Friday, October 2, 2009

Ken Lewis Bullied Into Retirement By Government

As everyone knows by now, Ken Lewis, CEO and President of Bank of America (BAC), has announced that he will retire at the end of 2009. Most people won't shed a tear over the departure of a well paid CEO, especially when that CEO presides over the nation's largest bank by assets, and we are in the midst of an economic recession. Throw in the fact that this recession has been largely blamed on reckless banking practices, and it wouldn't surprise me to hear a few cheers over Mr Lewis's resignation. The problem is, this guy is the wrong scapegoat. Ken Lewis did the financial system a favor - whether it was voluntary or not - by purchasing both Countrywide Financial and Merrill Lynch. Furthermore, Bank of America's purchase of Merrill was the result of unprecedented Government coercion. The federal government has well established the fact that, in times of crisis, it may take virtually any action necessary to restore the "peace". Whether it be post-911, or post-Lehman, the reality is that the rights of any individual or corporation take a back seat to what the federal government feels is best.

My opinion of Ken Lewis as a person was distinguished by one story in particular. A good friend of mine served a term in Bank of America's internship program, during which he participated in the largely uneventful activities that occur during such stints. On the last day of the program, the bank held a small luncheon for the interns, where they were able to get a free meal and mingle with the bank's middle management. Once again, a potentially unremarkable event. In the middle of the festivities however, Ken Lewis made an unexpected appearance. He shook the hand of every single intern, and thanked each plebe for the time that he or she had devoted to the bank. Obviously, if you choose to take the cynical view on this one, the conclusion is that Ken Lewis did not care about the interns. However, the fact that the CEO of the largest bank in the country would appear at an intern luncheon is something I consider pretty remarkable.

The point is, Ken Lewis went down because of a dysfunctional federal government, and the political class' need to divert attention away from it's own culpability. Sphere: Related Content

No comments:

Post a Comment