When I come back in my next life, I want to be a banker or a hotshot on Wall Street. Because it’s the kind of work where you can do anything you want, break any laws, never get punished and make a huge amount of money. And the best thing is: you make someone else pay for your fuck-ups. That is the upshot of the settlement reached today with the banks. Another day, another sham.
I get why people are going to say, “wow, this is some deal”. Because for the normal person, when you read the word “billion”, you think that is a heap of money. So, this will distract people from the truth:
Bank of America agreed on Monday to pay more than $10 billion to Fannie Mae to settle claims over troubled mortgages that soured during the housing crash, mostly loans issued by the bank’s Countryside Financial subsidiary.
Separately, federal regulators reached an $8.5 billion settlement on Monday to resolve claims of foreclosure abuses that included flawed paperwork used in foreclosures and bungled loan modifications by 10 major lenders, including JP Morgan, Bank of America and Citibank. About $3.3 billion of that settlement amount will go toward Americans who went through foreclosure in 2009 and 2010, while $5.2 billion will address other assistance to troubled borrowers, including loan modifications and reductions of principal balances. Eligible homeowners could get up to $125,000 in compensation.
Yes, it is good that some money will get into the hands of homeowners. I’m sure it will be a relief to some people.
But, this is a distraction for a few reasons.
First, remember the damage these guys on Wall Street caused. Trillions of dollars — “trillion” now that’s real money — of value lost, a large chunk of it from pension funds, meaning peoples’ retirement. Millions of people around the world lost their jobs. And, in many countries, like Spain and Greece, vicious austerity has been the cost for the greed and crimes on Wall Street.
When you think of that carnage, you might think, “damn, that settlement is a bargain”. And you’d be right.
Second, who actually is going to pay these fines and settlements? YOU. That’s right. YOU and the shareholders of the banks. These bastards running the banks will simply raise fees. Maybe not today. But fees will go up over time all in the name of “profitability”. But, it will actually be the cost of the financial crisis — passed on, again, to the victims, not the perpetrators of the crisis. Isn’t American justice and capitalism great?
I would have thought differently, a bit, had the deal basically barred banks from raising fees for a certain number of years. And even required that a pot of money go to individual consumers to make up for the already jacked up fees imposed.
Third, all these guys still have jobs. I was not among the group of people who said let the banks fail. That would have sparked an even bigger collapse and who knows how many people would have lost their livelihood. BUT–fuck, these guys took cheap money, taxpayer money, from the Federal Reserve to save institutions and they kept their jobs.
There should have been a simple demand, back then and today — you take public money or you make a deal and, bye bye, the entire top management gets the boot. Clean house. Gone. Barred from ever working in the financial industry again.
And, last, but certainly not least, I have argued for a long time that the top executives needed to go to jail. Jail is the only thing that might — might — stop another greed-driven crisis from happening again. What people like Jamie Dimon and Lloyd Blankfein fear the most is being separated from their mansions, fine wine, private jets and all the perks that make their lives, in their minds, worth living.
The real crimes — the misery of millions of people who can’t find a job and the many more millions whose retirement plans have evaporated — have not been paid for. A fine, a deal, is not enough.
And because of that, it will happen again.