Sunday, May 15, 2011

Bust the bankers

The financial meltdown had many causes, but there is no doubt in my mind that chief amongst the guilty were the executives of the too-big-to-fail financial giants.  They took bad sub-prime mortgages and converted them into toxic assets and eventually dumped as much of this self-generated toxic waste onto their clients as the could by representing them as recommended investment opportunities - to suckers dumb enough to trust and believe them.  That is to say, they defrauded their clients.  Which is a felony.  And they should go to jail.

The regulators didn't regulate them, the politicians let them re-write the laws so they could be over-leveraged and be under-regulated, the government oversight institutions didn't believe in over-sight.  But, the ones who should go to jail are the ones who perjured themselves in Congressional hearings.  That would be Blankfein and other Goldman Sachs executives who did their best to say nothing when they were being grilled by the Levin-Coburn Senate hearings.  They just released a 650 page report labeled "Wall Street and the Financial Crisis:  Anatomy of a FInancial Collapse."  In it is ample evidence of Goldman and others defrauding their clients and perjuring themselves before Congress.

Where is Obama's Justice Department?  Where is Andrew Cuomo, or more to the point the New York Attorney General, Eric Schneiderman?  It will be worth watching these men respond to clear evidence of illegal activity by these financial titans.

It is easy for us to see that countries in the Middle East have been hijacked by tyrants:  Egypt had been hijacked by Mubarak, Libya has been hijacked by Qaddafi, Iran has been hijacked by Ayatollah Ali Khamenei, Iraq had been hijacked by Saddam Hussein, etc. But, it's harder for us to see the extent where America has been hijacked by Wall Street.  

The Rolling Stone's Matt Taiibi has an article that goes into some detail about the contents of this report: from disarming of the regulatory system to the perjury before Congress.  He makes a good case that these Financial titans will have the best legal defense that money can buy, but their Achilles heal will be their obvious, indefensible perjury before Congress.  Punishment is five years in federal prison.  

So far, these oligarchs, who essentially run this country for their own looting profit, have escaped with hardly a scratch.  It's time to scratch back.

After releasing his report, Senator Levin said "In my judgment, Goldman clearly misled their clients, and they misled the Congress."  These are federal offenses.  Send them to jail.

To quote Taiibi:  "For years, the soundness of America's financial system has been based on the proposition that it's a crime to lie in a prospectus..."  Goldman went way beyond lying in a prospectus.  It sought suckers, defrauded them, and are now congratulating themselves for being "smart" by seeing the collapse of the bubble before others did and getting rid of the toxins by finding those stupid enough to believe in their recommendations.  

To my mind, this is much more than punishing a few bad actors.  It is more than trying to reform the financial industry.  It is about saving the capitalist system and America itself from the oligarchs who have hijacked it.  Teddy Roosevelt busted the trusts over a hundred years ago, and in so doing he put competition back into the marketplace.  The same needs to be done today.  

Send the criminals to jail, break up the too-big-to-fail financial institutions, put teeth into the Consumer Protection Agency, take the country back from the oligarchs.

It seems like it is too late and that the oligarchs already won, but it's not over unless the fat ladies refuse to sing (i.e. the Justice Departments of Washington and New York fail to take these men to trial).