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Posted at 9:33pm on Mar. 10, 2008 Schadenfreude is Far Too Mild a Word

Eliot Spitzer: the thorn in Wall Street's side

By blackhedd

Courtesy of Slate, a smackdown of the Governor of New York State. They say he was laid low by the same kind of investigation he once used to terrorize Wall Street. Actually, no.

The stock market may be battered, the dollar may be plunging, and the economy may be tanking, but there's a bull market in schadenfreude on Wall Street this afternoon. Even as the Dow was on its way to notching another triple-digit loss, whoops of joy erupted from the dispirited trading floors today on news of New York Gov. Eliot Spitzer's disgrace. Spitzer, who rose to prominence as a scourge of Wall Street, uprooting corrupt practices, coming down hard on bad actors, and establishing a new moral order, was laid low by reports that he had been involved in a prostitution ring.

Spitzer was not brought down by the kind of investigation he himself specialized in. The last time I checked, soliciting a prostitute is actually illegal in New York, and the transportation of an individual across state lines for the purpose of engaging in prostitution violates the Federal Mann Act.

In other words, the Governor of New York was busted for breaking the law. That's not why he busted people all over Wall Street, who in many cases were guilty of nothing more than success.

Exhibit A: Hank Greenberg, the former CEO of the AIG insurance companies, a wholly unattractive and ruthless little man who built his company up over several decades to a global powerhouse with 80,000 employees and and astounding $80 billion in annual revenue. Say what you will about Greenberg, but he generated a lot of jobs and created a lot of wealth for ordinary people.

But Eliot Spitzer, as NYS Attorney General, by his own admission, creatively interpreted a never-used statute from the 1870s and found a way to accuse AIG of something I really couldn't begin to explain to you. He intimidated AIG's directors with threats of personal criminal liability and they fired Greenberg. To this day, neither Greenberg nor AIG have been indicted or formally charged with any crime.

Spitzer used the awful power of his office to create a public-relations victory for himself by destroying the lives of people all over Wall Street. A similar story applies to Dick Grasso, the former chairman of the New York Stock Exchange and most of NYSE's directors. Grasso, who piloted the exchange through the difficult, transformational times following the 9/11 attacks, was guilty of nothing more than getting a large severance payment.

Now you know why a big cheer went up all over Wall Street this afternoon when we got the news that this filthy skunk has finally gotten his:

It was personal.

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