I do not know whether the practice can be defined as torture under the Vienna Convention, and I am certain it is not mentioned in the Army field manual for the interrogation of suspects, but it is time to bring back the pillory.
Pillories are made of wood and they were used as a form of punishment in colonial times. They consist of two pieces of wood which are joined together by a hinge in such a way that three holes are created through which a prisoner’s arms and neck can be placed. They were placed in prominent public places but they are not physically painful. They inflict shame, not pain. You can find historical examples of pillories at Colonial Williamsburg, Salem, Massachusetts and various other locations.
It is time to place a new set of pillories in the middle of Wall Street. The titans of capitalism have no shame and it is the missing ingredient in all the various schemes for economic recovery.
First up would be Mr. John Thain, the former CEO of Merrill Lynch who spent $1.2 million of his troubled company’s assets on renovations for his office. Mr. Thain’s company no longer exists: It was bought by Bank of America at a bargain basement price because it was barely solvent. He says he plans to pay the money for his nifty office back. "It is clear to me that in today’s world it was a mistake," he told CNBC.
Actually, it was a mistake in yesterday’s world too, Mr. Thain. When your company is tanking, lavish expenditures on CEO perks is a mistake. And, it is shocking that he still has that kind of money to pay back. Surely some fiduciary responsibility to shareholders was ignored when he paid himself his enormous salary as well. Maybe he did not know his company was tanking, but such ignorance would raise a different, but no less fierce, objection to his salary. Nor, do I have any reason to believe he was merely incompetent. He was greedy and for that the punishment should be public shaming. Put him in the pillory for a few days and let others take note of the lesson.
The entire board of Citicorp should follow Mr. Thain into the pillories. They announced plans to go ahead with the purchase of a new $50 million corporate jet. You, dear reader, if you are an American taxpayer, are funding this request because the same Citicorp, led by the same board, received $50 billion in bailout funds last year. And, as a condition for further moneys from that bailout, executives should be required not only to fly commercial airlines like the rest of us but they should fly coach. I am sure they will love the ham and cheese sandwiches you can buy for $5.50. Exact change is appreciated.
Economists as a group should be next up. They continue to fill the airwaves with their prognostications, and rarely are these predictions accompanied by any admission that they are clueless. Or did I miss their predictions that this mess would be forthcoming. I seem to remember hearing just last summer, in a show leading up to the Beijing Olympics, how they were worried the Chinese economy would overheat. Ah, to have such problems. I will listen to the advice of any economist who begins his presentation by noting that the economy, like the weather, is a non-predictable phenomenon.
Whatever else caused the economic mess, the current problem is essentially psychological. We know that we got into this mess because we lived beyond our means. So, in their wisdom, the American people are restraining spending and saving more, which makes sense personally but is not what the economy needs. Equilibrium will come when what the economy needs and what makes sense for individuals are aligned. What is needed is confidence that CEOs and bankers will act responsibly and be ashamed when they put their personal comforts ahead of the interests of their shareholders. It is time to bring back the pillory to reintroduce a little shame into the calculations of our corporate leaders. They’ve earned it.