Dan Rather REMEMBER DOOR-TO-DOOR salesmen? If you are of a certain age, you will. Or perhaps you live in rural America, where the Fuller Brush man and others like him are still a thing of the present. Your reporter remembers a time when door-to-door salesmen were a fixture in most communities, big and small. Most of them were honest people trying to make a living. And though it wasn't manual labour, it was far from easy work. I know - I tried it in my younger days and was a bust, even when it came to selling subscriptions to The Saturday Evening Post, then the most popular magazine in the country.
Before I conceded that I had absolutely no talent for sales work, though, I got a taste of the seamier side of the business. In a twist worthy of an O. Henry story, it came in a job where I was selling Bibles door to door. I soon discovered that the company I worked for had a kind of bait-and-switch strategy whereby we seemed to be hawking a Bible for $2 but really only sold one that cost twice that amount. I hated it, and I didn't last long.
My bosses at the Bible company had probably figured out a way to just skirt the edge of legality, but from time to time you would also hear word of out-and-out frauds. During the Great Depression, if you took people's money and the law caught up with you, a sympathetic jury was hard to come by. Crooked door-to-door salesmen could and did end up in jail.
NOT-SO-CLEAN HANDS
I hope you'll excuse this trip down memory lane; it is occasioned, in this case, by the $1.4 billion settlement reached this week between the Securities and Exchange Commission and 10 Wall Street firms accused of putting out tainted stock research. Three of those firms - Citigroup's Salomon Smith Barney, Merrill Lynch, and Credit Suisse First Boston - were accused more specifically of issuing out-and-out 'fraudulent' research.
To 'curry-favour' with corporate investment banking clients, top investment firms were in many cases allegedly selling individual investors a bill of goods. As for the goods themselves? "Junk" is how one analyst described the same stocks that he was, from the other side of his mouth, talking up. Documents that came to light as part of the settlement, such as an e-mail that crowed of "going to Cancun" thanks to one piece of manipulation, suggest that some analysts were all but laughing at the little guys.
For the profit of the few, the many were played for suckers. It's hard to describe the depth of feeling this news stirs up in those of us who believe so strongly in capitalism as the best system for rewarding work fairly and for promoting economic growth the feelings it stirs, especially in those of us who can recall times like the Depression, when capitalism's ability to do these things was called into question.
The settlement decrees that some of the worst individual offenders will personally have to pay out millions of dollars in fines. But if analysts stand to make many millions more than that by questionable means, it's hard to see how the fines will discourage such behaviour. And it's hard to see how the settlement doesn't amount to another case of preferential treatment for a few. These aren't door-to-door salesmen - none of this Wall Street crowd is going to jail.
There's one more thing that's hard to see, and that's because it's an unknown part of an uncertain economic future: Now that this game has been exposed, will the suckers come back?
Dan Rather is a television news anchor at CBS.
