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Thursday, September 18, 2003

Larry Kudlow on Dick Grasso

Larry Kudlow sheds tears for poor Dick Grasso over at NRO:

"A kangaroo court of liberal-leaning journalists and Democratic state treasurers charged and convicted former New York Stock Exchange CEO Dick Grasso with an unpardonable sin — success... [T]he so-called titans of finance who sit on the NYSE board were so mau-maued by the media and political onslaught that they actually sided against the man who inflicted the first major blow on Osama's terrorism...

"Not only did Grasso start America's economic recovery immediately after 9/11...

"The announcement of a one-time payment of $140 million probably did the former CEO in... Discounted properly, this sum comes to roughly $2 million a year over the entire three-decade period Grasso served — a modest amount by Wall Street standards."

Let's just say that Larry and I have divergent worldviews. He saw the re-opening of Wall Street as a "major blow on Osama's terrorism." Of course, Grasso gave himself a $5 million pat on the back for his effort, a tad more than the soldiers in Afghanistan are getting paid. I'm not sure what "economic recovery" Kudlow is referring to; equity prices have done nicely this year, but the overall macroeconomy still has major issues, notably unemployment. Then there's the silly $2 million a year claim. In fact, Grasso was paid nearly $200 million in a short window of time ($40 million of which he returned), and it was not for his three decades of service. He never would've been paid so handsomely had he not reached such a high position at the NYSE. And I won't dignify the "kangaroo court" comment.

The fact is Grasso got paid a ton by execs he was supposedly regulating during a time when people are especially wary of corporate misconduct. This isn't hatred of capitalism but rather hope that capitalism as practiced in some quarters of the financial industry can be saved from its excesses.