Why was no one prosecuted for contributing to the financial crisis?
Posted by freedomforall 8 years, 1 month ago to Business
Excerpt:
The FCIC was set up to investigate the causes of the financial crisis. The commission didn’t have either the authority or the resources to do a criminal investigation. But as the documents show, a number of matters—involving Goldman Sachs, AIG, Merrill Lynch, Citigroup and Fannie Mae—were referred to the Attorney General. No criminal prosecutions arose from any of those. (In Citigroup’s case, the SEC settled with the company and two executives in the fall of 2010 for a paltry sum. The Commission drily noted, “The SEC’s civil settlement ignores the executives running the company and Board members responsible for overseeing it. Indeed, by naming only the CFO and the head of investor relations, the SEC appears to pin blame on those who speak a company’s line, rather than those responsible for writing it.”)
The FCIC was set up to investigate the causes of the financial crisis. The commission didn’t have either the authority or the resources to do a criminal investigation. But as the documents show, a number of matters—involving Goldman Sachs, AIG, Merrill Lynch, Citigroup and Fannie Mae—were referred to the Attorney General. No criminal prosecutions arose from any of those. (In Citigroup’s case, the SEC settled with the company and two executives in the fall of 2010 for a paltry sum. The Commission drily noted, “The SEC’s civil settlement ignores the executives running the company and Board members responsible for overseeing it. Indeed, by naming only the CFO and the head of investor relations, the SEC appears to pin blame on those who speak a company’s line, rather than those responsible for writing it.”)
There are (1) corporate giants allegedly "too big to fail" and (2) a more than equal elite too special to jail.
I'm quaint enough to add that #1 has nothing to do with our Constitutional government, where ever that faded off to.
#2 was created by the cronyism kinda things that created #1..
When Mark-to-Market hit, any Bad Loans had to be re-valued to what they would sell for if someone put a gun to your head and asked your selling price under the condition you had to close the sale in the next hour. What would YOUR Home's selling price be under those conditions... Hint: Nowhere near what you'd like it to be! All that was forgotten or swept under political rugs in order to blame banks for essentially doing what any sane businessperson would do under those conditions!
Barney and Bill encouraged a You Should Own A Home culture and when people discovered they could get mortgages on homes they otherwise could Never afford... IN A Buyer's Market... houses stopped being Homes and morphed into Fast-Gain Cash Cows. Houses changed from Homes to Investments, and highly leveraged "futures" ones, at that. That got renters and flippers excited.
I believe the get-rich-quick culture, compounded by Barney and Bill's stupid manipulations of the otherwise Free Market in homes lit the fuse. The banks and investment companies tried to capitalize on the distorted market so naturally politicians blamed THEM for the problems caused By The Politicians!
Yeah, I would love to have gotten a piece of some of those banks' profits, but hey... I did... I sold a Silicon Valley postage stamp about a year before the bubble burst. (timing just happened that way) and got to trade UP in house at a lower purchase price in a wonderful area AND live a year or two off the 'excess profits' that Bill and Barney helped me get.
I don't blame the banks. I blame the politicians and the greed of economic illiterates who got sucked into the bubble because they didn't know shit about how economics Really Works...
Oh, and by the way, when all that paper was being transferred from the one FM to the other FM, I'm told that NOBODY EVER looked at the numbers on the paper to see if they were right or even realistic. Logistical, Bureaucratic Process FAILURE.... so everyone but the guilty parties get blamed.
I watched it happen. It seems that nobody else saw the wall or the handwriting on it.
Cheers!
Chief among them Senator Thomas Dodd and Representative Barney Franck with the approval of Representative Nancy Pelosi and others from what is supposed to be both sides of the aisle but isn't any more. They were the chief architechts and supporters of the subprimes under the theory that everyone deserves a home and the government would back the mortgages through F. Mac and Fannie Mae. While the whole thing was blowing up in their faces the FM and FM Directors or whatever were drawing huge bonus money. Later on when it crashed the congress and the Pres decided to change the rules for banks involved as how to evaluate properties with sub sub sub prime former credit rating buyers which sunk a lot of the little banks who bought into that sort of thing.
Instead of being prosecuted they made a movie and the main political perpetrators were cast as hero's Statists = Corporatists etc etc. came out on top.
The whole thing stunk like rotten fish added to a manure pile.
Fines and still of course bonuses still paid again to the grifters because they are so valuable to the corp. When they should rot in said manure pile.
serve notice that if you defraud American citizens, you will pay for the rest of your life...
I also would not hold the financial industries blameless for Frank-Dodd. They were silent fans of that deregulation which allowed them to legally buy and sell their own derivative products. Frank-Dodd just made it legal to risk their depositors' moneys in speculation while creating a mechanism to encourage them to take risks by signing on the taxpayers as a guarantor in the (inevitable) event that the speculation incurred losses.
There was plenty of blame to go around and not nearly enough responsibility.
As to the risk taking; either a person did, or they were gone (meaning: find a new career). It was a direct, and VERY predictable, consequence of the regulations.
The three parts of socialism working together for their own ends is also known as the ruling class, the aristocracy the neo feudalists and more than that the one's you are going to vote for again they don't care which of the three it's all a charade.....and they can find enough willing to sell out with ease.
More aptly into jail cells, but agreed, that isn't likely with the corruption evident in and between the Dark Center and NYC.
They have three fine candidates for the left this go round. Clinton, Trump, and Sanders.
1. Fines benefit no one and encourage the looters.
2. Fines against a banking cartel that can print fiat from nothing with little restriction, enforcement, or transparency is not punishment.
Individuals who are at fault through actions (even legal but unethiclal) must be punished in a way they feel the pain of their prey.
To paraphrase Valentine in Trading Places, "it occurs to me that the best way you hurt rich people is by turning them into poor people."
Ideally, this should also include restitution to those harmed and be done voluntarily by the companies who caused the harm. (That last part will not happen by the utterly corrupt unethical bankster cartel.)