Following the 2008 crisis, there was a guttural outcry from the public, demanding that the so-called “banksters” be brought to justice. Much to their chagrin, repercussions for those making the decisions that brought the economy to its knees have been few and far between. At the time, the general excuse was that, while many of these figures had made decisions that could be characterized as unethical, they were not criminal decisions in nature.
Cold comfort for those who lost everything.
But today, we have to come to terms with the fact that even when a law is broken, the banksters are still above the law. The New York Times put it simply:
State and federal authorities decided against indicting HSBC in a money-laundering case over concerns that criminal charges could jeopardize one of the world’s largest banks and ultimately destabilize the global financial system.
The response to the (justified) outrage which met this announcement was that it’s a “record” settlement. That “record” is being met by “partially deferred” bonuses for the executives of the bank. Looks like Mrs. Executive will be getting one less mink coat this Christmas. Bummer.
Welcome to the world where “too big to fail” has become “too big to govern.” If someone NOT at a bank had been found guilty of funding terrorists and drug traffickers, their indictment would be heralded as a massive victory in the expensive and frequently ineffective war on drugs. Matt Taibbi put it this way:
They’re now saying that if you’re not an important cog in the global financial system, you can’t get away with anything, not even simple possession. You will be jailed and whatever cash they find on you they’ll seize on the spot, and convert into new cruisers or toys for your local SWAT team, which will be deployed to kick in the doors of houses where more such inessential economic cogs as you live. If you don’t have a systemically important job, in other words, the government’s position is that your assets may be used to finance your own political disenfranchisement.
On the other hand, if you are an important person, and you work for a big international bank, you won’t be prosecuted even if you launder nine billion dollars. Even if you actively collude with the people at the very top of the international narcotics trade, your punishment will be far smaller than that of the person at the very bottom of the world drug pyramid. You will be treated with more deference and sympathy than a junkie passing out on a subway car in Manhattan (using two seats of a subway car is a common prosecutable offense in this city). An international drug trafficker is a criminal and usually a murderer; the drug addict walking the street is one of his victims. But thanks to Breuer, we’re now in the business, officially, of jailing the victims and enabling the criminals.
Maybe this would be easier to swallow if it wasn’t coming on the heels of shady behavior in the MFGlobal crisis, the LIBOR scandal and more. Maybe the news wouldn’t taste quite as bitter if President Obama wasn’t considering the appointment of number one bank insider Jamie Dimon as Treasury Secretary. But the track record on justice for those involved in financial services is just disheartening. Sell exotic mortgages to unqualified people? Engage in illegal robo signing of mortgage documents? Manipulate the main rate (LIBOR) many bank products rely on to set their own lending rates? Bundle junk mortgages at the request of a hedge fund who is shorting them and turn around and sell them to your other customers? Launder Mexican drug cartel money to the tune of $9 billion? No big deal – just have a checkbook ready, and you’ll be free as a bird. And we wonder where the vitriol in movements like Occupy Wall Street comes from…
The point is, this is a blatant and nauseating show of preferential treatment to the benefit of banksters once again. And there’s no way to sugar coat it.