Bonuses - The Next Communications Hurdle

According to urban legend the godfather of publicists, P.T. Barnum, was asked by a fish cannery to help clear its warehouse full of unattractive white salmon. Barnum did so by sticking labels on the produce which read: "Guaranteed Not to Turn Pink in the Can..."

Well Phineas, Wall Street needs your winning brand of double-think now more than ever.

(Keeping with the fishy theme) the sharks are circling. First Waxman and Cuomo and now House Financial Services Committee, Chairman Barney Frank. All demanding either justification for or cessation of Wall Street's upcoming round of bonuses which, among the firms taking part in the government's TARP plan, is estimated to come in at around $20bn. Even the White House smells blood in the water.

How will the FS Industry manage this issue? Will this be framed for them by regulators and the media as "The Bailout" or "Wall Street vs. Main Street" have been over the past months? Or will the industry find its voice and present its case forcefully and cogently. The fightback has started here and here but so far the argument seems to be that the government is even less trustworthy with taxpayers' money than the banking industry. Will this be enough?

On a lighter note, the head of the American Bankers Association who is spearheading to counter-offensive is Ed Yingling. I was trying to recall where I had heard that name, or something very similar, before...and then it came to me: Ringling Bros. Perhaps we needn't fear after all, perhaps the spirit of the great showman still lives....

Messaging Session please

If the bailout/credit crunch crisis is a confidence issue then by default it is a communication issue too. As all good PR people know, good communication builds understanding and, thereby, support and confidence. Congress and governments should allocate more time to considering and addressing the messages their actions give out. The vast majority do not fully understand the issues involved and no one knows how this situation will play out. However we are receiving multiple messages and it is hampering confidence building.

As things stand, people will inevitably reach their own conclusions about the wisdom of the bail out. Governments should lay their thoughts on the table more clearly to ensure their public is included and involved in their rationale. If things don't work out as planned, they will at least have more chance of support.

The extreme action they are taking in the banking market is alienating people who feel market forces should be left to sort this problem out and that the heart of the problem, culturally driven irresponsible borrowing and lending, isn't being addressed.

Who Speaks For the Financial Industry?

The previous post touches on something that I have been considering for the past couple of days: who speaks for the Financial Industry as a whole? After one of the worst days in Wall Street history driven,  in no small part, by confusion and resentment around a - largely sensible - Congressional proposal, one has to wonder why the best equipped, best funded, and most sophisticated industry worldwide - the Financial Services Industry - isn't better at making its own case. 

Love it or hate it the petroleum industry has used public relations with increasing success to convince consumers and lawmakers of two inalienable facts: 1) carbon fuels are a necessary evil which fill an immediate need while we search for viable alternatives and 2) for all the talk of 'big' oil and corrupt cadres, "around 41% of oil company stock is owned by 401k retirement plans and mutual funds" i.e. by you and me. 

Very similar arguments could be and should have been made around today's 'bailout' bill but the administration and its proponents have, as so often happens, failed to pay sufficient attention to the only thing that really mattered in the end: successfully framing the debate. 

The fact that the word "bailout" is now well and truly cemented in the vernacular demonstrates the need for a more cohesive and frankly more effective communications strategy industry-wide.