Ben Bernanke got a major grilling from Congress yesterday over whether or not he had threatened to replace Ken Lewis and the entire board of Bank America if he didn’t follow through with the acquisition of Merrill Lynch last fall.  While Ben denied making any such threats, Ken Lewis apparently still felt pressured, or at least several in Congress felt he might have been. 

Unfortunately, no one ever asked the right question.  If Ken Lewis didn’t think the acquisition was the right thing to do for Bank of America shareholders, why would the prospect of losing his job over the matter have any effect on the decision he made?  Somehow, the Congressional silence on this angle implies that we can’t and shouldn’t expect leaders to do the right thing if the consequence of their decisions require sacrifice, particularly personal sacrifice. 

Ken Lewis made the decision to acquire Merrill and in my opinion, we must trust the notion that he believed it to be the best long term course of action for his shareholders at that time.  To do otherwise would be the real reason to fire him.   

With regards to health care reform, Jason Trennert makes the fascinating observation that the official actuarial estimate for the 1965 Medicare legislation forecasted total Medicare spending of $9 billion by 1990.  In the final analysis, however, it topped nearly $100 billion!  Lesson learned?  Discount to the extreme any projections provided by politicians, particularly for future social programs.  


In the entertainment category, Michael Jackson and Farrah Fawcett both died yesterday.  Talk about a gut punch for a kid raised in the 80’s.   My own children knew who Michael Jackson was, but they didn’t know Farrah Fawcett, proof positive that I’m advancing in age.  Kids, here’s the poster that was on every teenage boy’s bedroom wall across America in 1976.  I think my brother even had a t shirt just like it.  As for Michael Jackson?  As of 8am this morning, 28 of the top 100 songs on I Tunes were by the King of Pop.  Like him, hate him or not understand him, the dude could dance