I worked in the financial industry. I wasn't a banker but I worked with bankers, and I understood banking. I think it's possible that no bankers went to jail because what they did wasn't actually illegal. It was immoral; no question. But in order to jail somebody, there has to be a law against what they did; and you have to be able to pin the violation on them.
Most of the financial meltdown happened because of a bunch of financial tricks and ploys, mostly called derivatives, which were invented over the preceding decade or so. Some of those tricks and ploys were explicitly not covered by the securities laws - because the finance industry's men in Congress had written the laws to exclude them from regulation. I refer you to the late Phil Gramm of Texas; a summary of his career is in this article in from the NY Times in 2008.
Further, most of the men we'd all like to see in jail are senior executives. Believe me, the way big banks operate, the men in the executive office can legitimately claim that they didn't know what the guys on the trading floor, or the loan platform, were doing. So there weren't any laws; and if there were, you couldn't pin them on the men who set the general policy that allowed the actions.
So quit blaming Obama because nobody went to jail.
Postscript: if you're interested in derivatives, you can Google them; or you can look at the blog entries I posted, back in the day, under the tag Subprime Mortgages. I wrote them up while I was watching my 401K dwindle (it came back, thank God).
For that matter, I've said all this before; see my post Finally the Truth, from October 2011.
I don't buy the "we didn't know what was going on" bullshit the banking and brokerage industry has put out.
ReplyDeleteLook at a company like Enron. It was corruption from the top down.
Are we expected to believe that the CEO's of the major brokerage houses didn't know what credit default swaps were, and how much money they were generating, and how risky they were? Come on! They knew exactly what was going on, and they let themselves be seduced by the bubble, just like everyone did.
They hurt our country deeply, and cause severe hardship far beyond the narrow little exclusive world they move in--hardships that continue today.
Their imprudence and greed were typical and mundane. And yet they were rewarded with big bonuses and they all lied under oath.
What it taught us--or reminded us of--was that ultimately these guys hold our nation hostage to a system that runs on avarice and a voracious intemperance that places us all at risk, all the time. And when it falls apart, we're left holding the bag.
We bailed Wall Street out. Our thanks? A recession and steep declines in corporate investment and domestic employment. Such a deal!
Oh, of course they knew what was going on. Do not doubt it. The pre-merger head of Countrywide really ought to be in jail. I didn't say they didn't know. I said they had set it up so they had "plausible deniability," that wonderful phrase.
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