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Deval Patrick on CorporationsDemocratic Governor (MA) and presidential contender |
PATRICK: I founded a fund at Bain Capital to invest in companies for social and environmental good. Because I wanted to prove what I believe to be true, which is that this notion of having to trade financial return for social good was a false trade all along, that you don't have to. And we proved that we could get a competitive return and have measurable, meaningful social & environmental good. We've been practicing a kind of capitalism in this country for a long time that was all about short-term gains, next quarter's results, without due regard for the long-term interests in the enterprise, of the people in the community and the planet. We've got to get back to a different definition of long-term value. And I think it's an incredibly important proof point for business generally and for investment in particular.
Patrick joined the board after it was already under investigation and has argued he used his position to help change the bank's culture. In May 2005, with Patrick on its board, the company settled a $50 million class-action lawsuit charging it had defrauded borrowers in four states. The following year, it agreed to pay $325 million to end a lawsuit brought by 49 state attorneys' general that alleged systemic fraud. Patrick quit the board shortly after the $325 million settlement.
Everybody in this Chamber gets that. You respond to seekers, just as I do. You see their craving for opportunity, and you know that opportunity is at the core of the American Dream itself. From good jobs to good communities, creating opportunity is at the center of our best work.
Opportunity is too important to leave to chance. Opportunity requires growth. And growth requires investment. It's just as true of government as in any business. The economy is not like the weather; it is not some natural force that is beyond our control, something where we have to wait for others to predict or explain. What we choose to do, and not to do, shapes our future. That is why we invest in education, innovation & infrastructure.
All that market fundamentalism is about is letting people's consciences off the hook. If the market is "just," none of us is responsible for the havoc it may wreak. But the invisible hand of the market need not be free of ethical values, and ought not be. In any event, there is a right way to lay off people and a wrong way.
The financial bottom line is not the only bottom line. There is also a community bottom line, an environmental bottom line, a moral bottom line, and public leadership should try to integrate all of them.
PATRICK: We’ve got to speed up the permitting and approval processes. I also think we have to do things to connect up good ideas with the capital they need to get started. Remember, it is small and medium businesses where most jobs get created and it’s a good idea looking for capital in a neighborhood. I also think we’ve got to reinvest in our infrastructure, because if the roads and bridges are falling apart businesses will leave.
A: I think we have made a tremendous amount of progress in the area of fair lending. We have had a number of very carefully targeted cases, all but one of which have resulted in agreed resolutions.
Q: And what were the problems you’re addressing with those cases?
A: There were a couple of different kinds. One was underwriting discrimination, that is, differences in judgments among comparably qualified individuals that seemed to be based entirely on race or ethnic background, in some cases on age or gender differences. In other cases we saw people with comparable credit backgrounds and credit histories being charged dramatically different rates for the same lending product. The lending industry itself attributes to the attention that this administration has given these issues a record level of lending to African-American and Hispanic-American borrowers. I think that has been terrific.