When Only Martha Stewart went to Jail

I must say at the outset, that while I bear no particular animus toward Martha Stewart, I am not really a fan. My idea of decorating is to make sure that the place is clean, otherwise I am more of a function over form type person.

I reflect on her, though, because of the recent escapades of financial foolery prominent in the press. Poor Martha goes to jail over a $100,000 insider trade (!) while Bernie Madoff awaits, ahem, justice (I can't even write that with a straight face) in his penthouse. I really, truly, am glad that Martha bounced back, went on with her life, got her groove back so to speak. Many that Madoff touched won't do as well. Bernie gets his penthouse, many of his clients will get the poorhouse.

What a buffoon. But then, he is in very good company.

But back to Martha. The 7-16-2006 posting of money.cnn.com reported:

"While comparatively small in terms of the dollars at stake and the gravity of the crime, Stewart's obstruction of justice case has been a powerful public relations vehicle for government officials to send the broad message that corporate malfeasance will not be tolerated."

Now that had to be hard to write with a straight face. Or perhaps I am judging yesterday with today's wisdom.

Because we are witnessing "corporate malfeasance" on a scale never envisioned by law makers. Government prosecutors are reluctant to attempt to bring the big boys to justice when those same prosecutors hope to get a job with a big house after their government stint.

The revolving door policies of the alphabet soup of government regulatory agencies from government "service" to private sector to academia and back again foster only judicial incest, not impartial justice.

From the same CNN article Stewart said "I didn't cheat the little people. ... We're all little people. I didn't cheat anybody out of anything." She's right, almost. MOST of us are little people. Leona Helmsley once quipped that "only the little people pay taxes".

So that leaves a small percentage of "big people", similar in nature but larger in scale, to the so-called "one percenters" of the motorcycle gang world. These "one percenter" types of the financial world, (well I won't say they don't pay taxes, but I would love to see their income tax returns), are very large indeed, and very busy, lurching from one disaster to the next.

They might not be guilty of corporate malfeasance, and we will almost assuredly never know if they are, but they certainly are tried and found guilty in the court of public opinion.

Citigroup has had to cancel its order for a new $50 million corporate jet; poor babies, I do wonder how they will bear up. This is upon orders of the new Treasury Czar, Timothy Geithner. He at least has the advantage of not being a Goldie, at least not yet.

There is nothing wrong with being rich. There is nothing wrong with ordering a $50 million corporate jet. What is wrong is cheating and committing fraud to do so. Ford Motors made a public relations faux pas with flying in corporate jets to testify before Congress, begging for money. There is no inherent virtue in flying coach. There is virtue in using wisely money given to you, extorted, I mean volunteered, from the American Taxpayer.

Hindsight is always 20-20. Accusations have been flung far and wide as the manure hit the air handling unit. Nassim Teleb, in his book,The Black Swan calls this the "narrative fallacy". We look backwards and tell ourselves that we could have seen the sub-prime mortgage problem coming, that we SHOULD have seen it coming, we Should Have Done Something to stop it. The answer, of course, is that we probably could not have done anything. This was an outlier, a cascade of errors, one of which alone would have had a negative impact on one or another segment of society, but acting in concert with each other were disastrous.

The "little people" are here, I would suppose, to fund the bailouts, pay the taxes, take the risk and keep quiet about it. We have become tax serfs, we the "little people."

I now believe I know why only Martha went to jail. There were no SEC regulators or Federal prosecurotrs that wanted a job with Martha Stewart.