What do Ben Bernanke and Tiger Woods have in common? The chairman of the Federal Reserve and the golf champion were crowned “Person of the Year 2009” by Time magazine and by the New York Times, respectively.
Time magazine chose Ben Bernanke as Person of the Year 2009. This choice seems surprising, even if it’s somewhat influenced by the American Democrats’ wish to give him a second term.
There’s no doubt that the man showed courage and determination in 2007 – 2008 by taking action that was above and beyond the traditional powers of a central bank. In doing so, he acted in concert with Jean-Claude Trichet of the European Central Bank, who dealt with the first wave of problems; bailing out IKB Deutsche Industriebank in Germany, and in the same week dealing with the panic provoked when BNP Paribas suspended the repayment of funds.
Whatever the merits of our big central bankers, we must not forget that they didn’t see the iceberg towards which the financial world was dangerously headed. That is especially the case with Ben Bernanke: he lacks a capacity to anticipate crises and was a victim of a form of ideological myopia.
On the subject of bank regulation, his ideological myopia simply followed that of Alan Greenspan. The refusal to see financial risks that numerous authoritative voices warned about was something he shared with his predecessor. It wasn’t until August 2008 that the subprime mortgage problem was considered to have real consequences. This was a perspective shared by the Republican Party, and George W. Bush had appointed Ben Bernanke. He was a proponent of laissez-faire, the ideology of the administration in place.
But what is important for the future is Bernanke’s vision and his capacity to preempt crises. Although he had the means to do otherwise, he acted with decision much too late. This makes the chairman of the Federal Reserve one of those responsible for the severity of the financial crisis.
In contrast to Alan Greenspan, who had a real ability to read the early warning signs of a crisis, Ben Bernanke is a pure economist and needs the confirmation of numbers before he will act, unless he is facing an obvious fact. This theoretical attitude makes one lose confidence in his leadership, and certainly does nothing to reassure us for the future, especially since he has never admitted his mistakes (as opposed to his predecessor) and seems more rigid than ever. He just stated once again that there wasn’t any risk to the American economy that could come from the financial sector.
I wouldn’t give the title of Person of the Year 2009 to any financier.
I was therefore intrigued by the suggestion to proclaim Tiger Woods Person of the Year 2009. He has certainly drawn attention to himself with his well-hidden extramarital adventures; his wife threw a fit that was the source of the car accident that spilled the beans. But unlike certain others, Bill Clinton for example, Woods immediately took responsibility for his errors and admitted to having failed his family. He also announced that he was withdrawing from a tournament, taking a break from professional golf and would focus on resolving his problems with his family.
Accenture, the large global consulting firm that had made Tiger Woods the symbol of its values, immediately let its champion go. Overnight, a debate opened on the weaknesses of using idols in the promotion of products. But through its actions, Accenture demonstrated the opposite of the champion qualities it pretends to emulate: cowardice. The efforts that Accenture is deploying to erase Tiger Woods are beyond ridiculous. Bravo Nike, which, contrary to popular choice, decided to continue to support the champion.
The United States Golf Association is already worried. When Woods stopped competing to take care of his knee, television audiences for golf dropped by 47 percent. There are hundreds of millions of dollars at stake. That ought to shorten the champion’s absence.
We all have the tendency to idealize men and to forget, likeTiger Woods said, that they are “fallible human beings.” What allows Tiger Woods to be the person of the year is his status as the top golfer in the world, with nearly double the points of his nearest competitor. He’s a champion without parallel and an incarnation of the American dream.
This seems to me more real than the performance of the chairman of the Federal Reserve, who, as the New York Times reminds us, believed like all of Washington that “housing prices would go up in perpetuity to support an economy leveraged past the hilt.”
Bravo Tiger.
Accenture partners claim that the company enforces high ethical standards but the facts shows differently.
Douglas Scrivner responded to a SEC related to the reestructuring costs that http://www.sec.gov/Archives/edgar/data/1143908/000095013706000977/filename1.htm
“The partners did not pay the tax liability at the time of the reorganization transaction because the Company and its external advisors felt there was a reasonable possibility of a favorable outcome. The Company and its external advisors believed the tax positions related to the restructuring transactions were appropriate and supportable under local tax law and the Company intends to defend, as needed, tax positions taken by the partners. A favorable outcome is still possible through either issues not being identified on audit by tax authorities, a successful defense of the position, or expiration of the statute of limitations, so it is not appropriate to pay the tax liability at the time of the transaction, or at any time, unless administrative and legal processes have concluded and resulted in an actual unfavorable outcome.”
In page 16 of the “NOTICE OF THE 2010 ANNUAL GENERAL MEETING OF SHAREHOLDERS”
( http://www.sec.gov/Archives/edgar/data/1467373/000119312509251604/dpre14a.htm ) is stated:
“Senior Executive Tax Costs
The Company has informed approximately 2,500 of our senior executives that if the senior executive reported for tax purposes the transactions involved in connection with our transition to a corporate structure in 2001, the Company will, in certain circumstances, provide a legal defense to that individual if his or her reporting position is challenged by the relevant tax authority. In the event such a defense is unsuccessful, and the senior executive is then subject to extraordinary financial disadvantage, the Company will review such circumstances for that individual and find an appropriate way to avoid severe financial damage to that individual.”
In the newspaper el Mundo there was informed that Accenture (and therefore all shareholders) have paid 110 million euros, plus the penalty related with the unpaid taxes of the 100 Spanish Partners in 2001 reestructuring.
http://www.elmundo.es/mundodinero/2008/06/20/economia/1213922650.html
If now as declared there are 2500 senior executives that might be in the same situation, it is stright forward to have a direct correlation of the possible personal tax impact on former senior executives that Accenture is commenting it might be paid by the company and therefore by all Accenture shareholders.
Which Ethical Standards are higher, Mr. Woods’s or Accenture’s