Makropolos

I've spent most of the day absorbed in Harry Makropolos' No One Would Listen, his story about how he did not take down Bernie Madoff and I must say it is enough fun that it almost counts as a guilty pleasure. I don't know how much ghosting help he had (if any) but I must say it doesn't show: his account is breezy, salty, angry, and just enough seasoned with rookie narrative mistakes that you can believe it is the real man you are hearing.

I have to admit, I don't think Harry (we are on a first-name basis now) is the sort of guy you'd want to get stuck in an elevator with. He's got a high-salience sense of right and wrong--he says he's the kind of guy who stops at "wait" signs even when there are no cars coming, and I believe it. An unkind critic would say he's the classic case of a guy who can't change his mind and won't change the subject. The difficulty is, of course, that he happened to be right and, as the title suggests, he spent a lot of time talking to his echo.

No, that's not quite right: the title says that No one would listen; a more precise (if less euphonious) title would have been that the SEC wouldn't listen. For there are two narrative arcs here; one about Harry and Bernie; the other, about the gobsmacking, jawdropping, fingernails-on-chalkboard-scratching incompetence (or worse) of the jewel in our regulatory crown. There seem to have been a lot of people who knew or suspected that Bernie must have been doing it with mirrors. It was Harry who kept carpet-bombing the SEC staff with evidence which they didn't seem to want and didn't seem able to understand. He gets maddest at the end--and who can blame him?--when they disappear into a cloud of bureaucratic smarm, without so much as a word of apology to the victims.

Harry ends the book with a longish list of particular suggestions for reform. A lot of these are interesting and worth considering, particularly those that look to the nuts-and-bolts operational agenda: put in some Bloomberg terminals, move he headquarters to New York, send the staff to more trade conferences. But he never gets his mind around the deeper issue--namely, that this is the kind of fish that rots from the top--the SEC doesn't work because for most of the last decade, nobody wanted it to work. The Bush years began with Chairman Harvey Pitt who seemed to regard it as his first obligation to protect the industry from the public. It ended with Chris Cox bright and sincere but so ideologically blindered that he believed his own free-market propoganda.

With leadership like that, it's no wonder that no serious public servant wanted to stay on board. It wasn't just the lure of private-sector money (though surely that was an issue); it's rather that there was nothing about the job that was going to make a man or woman proud.

I guess it's fair to say that the votes are still out on the present incumbent chair, Mary Schapiro. Harry takes no solace from the fact that she came from a job protecting the industry against regulation. But he ticks off a few promising reforms. And as we wait for the future to unfold, here is one possibility: among many markets that stink right now, one is surely the market for private-sector employment in finance. This might be just the time when a strong-willed chair with a sense of mission could tank up on skilled staffers who would stick with her because they wanted to be there and because they didn't have any place else to go.