More than two dozen businessmen, professors, and left-of center activists have signed on to a letter to Senators Reid and McConnell on financial reform, warning, "Neither the bill passed earlier this year by the House, nor the one currently under consideration in the Senate would have prevented the crisis. Without serious restructuring, they will not prevent a future crisis." Among the things they want in legislation are a mandated "timeline for the resolution of Fannie Mae and Freddie Mac," as well as "a separation of the roles of chairman and CEO for regulated financial institutions."
Notable signers include Clinton administration officials Robert Reich and Bowman Cutter, short-seller Jin Chanos, Peter J. Solomon, and Leo Hindery, who is identified as "Chairman, The US Economy/Smart Globalization Initiative New America Foundation." The New America Foundation Web site makes clear that this same Mr. Hindery who is now agitating for law separating the chairman and ceo roles was, from 2001 to 2004, "Chairman and Chief Executive Officer of The YES Network, the nation's largest regional sports network and the television home of the New York Yankees." Also, he is "Managing Partner of InterMedia Partners LP, a New York-based media industry private equity fund." Yes, the same Mr. Hindery and InterMedia Partners that surfaced here earlier as having paid firms affiliated with Roberto Ramirez $883,333 to arrange meetings with the New York City and state pension funds. That Mr. Hindery is now a spokesman for financial "reform" is almost comical, in this context.
Never mind that splitting the CEO and chairman titles was tried in Great Britain and did not work, or that the emprical research on the matter shows it either makes no difference or actually "is associated with systematically lower cash flows and value," as we wrote about earlier here.
