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Hess says he has learned several things from the fallout of recent corporate misdoings:
• On CEO scandals and market confidence:
“I think this kind of scandal has a short-term,
negative impact on people’s thinking,” he says. “But from a medium-
or long-term perspective, an accounting scandal is not the same
thing as a banking scandal or crisis. We can fix accounting scandals
relatively quickly, but banking crises take a long time to work
out-just ask Japan. What it does suggest is that what’s really more
important than anything else is how a firm is managed, and how oversight
works . . . I think this whole issue of management and monitoring
will be emphasized, and that there will be long-term benefits from
it for the U.S.A. I’m extremely bullish,” says Hess, smiling.
• On Martha Stewart:
“I think she’s definitely being made an example
of. People want to see her come down a bit because she epitomized
too much of the '90s . . . And when they’re trying to get your friends
to rat you out, it’s not looking so good for her, or whom she chooses
for her friends.”
• On the current economy:
“The economy, though not great, is probably not
suffering from anything that the Fed’s done. Inflation is pretty
low. And some of the improvements we (Shadow Committee members)
would make right now are probably not as important as the ones the
Market Committee made 25 years ago.”
• On the relationship between international relations and economics:
“I think there’s still a pretty strong amount of evidence out there that the extent to which countries trade makes the world more peaceful. Countries which trade more tend to be more democratic, and thus tend to live in a more peaceful world.”
• On the possible connection between moral failure and crises:
“I think there is plenty of moral failure in good
times, and in bad! (Laughs.) I think sometimes we talk about how
greedy certain individuals are, but I think in some sense we were
all seduced. For example: tech funds. Nobody made anyone put their
money in tech funds. We should have known these a-historical things
may not be all they’re cracked up to be. I think it’s more hubris
on our parts than greed on a few other people’s parts. I don’t know
where that is on the list of big sins or little sins, but I’m sure
it’s a common failing that will stand the test of time.”
Hess and wife, Lora, are the parents of Abigail,
8, and Meredith, 6. Hess says being a father “gobbles up” most of
his hours outside class. He also is taking time to coach his youngest
daughter’s A.Y.S.O. soccer team this year, and is trying to squeeze
in more reading by favorite authors.
“I recently went through a period of reading only books by authors who’d won the Nobel Prize in literature,” Hess says. “That was a bit of a struggle, but a good one.”
And if he runs out of books, there are always places to parallel park.
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