There is no substitute for a culture of integrity in organizations. Compliance alone with the law is not enough. History shows that those who make a practice of skating close to the edge always wind up going over the line. A higher bar of ethics performance is necessary. That bar needs to be set and monitored in the boardroom.  ~J. Richard Finlay writing in The Globe and Mail.

Sound governance is not some abstract ideal or utopian pipe dream. Nor does it occur by accident or through sudden outbreaks of altruism. It happens when leaders lead with integrity, when directors actually direct and when stakeholders demand the highest level of ethics and accountability.  ~ J. Richard Finlay in testimony before the Standing Committee on Banking, Commerce and the Economy, Senate of Canada.

The Finlay Centre for Corporate & Public Governance is the longest continuously cited voice on modern governance standards. Our work over the course of four decades helped to build the new paradigm of ethics and accountability by which many corporations and public institutions are judged today.

The Finlay Centre was founded by J. Richard Finlay, one of the world’s most prescient voices for sound boardroom practices, sanity in CEO pay and the ethical responsibilities of trusted leaders. He coined the term stakeholder capitalism in the 1980s.

We pioneered the attributes of environmental responsibility, social purposefulness and successful governance decades before the arrival of ESG. Today we are trying to rebuild the trust that many dubious ESG practices have shattered. 


We were the first to predict seismic boardroom flashpoints and downfalls and played key roles in regulatory milestones and reforms.

We’re working to advance the agenda of the new boardroom and public institution of today: diversity at the table; ethics that shine through a culture of integrity; the next chapter in stakeholder capitalism; and leadership that stands as an unrelenting champion for all stakeholders.

Our landmark work in creating what we called a culture of integrity and the ethical practices of trusted organizations has been praised, recognized and replicated around the world.


Our rich institutional memory, combined with a record of innovative thinking for tomorrow’s challenges, provide umatached resources to corporate and public sector players.

Trust is the asset that is unseen until it is shattered.  When crisis hits, we know a thing or two about how to rebuild trust— especially in turbulent times.

We’re still one of the world’s most recognized voices on CEO pay and the role of boards as compensation credibility gatekeepers. Somebody has to be.

Bank of America’s Record Settlement: The tsunami of wrongdoing and excess that caused barely a ripple of inconvenience at the top.

The indisputable economic (and moral) fact of our time is that America’s most wealthy, from whom capitalism’s CEOs, directors, guardians and gatekeepers  are drawn, not only allowed this torrent of financial chicanery and deception to occur, they profited handsomely from it.

These pages have voiced strong doubts over the years about the leadership and compensation practices that prevail at many of America’s corporations. Chief among the criticisms were that these plans provided incentives and rewards that caused companies to take improper risks which allowed CEOs to rack up huge gains in the short run while investors — and, ultimately, society — were left holding the costly bag of empty promises when reality came crashing down.

Take Bank of America, for example, which recently settled with the U.S. Justice Department by agreeing to pay a record $17 billion in penalties and restitution.  In the long history of American business, there has never been anything approaching this outsized penalty.  It stems from improprieties at Countrywide Financial, which B of A bought in another fit of misguided thinking, just before the onset of the Great Recession. There were also irregularities involving disclosures about its takeover of Merrill Lynch as well as with Bank of America’s own mortgage practices.

You might think that CEOs and boards are paid well for keeping companies out of trouble and avoiding these kinds of disasters.  Half of that observation is certainly true.  In the five years leading up to the crash of 2008 and the beginning of the worst recession since the Great Depression, B of A’s CEO Ken Lewis was paid more than $200 million.  Each of the bank’s directors awarded themselves a minimum of $1.5 million in the same period.  Many collected more.

When  he retired in 2009, Mr. Lewis walked away with a further $83 million in retirement benefits. Others connected with B of A, such as former Merrill Lynch CEO John Thain and Countrywide Financial’s former CEO Angelo Mozilo, also made off with huge fortunes as a result of deals made with the bank under Mr. Lewis.

And for all that, one of America’s most prominent financial institutions did not walk — it ran — into the giant propeller of U.S. government in a predictable and avoidable financial collision that resulted in this staggering record payout.

Bank of America was, as we documented over the course of several years, far from alone in practicing financial acrobatics that were more suited to a travelling carnival than an iconic institution of capitalism.  Yet in this mighty tsunami of boardroom wrongdoing and excess that nearly upended Main Street, barely a ripple of bother was felt among the first-class decks of Wall Street and America’s financial elites.  No CEO has been sent off to jail.  No director  or chief executive has been forced to return any pay.  As we noted in The Fallacy of Giantsin most cases when these kinds of eye-popping settlements are announced, the company’s stock shoots up.  Government fines, no matter how staggering, and accusations of abuse and betrayal by top management and boards, no matter how shameful, are regarded by many business insiders and much of the market as just another cost of doing business.

The indisputable economic (and moral) fact of our time is that America’s most wealthy, from whom capitalism’s CEOs, directors, guardians and gatekeepers  are drawn, not only allowed this torrent of financial chicanery and deception to occur, they profited handsomely from it.  The result is that those same elites in the period between 2007 and now managed to gain an even larger choke hold on the wealth and income of America than at any time since the 1920s.  This, despite the fact that were it not for the bailout provided by America’s taxpayers who largely live on Main Street, not only would this expansion of wealth not have occurred, but capitalism itself  might not have survived.  On that point, is it not interesting that the same voices that are generally quick to rail against government excess and demand fiscal discipline when it comes to the public purse are uncharacteristically silent when it comes to the $5 trillion the U.S. Fed paid to finance the bailout? Does that have any connection with reality, or is it just another case, like CEO compensation, for instance, where there is one set of ever accommodating rules for those at the top and another for everyone else?

What happened with Bank of America, and other prominent institutions like it, and the ease with which moral and legal improprieties can be sloughed off with little consequence for those in charge, is at the heart of the current record level of public disaffection with  capitalism and those who lead it. Having spent nearly half a century working with and around capitalism and its leaders, it is hard for me to imagine that one day it may cease to exist.  But the too often overlooked reality is that the fundamental currency that sustains modern capitalism is not capital at all — it is the consent of the public.

If present trends in income equality and  corporate immorality continue, and its leaders fail to ensure that capitalism is governed by a set of values that is consistent with the needs and dreams of Main Street, it is hard to imagine how it will survive.

Return of the Pharaohs of Misjudgment

Conrad Black is back at his (temporary) winter home in Palm Beach after being freed on bail pending the outcome of his appeal.  His conservative friends in their College of Cardinals-type media conclaves appear to seek his beatification for what he has gone through. If he is found to have been wrongly convicted, as countless numbers are in Canada and the United States every year without a whisper of concern from Mr. Black’s supporters — or the tens of millions at their disposal to make that case, as Mr. Black has — he is entitled to all the redress available for one of the most terrible wrongs the state can perpetrate on a person.  But, as Stephen Bainbridge points out, there is still much of the dark earth about him that stands between Mr. Black and his final elevation to sainthood.

Richard Fuld was back before another committee attesting to the fundamental strength of Lehman Brothers, which went under for every conceivable reason, except, of course, the failure of its leaders.  Follow-up question: does the Financial Crisis Inquiry Commission realize that Lehman had a board of directors who  might shed some light on the calamity?  Fed chief Ben Bernanke was also back before the Commission, after the Fed admitted, once again, that it misread the depth of the economic downturn in recent months.  A change in lyrics was also detected regarding Mr. Bernanke’s explanation as to why Lehman was not saved.  The self-serving music remains the same, however.  BP’s infamous blow out preventer made its way back to the surface; its corporate image is still submerged somewhere in an ocean of missteps and CEO blunders.  HP’s board is back in the news, and not in a good way.  It showed that you can spend tens of millions on a CEO and, for that lofty sum, still get a chief executive with a missing ethics gene.  The directors’ solution?  Spend tens of millions more to get rid of him in the face of the deception which the board claimed was the reason for his ousting.  Go figure. Canada saw a new Governor General appointed to represent the Queen as head of state.  It came on the sole recommendation of a prime minister whose Conservative Party holds a minority position in parliament.  It is a throwback to a time when most Canadians could not read or write and women did not have the vote.  Still, few Canadians seemed bothered by the quaint tradition. On the other hand, few parents teach the idea that any girl or boy can grow up to be GG someday.

President Obama is back to a freshly redecorated Oval Office, where he has hatched yet another stimulus package.  The new soft beige seating areas will provide a calming effect when yet lower approval ratings are published.  As the distancing of the President from the electorate becomes more pronounced, and the loudening canons of Republican victory signal their approach with each day, one can almost hear the mournful reprise of a love no longer to be: “We’ll always have health care.”

However timeless the Pyramids of Giza and the inscrutability of the Great Sphinx remain, they cannot for more than a few weeks distract our attention from the greater monuments of folly and misjudgment that today’s Pharaohs of business and government routinely create.

They will be pleased to know that, along with all of them, we are back, too.

Is the Senate Buying Another TARP in Ben Bernanke?

The Senate’s vote for the Fed’s Chairman will be viewed as a crucial test for who stands with Wall Street and who stands with Main Street.

After some slightly encouraging rumblings in the contrary direction, it appears that the Senate is poised to confirm Ben Bernanke to a second term as Chairman of the Federal Reserve.  Certain senators may be putting their jobs on the line when they do, however.

More and more, Main Street wants to know who stands with it.  Mr. Bernanke is not seen as one of those figures.  Having been part of the Greenspan-era bubble and then, even as Fed chairman himself, still blind to the dark clouds of financial crisis that were forming, his response was to shove an incomprehensible amount of money and support at Wall Street and the major banks.  But he failed to come clean on the Fed’s dealings with the financial institutions that have been taking advantage of these generous programs and, in fact, has aggressively moved to prevent transparency and public scrutiny of them in a landmark case involving Bloomberg News.

Mr. Bernanke’s role in the AIG bailout, and in permitting the secret (at the time) payment of billions to other banks, including Goldman Sachs, is still not fully explained. In the nearly two years since this crisis was apparent and more than 12 months since Lehman Brothers was allowed to collapse, the Fed under Mr. Bernanke has failed to conduct any meaningful internal review as to what went wrong, what signals were missed and what steps the Fed needs to take to address them.  At the very least, a vote on confirmation would seem premature until all the work by TARP’s inspector general, Neil Barofsky, is completed, including questions about AIG’s Fed-approved counterparty payments.

But Mr. Bernanke’s statement to legislators that he did as much as possible to prevent paying 100 cents on the dollar to Goldman is revealing on its face.  Can you imagine the legendary Arthur F. Burns, who ran the Fed under President John F. Kennedy, or William McChesney Martin Jr., who served under a record five presidents, ever being blown off by some bankers who did not want to cooperate at a time of national crisis?  Or is it a matter that Mr. Bernanke has grown so close to the big banks and their Wall Street cousins over the seven years he has been at the Fed that he just can’t say no to them?  There is a reason why Wall Street itself is voting overwhelmingly in support of Mr. Bernanke’s second term, and it’s not because it thinks he’ll be great for Main Street.

Mr. Bernanke is a little like the $700 billion TARP legislation which he co-authored (with then Treasury Secretary Henry Paulson) in the fall of 2008.  In a voice trembling with urgency, he told Congress that if it were not passed and implemented immediately, the entire economy would likely collapse.  But the TARP was never used for its intended purpose.  It did not address the main problems, as we predicted at the time.  No toxic assets were ever bought up with it.  It rattled many in Congress who thought they had been sold a bill of goods.  And more than a year later, a couple of hundred billion of it has not been spent and still many additional costly initiatives were required to get the economy moving.

Has the reconfirmation of Ben Bernanke itself become something of a TARP, where what is being sold is not quite what is needed and will not be used for the intended purpose?  Will the world really end if Mr. Bernanke is not reappointed?   Or is there more risk of the opposite happening because he will miss other disasters that are brewing, just as he missed the early signs of the current one.  Worse, will his cozy relationship with Wall Street end with a hideous price tag that drops like a rock at the doors of Main Street?  Already, trillions in liquidity have been unleashed and the Fed’s balance sheet – a key measure of its lending to the financial system – has ballooned into the record trillions.

A clean break from the past of tolerated bubbles, missed signals and overly generous policies directed at the players who caused the problems in the first place is what is needed.  Mr. Bernanke’s priorities, loyalties and convenient evasions have made him a poster boy for the discontent of Main Street and a part of what drives the forces of turbo populism.

Four years from now, Mr. Bernanke may very well be in office.  But will President Obama and the senators who vote for confirmation and against the perceived interests of Main Street?  It’s a role of the dice that should cause wise lawmakers to think twice.

It’s encouraging to hear that our earlier comparison between Fed Chairman Bernanke and Titanic Captain Smith was not lost on some senators.

Titanic Fed

Captain Bernanke and the Titanic Fed

Ben BernankeCaptain E. J. Smith

Catastrophe seems to have a more forgiving master in the Senate banking committee than in the pages of history. The captain of the Titanic was not given another chance at the wheel.  And unlike Mr. Bernanke, he had the decency to hit an iceberg only once.

The Senate banking committee voted 16 to 7 today to confirm Ben S. Bernanke for a second term as chairman of the U.S. Federal Reserve System.  It is unfortunate for E.J. Smith that he went down with the Titanic in 1912, because, if you follow the committee’s logic, it would have reappointed him to captain another ship if it had had the opportunity.

Mr. Bernanke was part of the crew who allowed the housing and liquidity bubbles to build in the first part of the 21st century.  As Fed chief, he missed the early warning signs of the impending financial collision completely, predicting that any problems would be contained and not spill over to the real economy.  Watertight compartments did not work for Captain Smith, either.  Only a few months ago, Mr. Bernanke told Congress that unemployment would not reach 10 percent in the U.S.  He was an early supporter of the TARP, the nearly trillion-dollar fund which he and others sold to Congress on the basis that its quick  passage was vital  to the survival of the economy.  Turns out it was not really about toxic assets, which the Fed never bought, but about propping up the capital of major Wall Street players -an idea that already skeptical lawmakers likely never would have bought.  Captain Smith was known to be of the view that his ship was too big to sink.  His modern financial counterpart has given new meaning to the concept that certain institutions are too big to fail.  It is worth pondering whether the philosophy, practices and vision demonstrated by Mr. Bernanke will end in a similar calamitous outcome.

At a time when opaqueness and lack of openness are widely regarded as being forceful contributors to the near economic collapse of Wall Street, Mr. Bernanke has adopted that model himself in the Fed’s anonymous transactions at the discount window and its handling of bank collateral, which is the original cash-for-clunkers program.  He was quite happy to have taxpayers kept in the dark about the AIG bailout, which fast-tracked added billions into the coffers of Goldman Sachs and other banks.  After the details became public, he offered the implausible excuse that it was not possible to negotiate a better deal and make Goldman take a “haircut.”  The world’s most powerful central banker can’t take on Goldman, but Mr. Bernanke tells the banking committee he is up to taking on a bigger role as the nation’s financial super regulator.

There is a widely held view in some circles, especially in those given to the folly of excessive public spending (which view is oddly shared by those on Wall Street and in corporate America who are driven by the vice of excessive compensation) that the Fed under its current chairman has navigated recent choppy financial waters with skill and courage.  In their view, Mr. Bernanke saved the banks, brought the economy back from the brink of a depression and performed a number of other miracles that place him somewhere between Albert Einstein and Mother Teresa–Wall Street version.  Perhaps these are less the outcome of brilliance and wonder than they are of a Fed printing press capable of producing unlimited dollars and support for a spending and debt binge that soars into cosmic frontiers where no Fed has dared to go before.  In that imaginary world, anything is possible–for a while.

Wall Street demanded, and Mr. Bernanke dutifully provided, a zero Fed rate that is the banking community’s equivalent of billion dollar bills pouring out of helicopters.  And they are making billions more from it.  New York State officials announced today that Wall Street is poised to report record profits for the first three quarters of 2009.  The $50 billion in profits is almost two-and-a-half times the previous 2000 record (another year associated with a bubble).  Bonuses will be 40 percent higher than last year.  Such numbers are a direct result of the Fed’s easy money policy.  It is not surprising that it can also buy untold support for the chairman who made it possible.

Question for the Senate:  How exactly do you go from being on the edge of the worst Wall Street crisis since the Great Depression to record bank profits in little more than a year?  Could it have happened if Mr. Bernanke had not supplied a very expensive taxpayer-bought getaway car?

The Fed and Wall Street have become an endlessly accommodating club of insiders that Mr. Bernanke has shown he is ill-disposed to disturb, especially after his collision of miscalculation last year with that other iceberg known as Lehman Brothers.  He has been willing to enter into the policy arena and indicate to Congress his disapproval of the House provision authored by Congressman Ron Paul for regular, though delayed, audits of the Fed’s monetary policy, but he has offered not a word of criticism over the New York’s Fed’s governance, for instance, which functions as a self-perpetuating clique of Wall Street bankers electing their own in furtherance of their own interests.  Another well-regarded champion of current financial reform in the Obama administration, under a President whom we admired and supported even before his nomination, seems to share the same view.  Treasury Secretary Timothy F. Geithner was president of the New York Federal Reserve Bank for several years prior to assuming his current duties.  There is no indication that he was ever troubled by the singular Wall Street view that the New York Fed personified, which accounts at least in part for the economic devastation that has ensued under its supervision over the past few years.

It is likely that the full Senate, except for a handful of members on both sides of the political spectrum, will also vote to confirm Mr. Bernanke.  Whether members of the Senate will be around when the U.S. economy collides with the mountain of inflation and another Fed-induced debt bubble that are advancing toward them, and whether the Fed under Mr. Bernanke will even see the products of its myopic policies as they approach, is uncertain.

What is clear is that catastrophe seems to have a more forgiving master in the U.S. Senate than in the pages of history.  The captain of the Titanic was not given another chance at the wheel.  And unlike Mr. Bernanke, he had the decency to hit an iceberg only once.

An Unbecoming Ben Bernanke

When the President of the United States, especially this President, and Wall Street, are of the same mind on an important matter like who the Fed chair should be, ordinary citizens need to hold on to their pocketbooks.

Having misjudged the gathering financial storm that would engulf much of the world (and in many ways still does) and then deciding to throw unprecedented amounts of liquidity at the problem (most of which was targeted at propping up and otherwise saving a colossally careless banking sector), Federal Reserve chairman Ben S. Bernanke is an odd choice for re-nomination in that post.  Nevertheless, President Barack Obama did so today.  Wall Street is pleased.  When the President of the United States, especially this President, and Wall Street, are of the same mind on an important matter, ordinary citizens need to hold on to their pocketbooks.

In some respects Mr. Bernanke seems like the character from the Woody Allen movie “Zelig,” where an otherwise unimposing man has the inexplicable capacity to transform his appearance to impress those who surround him.  We know that Wall Street and world bankers are impressed with Mr. Bernanke, given the size and generosity of the Fed’s discount window and the hundred and one other programs the Fed established in the prop-up and bailout department.  And they are certainly impressed by his zero interest rate policy, which is putting billions into the banks as a result of this Fed-made upward sloping yield curve.  It is because of Mr. Bernanke that the bonus compensation train has barely slowed from its previous bullet-like speed and companies like Goldman Sachs have been able to return to early profitability with the help of a (Fed-approved) $13 billion payment from AIG, courtesy of the American taxpayer.

The White House may see in Mr. Bernanke a fitting figure whose help will be needed to accommodate and finance the swelling national debt.  Mr. Bernanke has already shown that he is not averse to printing money and using the Fed’s powers in out-of-the-box (i.e., expensive) ways.  And a Fed head who presided over the largest expansion ever of that institution’s balance sheet is unlikely to cast too critical a glance at the prospect of a record national deficit.

Even most legislators seemed mesmerized by Mr. Bernanke’s appearances to the point where they forgot he was rather disingenuous when it came to explaining the mystery of the Bear Stearns junk assets, which the Fed claimed to be holding as collateral only to admit later that it owned the whole clunker.  There are still unanswered questions about the Fed and Bank of America, the Fed and AIG and the Fed and Lehman Brothers.

Not to be forgotten in all of this is the fact that, as a member of the Fed under Alan Greenspan, Mr. Bernanke adopted the same blind obedience to the market forces that permitted the housing bubble to occur and showed no awareness whatever of the explosion of toxic financial instruments and the risk that was being incurred at the highest levels of American finance.  Vision has not exactly been Mr. Bernanke’s forte, yet, looking forward, he claims that the Fed will know precisely when to begin to dismantle its Frankenstein-like creation.  He makes it sound as simple as opening a new app on an iPhone.

But the more likely scenario is that the costs and consequences of the economy’s withdrawal from this Fed-led morphine-like addiction that dulled the realities of economic pain will be staggering.  When interest rates spike, liquidity is withdrawn and inflation surges to new heights, and the economy again begins to falter from its so-called cure, Mr. Bernanke will become the least popular man in America, just as the Woody Allen character Leonard Zelig eventually lost his capacity to spellbind and incurred the wrath of everyone around him instead.

Larry Summers, long thought to be President Obama’s choice as Fed chair, saw what is looming ahead.  That, more than anything, is why Mr. Bernanke gets to keep his job.

Our previous observations and misgivings about Mr. Bernanke and the Fed can be viewed here.

Outrage of the Week: Paulson and Bernanke Flunk the Confidence Test

In a time when the restoration of confidence, perhaps more than even financial liquidity, is paramount in calming markets and providing stability, neither the Treasury secretary nor the chairman of the Fed acquitted themselves well this week.

As the war in Iraq unfolded, and then morphed into disaster in its first several years, the world discovered the consequences when what is given with absolute assurance as the urgent reason for taking action turns out not to be the case.

As the current economic crisis unraveled, the Bush administration claimed that it had spotted the greatest danger to the economy and the credit markets in generations. Toxic mortgage based assets held by financial institutions were cited as the threat and a $700 billion government intervention was needed to buy them up.

As President George W. Bush said in September:

Under our proposal, the federal government would put up to $700 billion taxpayer dollars on the line to purchase troubled assets that are clogging the financial system.

It had to be done immediately, he said, or a grave and gathering peril in the financial system would make its pain felt soon on Main Street. The President painted a bleak picture of what the world would look like without the bailout.

More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically. And if you own a business or a farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs. Even if you have good credit history, it would be more difficult for you to get the loans you need to buy a car or send your children to college. And ultimately, our country could experience a long and painful recession.

We expressed some skepticism on these pages as the President’s words were being digested. Portraying financial Armageddon if American taxpayers did not come up with the largest government expenditure in history struck us as not a very faint replay of the approach taken in Iraq, where the administration not only claimed that weapons of mass destruction posed an immediate threat but that it knew where they were.

So we posed the question nobody else it seemed was even considering:

Is America stumbling into a financial Iraq? … Are we dealing here with the financial equivalent of threatened mushroom clouds and weapons of mass destruction?

As it turned out, toxic assets, like weapons of mass destruction, were not the real problem. In the case of Iraq, they were never found. In the situation involving the credit crisis, none were ever bought under the government’s rescue plan. And a new solution was pursued instead: taking equity positions in financial institutions.

This week,Treasury secretary Henry M. Paulson Jr. announced that the original plan, the one upon which the $700 billion bailout was approved and which so many officials and commentators said was absolutely essential to financial stability, would be abandoned.

Even before the Bush-Paulson plan was approved by Congress, we had some doubts about its principal focus:

How the Bush bailout plan will be managed, what assets it will buy, how it will value and how long it will hold them are all undisclosed. It is hard not to be doubtful that the compromise proposal now being discussed will offer much more information. There is considerable dispute that the plan even addresses the fundamental problems in the banking sector.

And the astronomical $700 billion that Mr. Paulson initially insisted was needed in one fell swoop? Congress gave Mr. Paulson $350 billion and required reauthorization for the remaining amount. Mr. Paulson said he had no plans to ask for it now.

Elsewhere last week, the Fed refused requests by Bloomberg News and others to account for the more than two trillion dollars it has pushed out its lending window. It apparently believes the country is not entitled to know how much the Fed is lending, whom it is lending to, or details about the collateral that is being offered.

Both Fed chairman Ben S. Bernanke and Mr. Paulson have said that an absence of openness and transparency were factors that helped to create the current financial crisis in the first place. But transparency is something the Fed talks; it does not walk.

Last spring, we suggested what the Fed had said about the Bear Stearns collateral did not fully compute.

Actually, the Fed did not make a traditional $29 billion loan to JPMorgan Chase, as its official statements would have us believe. It was more of a wink-and-a-nudge deal to take on the poorer assets without going through the formality (and the barrage of questions that would follow) of actually purchasing them.

In a time when the restoration of confidence, perhaps more than even financial liquidity, is paramount in calming markets and providing stability, neither the Treasury secretary nor the chairman of the Fed acquitted themselves well this week. Mr. Paulson only added to the impression that what he and the administration say cannot be trusted or taken at face value. Mr. Bernanke showed his commitment to transparency is a one-way street. What the world needs from its leaders is candor, clarity and competency. It did not find these virtues in either man, which is why the actions of the secretary and the chairman are the Outrage of the Week.