Financial crisis: Absence of shame

When I was 12 or so, I asked my late father if he knew anyone who had declared bankruptcy. Back in the 1970s, there was still a stigma in going bankrupt--at least to someone now called a "tweener." I might have well asked him he he knew someone who had gone to prison.

He had to think about it, and my dad said he knew just one man who had to take this step. "He had a business," he explained, "and it didn't work out."

I'm much wiser now--although some of you will disagree--and I realize that even today, for regular folks, there is still shame in bankruptcy and financial catastrophes. I know several people who have declared bankruptcy, divorces were at the root of most of them.

Having to file for bankruptcy is a terrible thing for anyone who has to do it.

One more anecdote, from the classic film, "It's a Wonderful Life." George Bailey confronts his addled Uncle Billy, who of course lost a large sum of money, and Bailey barks at him, "Do you realize what this means? It means bankruptcy and
scandal, and prison!"

Scandal...with shame accepted as a given.

But let's move on to corporate bankruptcies. Until the 1980s, it's my opinion that bankruptcy lost its "Scarlett Letter" status and instead of shame, filing for bankruptcy turned into a shrewd financial decision.

Even after the 1980s ended, the worst corporate scalawags became household names until fairly recently. Charlie Keating, Bernie Ebbers, Kenneth Lay are some of them.

These men committed crimes. But does anyone know who the CEO of Lehman Brothers when it made the largest bankruptcy filing in American history? Or who was in charge of AIG when it lost $13.2 billion in losses in the first six months of this year? Or who (not Jim Johnson or Franklin Raines) CEO of Fannie Mae or Freddie Mac when the feds took over?

I don't, and if you do, you're in a select minority. These men (or women) might only be guilty of stupidity, hubris, and incompetence, but the collapse of these firms occurred under their watch.

Which brings me to a letter, which John McCain mentioned during Friday's presidential debate, that General Dwight Eisenhower prepared in advance of the D-Day invasion in 1944--which he would have submitted had the landings in Normandy had failed. The largest amphibious assault ever--and there will probably never another like it--could have easily ended in disaster had the weather forecast Eisenhower acted on was wrong.

Our landings in the Cherbourg-Havre area have failed to gain a satisfactory foothold and I have withdrawn the troops. My decision to attack at this time and place was based on the best information available. The troops, the air and the Navy did all that bravery and devotion to duty could do. If any blame or fault attaches to the attempt it is mine alone.

McCain referred to it, incorrectly, as a letter of resignation from Ike. The letter falls short of that, but Eisenhower wasn't blaming someone else or asking for another chance. The tone of the letter says it all.

There's an absence of shame today. And that is troubling. This is something Republicans and Democrats can agree on.

Related post:

My Kansas Kronikles: The Eisenhower Presidential Library and Museum

Technorati tags: history Eisenhower bankruptcy McCain John McCain business economy