Public obligations or public relations?

News of Li Peiying’s fate came today, the same day that our own banking executives appeared before Congress to explain what they’d done with their share of the TARP bailout money.

The Chinese airport executive was found guilty of bribery and embezzlement by the Jinan Intermediate People’s Court, and sentenced to death. The court noted that Li’s crimes had “resulted in large economic losses for that nation and that the amounts involved were extraordinary.”

Good thing the American bankers hadn’t been involved in anything like that.

The bank executives who appeared before the House today were not accused of any crime, but of greed and of abusing the public trust. And today they showed some measure of contrition, admitting (as Lloyd Blankfein, CEO of Goldman Sachs put it) that Wall Street “had lost sight of its larger public obligations.” Blankfein also acknowledged the “gulf” between the public and the financial services industry.

Hardly a mea culpa, but at least there is some hint of accountability here. The question is what will Blankfein and the other bankers will do to bridge the gulf. They have agencies to do this sort of work for them, of course; but public relations has never been about recognizing or meeting what Blankfein calls public obligations.

Identifying those obligations and specifying exactly what they require of executives like Blankfein and others within his organization might be a better first step.

Clearly what’s required now is something on the order of a new public charter for the banks and financial institutions, a charter that goes beyond regulations to specify obligations. A new charter doesn’t necessarily mean or entail nationalization; but it might require significant institutional and structural overhauls, not just a bailout with some degree of oversight, or salary caps. And it would require some thoughtful consideration of just how the public interest can, or should figure into the business models and business dealings of financial institutions.

That would be a first step, but even that probably won’t be taken. My guess is the bankers will instead take the public relations route, maybe do a few very well-publicized acts to demonstrate good corporate citizenship, and launch advertising campaigns to position The Bank as the friend of the downtrodden and downsized, where the common man (whose money and mortgage they hold) will be treated with understanding and compassion. Something genuine, heartfelt, a little sad, even, that nevertheless appeals to our hopes and our highest aspirations for something better in life…and something for the children. Watch for it.

Or maybe I’m wrong, and maybe the bankers are prepared to lead or participate in a national conversation about their real obligations to the public. But if Lloyd Blankfein and his fellow bankers are thinking any more seriously about their public obligations — or about how to restore the trust they have broken — it was not particularly evident from today’s question and answer session. And the bankers still don’t seem to understand just how angry people are.

Neither (I suspect) does Congress, despite the pointed questions lawmakers put to the CEOs on Capitol Hill today.

Neither side today seemed ready or willing to depart from the script: congressional outrage met with what one report nicely described as “corporate aplomb.” And the worst thing that could happen is that we get through this — they get through this — and return to business as usual.

I’d like to think otherwise, but maybe it really is us against them. That’s how it seemed to me this afternoon, when I was talking with Peggy about the banks and the bailout. Peggy is a Greek woman from Bay Ridge who cuts my hair with a straight razor and who will talk at length and with great emotion on any and every subject. She is also a small business owner and a homeowner. She is definitely not a member of the chattering classes, but one of the people.

Today, as she put the final touches on my sideburns with the electric shears, she leaned in close and whispered conspiratorially into my ear: You know what they need, these bankers? The communists. The communists. They’ll set them straight. Just for two years, that’s all. Two years and they would set them straight.

I was going to tell her about Li Peiying and the verdict of the People’s Court, but I thought better of it.

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