"The Stakes Are Enormous"

So said Henry Paulson Jr., chairman and chief executive of the investment banking firm Goldman Sachs, who spoke yesterday at The National Press Club in Washington, DC. You can listen to the whole speech by visiting the National Press Club site. Paulson acknowledged the obvious -- that investor confidence has declined sharply due to rampant corporate dishonesty and fraud -- and outlined a number of measures he thought necessary to restore confidence.

"I come here as an individual who believes passionately in the strength of our free market system -- a system that generates growth, creates jobs, rewards initiative and fosters innovation like no other in history.....In my lifetime, American business has never been under such scrutiny. To be blunt, much of it is deserved. But let's be clear, the overwhelming majority of American executives are men and women of integrity who are committed to the long-term success of their companies, and to creating value for their shareholders. And so, I see this as an opportunity to reassess our practices, renew our principles and rebuild the trust that is so fundamental to our markets and their vitality."

The amazing thing about Paulson's speech is that it took so long for someone on Wall Street to give it. The poll numbers on corporate dishonesty and malfeasance are off the charts. Charles Schwab is running a national television advertising campaign aimed directly at disaffected investors and it is getting terrific results.

In fact, the Schwab campaign has been so successful that big Wall Street firms are demanding that the major television networks not run it. (CBS caved immediately and is refusing to air the Schwab spots). Given the breadth of the anger and the importance of the issue (from a kind of future of capitalism point of view), one would think that every chairman and chief executive would be banging Paulson's drum.