So, it’s easy to capture our predicament today–though you’d never get that from the transcribers of press releases (formerly known as “journalists”). Here it is neatly summed up: we’ve been robbed, only little fish are being held accountable for relatively small crimes and, even more to the point, in a political rhetorical world where shareholders are revered, the shareholders are being left to pay the bill.
Let’s start with this piece of news
Federal prosecutors in New York sued Bank of America on Wednesday, accusing it of carrying out a mortgage scheme that defrauded the government during the depths of the financial crisis.In a civil complaint that seeks to collect $1 billion from the bank, the Justice Department took aim at a home loan program known as the “hustle,” a venture that has become emblematic of the risk-fueled mortgage bubble. The complaint adds to a flurry of federal and private lawsuits facing Bank of America’s beleaguered mortgage business.
This is nonsense. This suit, if successful, will saddle not the high executives with a penalty, but the shareholders of the banks AND the little depositors. Let me ask a rhetorical question: if the bank pays a penalty of a billion dollars, how long do you think it will take before fees go up for transactions by the average customer? How about ten seconds.
In other news:
Rajat K. Gupta, the former Goldman Sachs and Procter & Gamble director, was sentenced to two years in prison on Wednesday for leaking boardroom secrets to the former hedge fund manager Raj Rajaratnam.Mr. Gupta, 63, who ran the consulting firm McKinsey & Company and served as a top adviser to the foundations of Bill Gates and Bill Clinton, is the most prominent figure to face prison in the government’s sweeping crackdown on insider trading.
To be sure, insider trading is a crime. And it should be prosecuted.
But, it comes nowhere near the vast crimes committed by the heads of major financial institutions, who, based on the record, knew exactly what they were doing in the lead-up to the financial crisis.
That behavior cost the jobs and retirement of tens of millions of people around the globe, plunged the world into an insane spiral of elite-imposed austerity and shaped the future of the economy for years to come.
And the people who executed those crimes are free. Employed. Rich.
So, please, spare me the fireworks of lawsuits that actually hurt the same people who have already paid a heavy price.