from the Working Life blog:
Why Aren't They In Jail?by Jonathan Tasini
Friday 04 of September, 2009
Posted to Front Page Posts
I often ask the question: why aren't more of the bankers and Wall Street financiers going to jail for the financial collapse they created with their manipulations and thirst for greed? Not only are they not serving time, but they still have their jobs--while millions of others lost their jobs because of the bursting of the financial bubble.
Now, you may think my musings about the need for justice are not shared outside a particular line of political thought. But, today, a main columnist of the Financial Times, Gillian Tett, asks the same question:
How many financiers do you think ended up in jail after America’s Savings and Loans scandals? The answer can be found in a fascinating, old report from the US Department of Justice.
According to some of its records, between 1990 and 1995 no less than 1,852 S&L officials were prosecuted, and 1,072 placed behind bars. Another 2,558 bankers were also jailed, often for offenses which were S&L-linked too.
Those are thought-provoking numbers. These days the Western world is reeling from another massive financial crisis, that eclipses the S&L debacle in terms of wealth destruction.
Yet, thus far, very few prison terms have been handed out. For sure, there have been a few high-profile dramas. Bernie Madoff is one, obvious, example.
But one reason why the Madoff drama has grabbed so much attention and already sparked a slew of books this month, is precisely because there are precious few other financiers behind bars, or facing momentous fines. Compared to the S&L days, the level of retribution so far seems almost non existent.
And:
But, on the other hand, if there is no retribution against financiers, it will be very difficult to force a real change in behaviour. After all, no amount of twiddling with Basel rules or pious statements about bonuses will ever scare a financier as much as the thought of jail.
Moreover, without some retribution it will also be hard to persuade voters that finance is really being reformed, or has any credibility or moral authority. That is bad for politicians and regulators. However, it is also bad for bankers too. So, in the months ahead, keep a close eye on what happens to the legal cases in the system and, above all, watch to see just how many do (or do not) quietly die, compared to those S&L days.
I added the emphasis. This is the key. How do you ask people to get involved with a political system that people think is simply rigged and won't adhere to any kind of fair play or rule of law?
http://www.workinglife.org/blogs/view_post.php?content_id=14474