No place for a crooked banker, say crooked banker apologists.
Over at the Beat the Press feature at the Center for Economic and Policy Research, Dean Baker
points out in the headline of his brief smackdown of Richard Cohen: "Bankers Who Commit Fraud, Like Murderers, Are Supposed to Go to Jail":
In his column in the Washington Post, Richard Cohen struggles with how we should punish bankers who commit crimes like manipulating foreign exchange rates (or Libor rates, or pass on fraudulent mortgages in mortgage backed securities, or don't follow the law in foreclosing on homes etc.).
Cohen calmly tells readers that criminal prosecutions of public companies are not the answer, pointing out that the prosecution of Arthur Andersen over its role in perpetuating the Enron left 30,000 people on the street, most of whom had nothing to do with Enron. Cohen's understanding of economics is a bit weak (most of these people quickly found other jobs), but more importantly he is utterly clueless about the issue at hand.
Individuals are profiting by breaking the law. The point is make sure that these individuals pay a steep personal price. This is especially important for this sort of white collar crime because it is so difficult to detect and prosecute. For every case of price manipulation that gets exposed, there are almost certainly dozens that go undetected.
This means that when you get the goods on a perp, you go for the gold—or the jail cell. We want bankers to know that if they break the law to make themselves even richer than they would otherwise be, they will spend lots of time behind bars if they get caught. This would be a real deterrent, unlike the risk that their employer might face some sort of penalty.
You'd have to be living in a deep cave not to know that the nation's biggest bankers behaved in that way so well described by Woody Guthrie's
famous lyric: "Some will rob you with a six-gun. And some with a fountain pen."
In other words, many of these financial operations were bandits, not bankers.
Of course, that's not news.
There's more below the fold.
If those in law enforcement who are supposed to go after bandits had allowed a gang to get away with robbing somebody of a few thousand bucks, they'd be out of a job in an instant. But stealing a few billion? That gets treated in the same manner as pointed out by Josef Stalin to Churchill at Tehran in 1943: "When one man dies it is a tragedy, when thousands die it's statistics."
No matter how big their bonus, no matter how spectacular their credentials, crooks are crooks. But as we know from Alayne Fleischmann's statements, crooks with the gold-plated fountain pens are special. As noted about her by Matt Taibbi last month:
This past year she watched as [Eric] Holder's Justice Department struck a series of historic settlement deals with Chase, Citigroup and Bank of America. The root bargain in these deals was cash for secrecy. The banks paid big fines, without trials or even judges—only secret negotiations that typically ended with the public shown nothing but vague, quasi-official papers called "statements of facts," which were conveniently devoid of anything like actual facts. [...]
The people who stole all those billions are still in place. And the bank is more untouchable than ever – former Debevoise & Plimpton hotshots Mary Jo White and Andrew Ceresny, who represented Chase for some of this case, have since been named to the two top jobs at the SEC. As for the bank itself, its stock price has gone up since the settlement and flirts weekly with five-year highs. They may lose the odd battle, but the markets clearly believe the banks won the war. Truth is one thing, and if the right people fight hard enough, you might get to hear it from time to time. But justice is different, and still far enough away.
Indeed.
And one of the reasons for justice being so far away is the role too much of the media have played when it comes to the bankers. Here's an interview from July 2013 between CNBC's Jim Cramer and JPMorgan Chase's CEO Jamie Dimon:
Jim Cramer: Shouldn't they have indicted somebody who actually did bad things in banking?
JPMorgan Chase CEO Jamie Dimon: I think if someone did something wrong, they should go to jail.
Cramer: Well, who did? Who went to jail?
Dimon: One of the great things about America, failure is not illegal or wrong. You can't just say it failed. But I do think America looked at the crisis—and this is too bad—and there was no, anywhere, Old Testament justice. What they saw is people got overpaid—and some of these people lost all their money, their reputation, all that. If someone did something wrong, they should pay. You've got to be specific. Did they do something wrong, or you just don't like the fact that they failed? You make investments. They don't always pay off. It doesn't mean you're a criminal.
Cramer: Right.
I think, Jim, the proper response was Riiiiiiiiiiiiiiiight.