser of insurance has no idea that the broker he selects is receiving hidden payments from insurance companies.”
In the case in question, Mr. Reynolds notes, the major corporation clients well know what they’re doing and will go to other brokers if they don’t get good deals. If a broker’s services aren’t competitive, his business will go kaput.
There’s nothing amiss here except Mr. Spitzer’s fevered search for deviltry. Given that, let me disclose I’ve entered a low-compensating free-lance deal with a company owned by someone criticized by Mr. Spitzer. I have not thus been bought.
Mr. Spitzer might just be about to get his comeuppance. One of those he has just kicked in the teeth, Maurice “Hank” Greenberg, a highly acclaimed entrepreneur, chief executive officer and philanthropist, is fighting back. Evicted as chairman of American International Group after a Spitzer assault, he just may prove he is not a fraud-committing liar, as Mr. Spitzer unscrupulously called him on national TV but that Mr. Spitzer himself is the fraud.
Then there’s a former mutual-fund broker who did not scurry for the woods with a settlement when Mr. Spitzer started flinging allegations his direction. Prove illegality, says this man. Prove it in court. Maybe Mr. Spitzer won’t be able to, and those other settlements will start looking fishy, one article observes.
Finally, some say Mr. Spitzer should resign as attorney general because he is running for governor, and for this reason: Corporations may feel if they donate to his cause, he will leave them alone, or that if they fail to, he will come and get them.
He’s a tough, smart guy, this Mr. Spitzer is, and may shake off these rare challenges and come out on top. The other possibility is that justice will come out on top.
Jay Ambrose is formerly Washington director of editorial policy for Scripps Howard News Service.
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