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Gasparino on Spitzer and Grasso

by Robert Teitelman  |  Published March 4, 2011 at 1:25 PM
eliotspitzer125x100.jpgBarry Ritholtz went after Charlie Gasparino Thursday for his New York Post column earlier in the week thrashing Eliot Spitzer. Got that? There's a lot of ill will swirling around in that sentence. Gasparino seems concerned that Spitzer, who despite miserable ratings for his cable talk-fest, has been "rehabilitated" by documentaries like "Room 9" and "Inside Job" (which just walked off with an Academy Award) and will run for mayor of New York City. Gasparino a) believes Spitzer did an "uneven job" as New York attorney general and b) is "polarizing" as a political figure and c) might have abetted the financial crisis by chasing Hank Greenberg out of AIG. In short, Gasparino thinks a Spitzer run would be a disaster. Gasparino lards all kinds of juicy nuggets into this column, though the sourcing never rises above the usual "I hear" or "people have told me." Gasparino drops the small bomb, which raises this speculation to baroque heights, that former New York Stock Exchange head Richard Grasso, hounded by Spitzer for his large pay package (Grasso won in the end), is "leaning toward challenging Spitzer as a Republican." In just a few lines, Gasparino constructs a campaign-by-hearsay. Indeed, my favorite part is when he unrolls what he calls "a few caveats. The Grasso-for-mayor notion is a long shot (Grasso, who didn't return a phone call, is known for playing practical jokes) and the Spitzer-for-mayor scenario is far from a lay-up." "A" phone call? "Practical jokes?"
 
Maybe Mayor Bloomberg will stay another term.
 
Anyway, Ritholtz goes after Gasparino for a relatively minor thought in the column: the notion that Spitzer "abetted" the crisis. "This is simply a false and misleading statement," writes Ritholtz. "AIG had been in the business of writing risky derivatives for a long time. Hank Greenberg's hand picked Joseph Cassano, the executive that ran AIG FP (immortalized as The Man Who Crashed the World). And keep in mind that in 2003, the big credit mania that drove the housing boom and bust was still in its early innings." Ritholtz's grammar sometimes gets away from him, but he's got a point, particularly in his conclusion: "The list of false issues that ostensibly caused the crisis gets longer and longer." This is not unlike the growing list of omniscient souls who claim to have seen the crisis coming.
 
To me, Gasparino's "abetted" comment is less about his analysis of the crisis than a simple matter of settling scores among now-ancient enemies. Gasparino dislikes Spitzer and therefore joins the anti-Spitzer team, led by the likes of Grasso and Greenberg -- two men who, despite self-evident talents, are pretty hard to like. More interesting is Gasparino's take on Spitzer's term as AG. He's exactly right on several scores: It was uneven, he did chase "headlines, not substance," he failed to truly "reform" Wall Street research, and when he did go to court, which was rare, he tended to lose. He was a grandstander and a demagogue. He was right about conflicts on Wall Street and did reveal ills that everyone else was prepared to sweep under the carpet. But just because he targeted Wall Street does not mean that he had a clue about what was really going on, although he has promoted himself as the one guy who could have made a difference. Equity research, in short, is a long way, in significance and size, from the subprime crisis or the securitization mess. Spitzer himself comes from a real-estate family, worked in the business and had his campaigns funded by real estate profits. But as far as I can tell he too missed the bubble; or at least he never said much about it. Perhaps he was too busy running for office, fighting with Albany, then trying to escape his own career suicide after the hooker revelations. But when we hear that the "experts" let us down by missing the crisis -- or looking the other way -- we should include Spitzer in that group.
 
My totally unsourced, ignorant take on either Grasso or Spitzer running for mayor? Maybe it is a practical joke. It's true, Bloomberg was never lovable, but he exudes competence. Grasso may be a pint-sized hero to Gasparino, and he's a native New Yorker, but he's got plenty of baggage too, and his tenure at the NYSE, for all the flag-waving and self-promotion, was mixed at best. As for Spitzer, we've been hearing he's about to make a comeback since he started doing interviews during his self-imposed exile (for several years The New Republic was pushing him hard). If a couple of documentaries can make Spitzer lovable and electable, then Michael Moore would be president. - Robert Teitelman
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Tags: AIG | Barry Ritholtz | Charlie Gasparino | Eliot Spitzer | Inside Job | New York Post | New York Stock Exchange | Richard Grasso | Room 9
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