So Joe Lieberman has announced his retirement from US politics. Good riddance to bad rubbish. More than any other American politician, Joe Lieberman was a champion of corporate malfeasance and dirty deals that gave us Enron, WorldCom and a host of others.
Lieberman, who would have become US vice president if it wasn't for a handful of Florida votes, was a puppet of American business. In 1994, he got the Senate to vote 88 to 9 in favor of a resolution opposing requiring companies to treat the value of stock options they hand out as an expense. By handing out options, companies were creating an environment where managers were being rewarded for managing the share price, not the business. And that in turn led to the bubble that created the financial crisis. If it wasn't for politicians like Lieberman, America could have avoided the financial collapse.
The former chairman of the US Securities and Exchange Commission Arthur Levitt roasted Lieberman in his book Take On The Street.
He details how Lieberman wanted to castrate the Financial Accounting Standards Board which was there to audit the auditors and keep the accountants honest. And he stymied any attempt to treat options as expenses, instead of free money. "None was a more formidable foe than Senator Joe Lieberman of Connecticut," Levitt said.
Lieberman's legacy is summed up nicely by Floyd Norris in the New York Times: "Had he not been there, some of the worst excesses of the technology stock bubble might have been avoided. Certainly shareholders would have had a better understanding of how the bosses were getting rich."
Such an understanding might have pre-empted and stopped the financial crisis before it started.
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