Monday, May 11, 2009



In this morning’s Wall Street Journal, we heard the story of James B. Lee, Jr., the (or perhaps a, with the inflation of titles at banks that has been going on for the last, oh, 40 years or so) Vice Chairman at J.P. Morgan Chase. Mr. Lee, it seems, just leaps from success to success. First, he led the banking syndicate that lent $6.9b to Chrysler when it was bought by Cerberus. Had he had anyone on his staff who actually knew something about the car business, or even if he had heeded the knowledgeable voices on, say, the blogosphere, who defied the conventional wisdom and proclaimed the Chrysler deal doomed before its inception, he would not have come close to making that loan. (Readers of the Insightful Pontificator and its predecessor, the Insightful Irregular Commentary, know of at least one such voice, but that is another matter.) But, of course, Mr. Lee is a corporate chieftain, and thus he worships at the altar of the conventional wisdom. To defy the conventional wisdom, to the typical American corporate bigwig, is as unnatural act as, say, coprophagy would be to a normal person, but I digress. So Mr. Lee (who, presumably, is not the same Mr. Lee made famous by the Bobbettes in their eponymous 1957 hit, one of the Pontificator’s favorite songs of all time) went ahead and made the loan, doubtless sure that he and his staff, who clearly know little or nothing about the car industry, put a great asset on the books because those guys at Cerberus are (Can’t you just hear the conversation in the J.P. Morgan executive dining room? “These guys are sharp, sharp…just can’t miss…rowed crew at Yale…”) Predictably, Chrysler went in the tank. But, hey, anyone can make a bad loan. The Pontificator, back in the very distant past when he almost was somebody, bought his share of bad junk bonds, and so is in no position to question the credit savvy of so imperious a personage as Mr. Lee.

But then Mr. Lee compounded the problem and further manifested his particular brand of idiocy by playing the tough guy. When the going, mirabile dictu, got tough at Chrysler, Mr. Lee called Steven Rattner, another walloping wonderboy type whose most salient feature in this instance was his (very similar to Mr. Lee’s) utter lack of knowledge of cars and the car industry, but who heads the Obama’s administration’s automotive industry task force. Mr. Lee, doubtless thinking that he was dealing with the obsequious mediocrities who populate his bank, and most mammoth American banks, demanded in that 3/29/09 call that Chrysler’s secured creditors be repaid the entire $5.6 billion “and not a penny less,” as Mr. Lee put it in what was probably only the latest expression of the triteness that has doubtless characterized his career. Forget the validity of Mr. Lee’s claim, which, unlike Mr. Lee himself, actually has some merit. (See my 5/1/09 post, “WE ARE NOT AMUSED”.) Just imagine this bloviating blowhard, who has spent his career surrounded by sycophants who, if such a thing were possible, are even less qualified for any position of responsibility than is Mr. Lee, and whose only trait even remotely resembling talent is the ability to answer every question thrown their way with “Yes, sir. Right away, sir. That’s a brilliant idea, sir. Have you lost weight, sir?” on the phone saying “Not a penny less!” and expecting compliments on his perspicacity, tenacity, and testicularity. Unfortunately for our hero Mr. Lee, on the very next day (3/30/09), Mr. Rattner and Mr. Obama called his bluff and effectively told him to take a hike. A few hours later, one day after the intrepid Mr. Lee demanded “not a penny less” than the $5.6b the secured creditors were owed, he called Mr. Rattner and said “We need to talk.” Within a month and a day, Mr. Lee settled for 29 cents on the dollar, plenty of pennies less than the amount for which he had blustered just a few weeks before.

You would think that after embarrassing himself twice, Mr. Lee would have gained a little humility. No sir. He then made it his business to get all Chrysler’s secured lenders to agree to the deal which he was forced by his government paymasters to swallow whole, an abomination that turned bankruptcy law on its head by presidential diktat. (See again my 5/1/09 post, “WE ARE NOT AMUSED”.) Unfortunately for Mr. Lee, many of his fellow creditors, unlike himself, were not big time corporate types who got where they were by virtue of their heavy cudgels for use on their underlings and their thick knee pads for use on their superiors. And they didn’t owe the government anything. They refused to go along with Mr. Lee’s entreaties (One can again hear the old boy now: “C’mon…the bank has some great seats at Yankee tickets. Ever been to Chase’s skybox? Hey, do you play golf? I have a great tee time at Ardsley!”) and doubtless were as amused as would be the Pontificator by this peacockish popinjay’s attempts at bullying. So Mr. Lee failed again.

Three strikes for Mr. Lee. But, of course, he’s not out. He’s in the club, which assures him outrageously remunerative employment for life, no matter how many times he strikes out. But normal people who work for a living and who at least occasionally show signs of talent and intelligence might ask “Why does this man still have a job that demands anything more challenging than asking if one would like a certain scrumptious deep fried side dish with one’s plastic burger?”

Does anyone out there think that Mr. Lee is unique in his incompetence or arrogance? I have nothing but anecdotal evidence from having dealt with and worked for such corporate personages, and from reading the papers, but I would answer with a resounding “NO!” Corporate America is teeming with pusillanimous poltroons like Mr. Lee who got their jobs through bloodlines, connections, shameless bootlicking, or some combination of all three. It is the dominance of our modern corporate and political worlds by people of the talent, temperament, and character of Mr. Lee that is a vital element in my generally dismal outlook for the future of our once great nation.

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