Tag: Gretchen Morgenson

You Have To Prosecute Individuals

On By southwerkIn business ethics2 Comments
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.

http://occupyamerica.crooksandliars.com/diane-sweet/why-jpmorgan-may-be-getting-easy#sthash.lIimWj0v.dpbs

From around the web.

From the web site, Democracy Now!

Wall Street Looked The Other Way?

On By southwerkIn business ethics, Capitalism, Economic measurement, ethics, Government Failure1 Comment

In an article written for the New York Times by Gretchen Morgenson, she discusses what major investment banks did after they discovered that many of their loans were going south.

The answer is brief, they kept the ball rolling. The profits were too good and the risks (for them) were to low for them to back out.

This is a quote from the article citing a remark from Massachusetts Attorney General Martha Coakley, as follows -“Our focus has been on the borrower,” she said in an interview last week, “but as we’ve peeled back the onion we’ve gotten the picture of the role Wall Street played through the financing of these loans.”

This is Gretchen Morgenson on a program called “Dialogue.” Here she explains in some depth her views on the financial crisis (28 minutes).

This is capitalism run off the tracks. Greed out weighed simple good judgment. Obvious signs of trouble, not just obvious but certain evidence of approaching disaster, were ignored as money piled up.

The market was supposed to be self regulating. Read a little Milton Friedman. This economic freedom to innovate was supposed to lead to better lives for all Americans, perhaps the whole world. This utopia, this nirvana, has thus far failed to appear. But incomes in a handful of the well placed are measured in the billions.

Justice is not coming. These people are immune to justice. They go to the right churches, have the right friends and are protected by the government while that same government ignores or casts their citizenry away from the door of the statehouse or congress. The people of the United States, the hard working American who lives a moral, ethical life; their goodness counts for nothing. They will have mortgages that will find no help. They will not have jobs and when they can find no work they suffer the slings and arrows of an economic elite that claims they cannot get along with other workers and do not work, that they are lazy. That’s right, Americans, the most productive workers in the world, the ones that work more hours and more days than other workers in the entire world, they are lazy, they can’t get along, they brought this upon themselves.

Right?

James Pilant