The banks will suffer if a moratorium is declared on foreclosures and this will cause economic problems that will filter down into the rest of the country making our recession worse. This is probably true.
If we penalize, punish these huge financial organizations for their violations of the law, we will also have economic problems very similar to those associated with a moratorium. Mortgage companies will have to slow down foreclosures reducing bank profits across the nation. If there are prosecutions, key players who understand the system and have repeatedly proved themselves moneymakers would be out of play and their vital skills unavailable to maintain bank profits at the current high level.
It is said that while the violations of the law were especially cruel to the occasional mortgage holder, generally speaking the process is sound and few were actually harmed. Their are no statistics bearing this out because mortgage companies did not look at (in fact, ignored) the records before they foreclosed. Nevertheless this is a common belief. And common beliefs are often true.
And while the courts were directly lied to on hundreds of thousands of occasions, these were purely procedural matters. In the vast majority of cases, nothing would have changed, the foreclosures would have taken place. Should we penalize the great financiers upon which this nation’s prosperity depends on for what is really a purely procedural violation? While obviously there is some moral failing in filing cases without any actual knowledge of the facts, the facts were generally routine.
Further, no large organizations were harmed. Without any large corporations or other large economic players damaged the recovery can proceed. Does it really matter that there were procedural irregularities in which only small economic units were harmed? Can this really be really worth actual prosecutions costing time and money? Can we afford to damage the reputations of the top figures in American finance during this period of slow growth and economic uncertainty?
Is it not reasonable to pass over this unpleasant episode with as little fanfare as possible, of course, having some review of some mortgages that have gone wrong? There was no intent to defraud these individuals. The only reason documents were processed without examination was to speed the process. Looking at the documents would not have allowed the firms to foreclose on tens of thousands of homes a month. Let me ask you, really, how can a mortgage company compete with other companies doing as little process as possible? Following the law would have cost billions of dollars and threatened the very existence of companies in compliance. Have some compassion! These companies employ tens of thousands of individuals whose salaries and expenditures go to support this economy.
Be reasonable. The law is merely a tool, sometimes to be raised (perhaps when there a bank robbery, you know a violent crime) but at other times to be laid aside. Sometimes the harm of enforcement is greater than that of justice.
Reasonable! When did that word become a tool for those contemptuous of the law.
When did threatening our economy with ruin become a successful strategy to avoid prosecution?
When did lying to the court become a routine matter? When did taking peoples’ home become so routine that when we don’t know whether they should have been taken or not, no one is supposed to care?
When did the importance of competition become so important that it overrode the needs of the nation’s people and simple justice?
Where is justice? Can it be found? Does it exist?
Here, listen to this fellow and his thoughts on the law –
Let reverence for the laws, be breathed by every American mother, to the lisping babe, that prattles on her lap — let it be taught in schools, in seminaries, and in colleges; let it be written in Primers, spelling books, and in Almanacs; — let it be preached from the pulpit, proclaimed in legislative halls, and enforced in courts of justice. And, in short, let it become the political religion of the nation; and let the old and the young, the rich and the poor, the grave and the gay, of all sexes and tongues, and colors and conditions, sacrifice unceasingly upon its altars.
–January 27, 1838 Lyceum Address
Let every American, every lover of liberty, every well wisher to his posterity, swear by the blood of the Revolution, never to violate in the least particular, the laws of the country; and never to tolerate their violation by others.
–January 27, 1838 Lyceum Address
That was Lincoln.
And then there was this guy –
“If the people cannot trust their government to do the job for which it exists – to protect them and to promote their common welfare – all else is lost.”
“In the absence of sound oversight,responsible businesses are forced to compete against unscrupulous and underhanded businesses, who are unencumbered by any restrictions on activities that might harm the environment, or take advantage of middle-class families, or threaten to bring down the entire financial system.”
We didn’t become the most prosperous country in the world just by rewarding greed and recklessness. We didn’t come this far by letting the special interests run wild. We didn’t do it just by gambling and chasing paper profits on Wall Street. We built this country by making things, by producing goods we could sell.
That guy was Barack Obama.
Where’s justice?
James Pilant
I exchanged e-mails with Alain Sherter and asked him what he thought about the amazing sense of entitlement among Wall Street executives. Although, he replied very politely and tactfully, there was a certain element of “What planet have you been on?” And he was right, I should have picked up on it a long time ago. Once I did, I encountered more and more examples of this phenomenon. It was astonishing. These individuals who had every advantage from birth could swear on a Bible that every last atom of their success had been earned through their hard labor. They knew that they were the important producers of value in this society and flew in unimaginable higher intellectual circles than the poor ingrates beneath them. They know that everyone who is not in their class is lazy and undeserving. They know that any, down to the tiniest amount, of taxation is a blow to their productive capability, totally unfair, and an unearned charity to the great mass of lazy, unmotivated citizenry. 
Pilant's Business Ethics Blog 
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