Good Morning Ms Kitty.....I see you have elevated me to Fascist status now. That means I must be onto something here....
So; do you think the police should not enforce laws? Do you think corporations should not have "rights"?
I have not suggested anywhere that wrongdoers should not be prosecuted. I have simply pointed out that much of what happened to bring down the banking system was irresponsible, incompetent, unethical and damaging for many people; but it would be very difficult to fit any of those things into a successful criminal case. I stress the word successful.
It is ridiculous to suggest that corporate interests are never prosecuted and punished. Case law is crammed full of successful suits against corporations. Enron being one high profile example recently. Remember the Savings and Loan fiasco.....lots of people jailed.
Class action suits against Auto manufacturers, chemical companies and others have resulted in massive payouts----both in compensatory and punitive damages. Liability insurance is a very expensive commodity for many companies because of the constant threats of having to defend against lawsuits both legitimate and frivolous......like the woman who was awarded a million dollars or something because she spilled a cup of coffee on herself...which McDonalds had sold her. The coffee was deemed to be "too hot"
Investment banking is the culprit here...not just banking. Retail banking is a totally different beast, and the one most people are familiar with. Some compelling arguments have been made in favor of proscuting the Investment bank executives as criminals. Personally I think of them as criminals too, but only from an emotional standpoint. As soon as I take my idealist hat off and put on my legal hat, it becomes a lot less clear. There is no clear cut criminal wrongdoing....we just think of it as criminal because a lot of damage was done and we naturally want those responsible to be punished. We want revenge.
If someone avoids paying a lot of tax by taking advantage of user friendly tax rules.....it infuriates those who have to pay a lot of tax because they could not make the rules work for themselves......but the guy who used the rules to his advantage is not doing anything criminal. The way to correct this is not to prosecute the guy who avoided paying the tax within the existing rules; but to change the rules.
If you listen carefully to what people like Lloyd Blankfein (GS CEO) has to say about these matters, in front of a Congressional hearing; you would begin to understand why it is so difficult to make any kind of criminal charges stick. He will talk very aggressively about "risk" and how it is viewed by professionals in the industry. How some people had taken excessive risk....but it did not seem excessive at the time....only after the fact etc.
All of the things that suddenly went wrong had been going right for years and everybody was fine with it. Betting against your own investments is abhorrent to most people, but quite normal practice in the IB business. Abhorrent or not....it was not illegal.
Blankfein will argue that all of the dirivitive products were traded between "professionals" They knew the risks....nothing illegal there either....and so on.
So what exactly is there to prosecute?
The anger and venting against the banking system is natural and quite understandable. It is not very productive however. If you only listen to one side of any issue, you will never really understand it, and so continue to bark up the empty tree. It would be nice if all the big bad guys at Goldman Sachs, JP Morgan etc could have been just rounded up and sent off to join Bernie Madhoff for a few years, but it's not going to happen because their asses are well covered; so get over it. Courts have to deal with legal issues and not rule on emotional ones.
So you see Ms Kitty, I can admit to being a pragmatist, but I'm no fascist..... I mean if I had written that Hitler was a very good orator, would that make me a Nazi supporter?....![]()




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