From 50,000 Feet

Dealmaker.com’s Bess Levin sees glee emanating from Wall Street regarding the fall of NY Gov. Elliot Spitzer:

Obviously, overall, Wall Street is happy about the news. One trader told (CNBC’s) Bob Pisani it means “there is a God.” But we want more individualized, firm-specific responses. Like, Merrill Lynch was one of (Spitzer’s) first targets. Are they happier about the revelations that the erstwhile Attorney General (slept with) a hooker than, say, Lehman? What does Bridgewater think of this? The virgins at RenTec? Is everyone at SAC all like, “Not interested”?

John Carney, another writer at the attitude-laden finance site, lingers over the drama and what it tells him about the governor as a character:

There’s a certain poetic quality to this final act of Spitzer’s. His extraordinary popularity with members of the press (now presumably extinguished) was rooted in his willingness to leak, sotto voce, allegations of misconduct in the personal lives of the subjects of his investigations. The press loved the juicy headlines. His motivation was apparently to embarrass and intimidate the subjects of his investigations so that they would be forced to comply.

We admit to enjoying the spectacle of watching a man so given to the high moralistic tone brought low by such a misdeed. As one commenter on the New York Times wrote, he’s gone from Eliot Ness to Eliot Mess. But this is not just schadenfreude. There’s a matter of serious public concern beneath the cheers and smirks of those who won’t be sorry to see Spitzer fall from the bully pulpit. What the federal wiretap has uncovered is not just a sex scandal but a dark crack running through the character of New York’s governor. It’s as if we were Basil Hallward looking for the first time at the picture of Dorian Gray.

That a man so versed in the blackmail style of prosecution would so readily open himself up to that dark art is, at the very least, extraordinary. One would think that a man who deployed his aides to whisper about a corporate executive allegedly “banging” his assistant, would be wise enough to the ways of the world to avoid putting himself in a position where he could be blackmailed. That he lacked such wisdom—or ignored it—shows a reckless disregard for the responsibilities of the high office to which the people of New York elected him.

That reckless disregard is coupled in Spitzer’s character with a steadfast self-regard. Even in his brief apology, he focused mostly on how he had violated his own standards of conduct rather than those of the public’s mores and statutes. It is as if, in the kingdom of Spitzer, there is no crime worse than violating the standards of Spitzer.

Over at Porfolio.com, Sam Gustin reports that most prominent Street figures and especially those whose firms were past Spitzer targets are not commenting on the record. However, he did get this:

“Wall Street is beside itself in an orgy of schadenfreude,” said Barry Ritholtz, C.E.O. of Wall Street research company FuisonIQ. “There are a lot of high fives on the Street today.”

“It seems that every time there is some kind of moral crusader, it’s almost like they’re overcompensating for a self-created character flaw,” Ritholtz said.

Why does Wall Street dislike New York’s governor so much?  Economics blogger Megan McArdle explains:

To be sure, we already knew that Eliot Spitzer had no respect for the letter of the law–his signature move was going after people on the basis of moral outrage, rather than, say, violating a statute. But his behavior since he got into governor’s office has been, in the deepest sense of the word, scandalous. His use of the state police to prosecute petty political battles, and now his flagrant violations of statutes that he himself used to enforce, seem to indicate that Spitzer thought he had been elected to the position of Third World Dictator.

However, as the NY Times pointed out, the Spitzer Administration’s rough first year seemed to be fading into the past and his fortunes were rising.

Spitzer does have defenders (though it was hard to find many), including law professor Alan Dershowitz and, somewhat backhandedly, conservative pundit Tucker Carlson.  According to Huffington Post’s Sam Stein:

Alan Dershowitz, who taught Eliot Spitzer at Harvard Law School, came to his former student’s defense today after it was revealed that Spitzer was tied to a prostitution ring.

Calling into MSNBC, the famous legal mind decried the prism through which the media was focused on the Spitzer affair, calling it a “uniquely American story.”

“I feel terrible for Eliot and his family,” said Dershowitz. “But I feel that this was a story that we have to put in perspective. Big deal. Married man goes to prostitute. In Europe, this wouldn’t even make the back pages of the newspaper.”

Reminded that Spitzer himself had railed against prostitution rings in 2004, Dershowitz admitted that there was “cycle of hypocrisy” that the New York Governor had become a part of.

Hmm.  I think the governor could probably use better talking points than these.  I assume we’ll hear them soon, unless Spitzer resigns.

Tags: Elliot Spitzer, prostitution, Wall Street