I'm gonna repost an article by a fellow named Karl Denninger, who's been following the economic situation (and heavily criticizing our responses to it, i.e. bailouts and the like) for some time:The Market Ticker
So Obama said the other day that "What Wall Street did was immoral, but it wasn't illegal" in response to a question about why nobody had gone to jail.
Really Mr. President? None of the following is illegal?
* Laundering drug money. Wachovia admitted to doing it in court. They got a "deferred prosecution agreement" and not only did nobody go to jail nobody other than a few bloggers like myself raised hell about it until days before that agreement expired. Then, magically, it got news coverage. This is a clear black-letter felony; where are the handcuffs?
* The former chief risk officer for Citifinancial testified under oath before the FCIC that the company knowingly sold loans on to investors that did not meet their quality guidelines and published claims. In fact, he testified that by 2007 80 percent of those loans were defective. This is functionally identical to selling you a car and rolling back the odometer, peddling tainted medicine or selling melamine-laced baby formula. There is nothing complicated about this and there is under-oath testimony establishing that it was not an accident or an "error in judgment" as it continued for more than a year after it became known and was the subject of internal memos to corporate officers. This is not my conjecture or analysis, it is factual sworn testimony before a government body. Where are the damned handcuffs?
* Ponzi Schemes generally. Those are all illegal. They locked Charlie up for it (the originator of the name, natch) and more recently Bernie Madoff went to prison. Ok, Mr. President, how about all the stock analysts, the market callers, and pension fund managers along with the real estate industry that have been pumping 8, 10 or 11% annualized returns for the last three decades? These claims are all pyramid schemes and thus by the very definition of such a scheme are illegal. An 8% "annual return" for 45 years, the average working man's period of effort (20 to 65) produces a return of nearly 32 times the original amount invested. The 9% growth rate of medical cost over the last year (close to the premium increases over the last decade in annualized terms) for the person of age 50 that the government claims "will not see their Medicare harmed" has the annual cost of their medical insurance (assuming no increase due to age or greater risk) go from $5,000 a year to $100,000 by the time they're 85! The claims of Realtors that home prices would go up 10% "for the indefinite future" turns a $150,000 house into a $4.21 million house in 35 years. None of this was ever going to actually happen, and it still won't. Why did Charles Ponzi and Bernie Madoff go to prison when your administration, every member of Congress, those on Wall Street and otherwise in the "finance and investment" business community have not for the exact same offense?
* Jefferson County Alabama jailed several politicians and others for bribery and other crimes related to the infamous "sewer bond" nonsense. Why have no bankers gone to prison? It takes two people to commit bribery and similar offenses - someone who offers a bribe, and someone who accepts a bribe. One party went to prison while the other did not. No crimes in this case among the banksters? Pull the other one Mr. President; the damage here remains in that the water bills of these residents remains at ridiculously elevated levels as the financial harm done to the county was not forcibly returned from those banksters.
* Perjury is a felony in most circumstances. Banksters admitted to more than 100,000 instances of it by withdrawing perjured ("robosigned") affidavits. Just as with the testimony under oath in the case of Citifinancial, just as in the Wachovia admission of drug money laundering, in this case the violation of the law is clear. Perjury can only be cured at "no penalty" up until it is clear that the defective statement or filing will be discovered; once you're "caught" you cannot avoid liability by withdrawing the filing. Whether someone was paying their mortgage or not is immaterial as to whether filing a false affidavit is a criminal matter -- it is. Again, where are the damned handcuffs?
* Sarbanes-Oxley criminalized false accounting statements. There have been multiple bank failures by public companies that filed balance sheets under penalty of criminal prosecution were they to be false just weeks before they blew up -- balance sheets that showed perfectly-healthy institutions. The FDIC has documented dozens of bank failures, privately-held and publicly-traded, where those balance sheets were proved factually false, as the losses have been 20, 30, 40% or even more just a few weeks later. It is beyond comprehension that the assets in question could have actually lost 30 or 40% of their value within that period of time. The only rational explanation is that these financial statements were a work of fiction. Sarbanes-Oxley makes this a criminal matter. Again, where are the handcuffs?
I and many other bloggers and "alternative media outlets" have spent four years documenting these outrages and showing through simple mathematical analysis that the claims made by these charlatans, including yourself Mr. President, are mathematically impossible. That's the definition of a pyramid scheme. They're illegal because they cannot, mathematically, work. It is therefore illegal to hawk them to the public because they are by definition abusive; they will ultimately result in those who believe in them losing their money.
Your claim, Mr. President, that these acts were "morally repugnant but not illegal" is a lie. The simple fact of the matter is that your administration is intentionally refusing to enforce long-standing law and by doing so you and your administration have lent official support to an organized effort to defraud and rob the American public.
However, any message of this kind coming from OWS is being drowned out by calls for 'free health care' and 'guaranteed jobs' and 'debt forgiveness'. The 'message' - if you can call it that, since the whole 'movement' is a cluster of disparate interests, saddled together by the backing of leftists and unions - a continuation of the 'something-for-nothing' mentality that has been fostered for years by the political and bureaucratic Eloi who keep trying their damnedest to stave off the consequences of their own policies.
_________________Quote of the Moment
Forget constructive dialog, debate or differing points of view; from now on I think we should all just throw shoes whenever we disagree with somebody. That's what civilized, responsible people do. Eat shoe, political detractors!