In his appearance before the Senate Judiciary Committee, Attorney General Eric Holder confessed publicly what has long been suspected, that the government has no intention of prosecuting the big banks and putting their top executives in jail even for egregious crimes because they think they are too big to fail.
If this is not a license for these banks to act even more recklessly I don’t what is. Today, NPR’s Morning Edition interviewed Anat Admati, professor of finance at Stanford University and co-author of a new book called The Banker’s New Clothes, where she talks about the danger of this situation and what needs to be done.
Meanwhile Elizabeth Warren on the senate Banking Committee has been grilling officials from the Treasury Department, Federal Reserve, and Office of the Comptroller of the Currency as to why the big banks are not being prosecuted vigorously for major illegalities. She is not buying the argument that vigorously prosecuting the top people at the big banks will result in some kind of meltdown. As she says, there are some basic principles of justice and equity involved.
“If you’re caught with an ounce of cocaine, the chances are good you’re gonna go to jail. If it happens repeatedly, you may go to jail for the rest of your life,” Warren said. “But evidently if you launder nearly a billion dollars for drug cartels and violate our international sanctions, your company pays a fine and you go home and sleep in your bed at night — every single individual associated with this. And I think that’s fundamentally wrong.”
There has to be sustained congressional and media pressure for things to change.
“Too Big To Fail” is another lie, just like “Job Creators”. Are we really expected to believe that we if prosecute the entire C-tier of executives that the Executive VPs can’t handle the company instead? What utter and complete BS.
And you can bet your bottom dollar that when the Executive VPs see all the C-tier of executives go to jail that they will suddenly start behaving a whole lot better themselves…
Next up: too rich and powerful to jail.
It’s already the case but we haven’t seen the Attorney General get on his knees and kiss the oligarch’s ring, yet, so it’s not sufficient.
Mano, you do a great job of highlighting serious issues that don’t get the coverage and change that they should. OTOH, I feel disgust with some regularity when considering their subject matter.
I also wonder if Holder shouldn’t step down. It’s nearly (but not quite) refreshing that he’s being honest (ish) but I’d like to see him focus more or what can be done. For example, put say 3/4 of the banks (there are only a handful at the top) on trial concurrently. It’ll diffuse the “well if we go after one, capitol will flee it precipitating a crash” argument since the investor class cannot pull out of 5 banks and run to the last 1-2 all at the same time.