You Have To Prosecute Individuals

JPMorgan Chase Tower (Dallas)
JPMorgan Chase Tower (Dallas) (Photo credit: Wikipedia)

You Have To Prosecute Individuals

There has been much anger in the financial press about JPMorgan having to pay a multi-billion dollar fine. It has been strangely charged that this is a government attack on capitalism. No, actually the bank broke the law and failed over and over again to act in an intelligent manner about its investments or its clients. But Gretchen Morgenson is absolutely right. This kind of fine isn’t really getting tough with the banks. It’s merely carrying on the long tradition of banks paying some proportion of the losses they caused while criminal prosecution as individuals is off the table. 

There is no real penalty here. The billions are just the cost of doing business. The bank has paid out fines before. The bank will pay out fines again. The fun and enormous profits of reckless speculation will remain.

There will only be an effective deterrent when wrongdoers are punished personally by fine and imprisonment.

You can’t attack prevent crime by attacking organizations with minor financial penalties. You could effectively if you were willing to pull the corporate charter from the bank and destroy it, or seize all of its assets. But I see no willingness to do that. The only effective tool present is the power to prosecute individuals.

It is bizarre to tell students to act with business ethics when they can read everyday in the news of the incredible money being made by individuals under the cover of banks deliberately, knowingly breaking the law. But even that is eclipsed by the simple and horrible fact that we do not impose penalties on individuals.

Without justice, how we expect people less favored than bank executives to believe in the law?

James Pilant

Why JPMorgan May be Getting off Easy

In a criminal investigation, JPMorgan Chase is facing action from federal authorities who suspect that the bank turned a blind eye to Madoff’s Ponzi scheme. That’s yet another headache in a week of migraines for America’s largest bank; last Friday JPMorgan Chase reached a tentative $13 billion settlement with federal prosecutors for its alleged manipulation of mortgage securities, which helped trigger the Great Recession. There may be more pain to come as the megabank faces litigation on a number of fronts.

And JPMorgan Chase is not alone – it is one of several banks being investigated by the government for mortgage fraud. While many headlines in the financial press accuse the government of conducting a witch hunt, Pulitzer Prize-winning New York Times columnist Gretchen Morgenson offers a different perspective: “If the Justice Department were being tough on Wall Street they would be talking about bringing criminal cases against individuals who helped to perpetrate this immense crisis.” she said. Morgenson adds that the investigations into JPMorgan Chase show that it and many other financial institutions are still ‘too big to fail,’ which means taxpayers could once again be forced to bail them out.

From around the web.

From the web site, Democracy Now!

Austerians Create Unemployment


Two Standards of Justice
Two Standards of Justice

Austerians Create Unemployment

Austerity Has Cost The U.S. Economy 2.2 Million Jobs: Study

Austerian doctrine states that if we can get the deficit down even during periods of economic slowdown and massive unemployment, we shall see an economic upturn. So far this hasn’t happened anywhere on earth. (There are some claims that two former states of the Soviet Union have done okay with it. I don’t believe that. If you want to, that’s okay. It’s just that I don’t go to the former Soviet Union for my economic data.)

But they have managed to move the economy. Their philosophy has resulted in the destruction of 2.2 million jobs and that’s only in the United States. Ideas move the world, and here we have solid evidence that bad ideas can move the world in the wrong direction.

James Pilant

The Real Cost of Austerity

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The Subprime Crisis Explained (via You Tube from Meta View TV)

This is a graphed presentation of the mortgage crisis as it unfolded in 2007. I very much enjoy the graphed presentation as you can see the amounts of investments and their loss rate as time goes by. This crisis is still important because it is a key event in the creation of our current economic difficulties, the so called “Great Recession.”

James Pilant

Nothing Personal (via The Local Crank)

Apparently being Un-American is not a matter of disagreeing with an energy company. A major corporation, Conoco Phillips, has discovered what makes an American and what does not.

Their conclusion runs as follows – If you oppose government subsidies for oil companies you are Un-American.

Conoco Phillips under intense questioning before Congress refuses to retract or apologize for this statement which by the way is in one of their press releases.

I would imagine it only makes sense to the company. They apparently consider the well-being of the company, profitability, to be an American value.

I believe that large multinational corporations believe that the United States serves to advance their interests and has no other purpose worth noting. Their adamant refusal to pay taxes, their attacks on public expenditures, their desire to speculate rather than creating value, their contempt and hatred for American workers and their unceasing efforts to turn the government into a subsidiary all point to a certain state of mind.

A bystander might consider a company that preaches free enterprise at every opportunity and yet makes a considerable portion of its profit from government subsidies might be at the least considered hypocritical or at the most, Un- American.

James Pilant

Nothing Personal ConocoPhillips thinks people who criticize their continued consumption of tax subsidies in the face of record profits are “un-American,” but they don’t think you should take it “personally.”  That’s fine, because I happen to think ConocoPhillips CEO Jim Mulva is an ignorant pissant who runs on all fours, lusts after little boys, howls at the moon and pisses in the corner.  But don’t take it personally, Jimbo. … Read More

via The Local Crank

Michigan Kills Democracy, FDA Kills Babies (via Consciously Evolving Our Planet)

Anger and a lot of it.

I’ve been watching it now for years. But I’ve noticed changes in the past few weeks. Generally, I would see tea partiers or the like raging against the government. Now I’m seeing regular bloggers more and more often. They are outraged. They are disgusted. They want something to change.

We’re crossing some kind of line here in America. I don’t understand what’s happening. I can’t help but believe that something is.

This article is well written and thoughtful. You should read it.

James Pilant

In the three years of the Great Recession, more than 5 million families have lost their American Dream. Through foreclosure or short sale, another 6 million face the same fate during the next 3 years. As more than 10% of us endure this particular type of “homelessness”, with its anxiety, shame, and loss, no one has gone to jail. The few who protest openly are mocked or ignored. Corporate profits are at record levels, driven primarily by the incre … Read More

via Consciously Evolving Our Planet