Recently a libertarian friend remonstrated about why progressives think the capitalist system should be tinkered with to make it work better. Doesn’t it already work just fine? Why can’t we just hold the bad guys and gals accountable?
Well, let’s check the score card on sticking it to these bad guys. Recently the Wall Street Journal ran an eye-popping article titled: 7 Years, 156 Cases, Few Convictions.
In four out of five cases against large Wall Street banks, no employees were charged. It is a rarity when proceedings have been brought against individual employees. Most especially, the government is not winning, often, when charges are filed. This is why.
For starters, they say, much of bank conduct associated with the financial crisis was not actually illegal. Even when proven, usually it can’t be linked directly to the banks’ top brass.
A recent study by a law professor looked at all kinds of corporate settlements with the Justice Department, pre-recession. He found individuals were charged in about one-third of the cases. Known as deferred prosecutions, therefore two-thirds were not even charged. More recently, however, the charge rate has fallen dramatically, from thirty-three percent, to just five percent in 2015. How disheartening!
In one successful prosecution the Journal cited, a former UBS Group AG employee went to prison for bid rigging tied to municipal bond trading. According to his attorney, however, he was doing his job in good faith, when the Justice Department criminalized something that previously had not been treated as criminal activity.
Well, there you have it. The American economy isn’t working very well and the strategy of “Jail the Bastards“ isn’t working at all. Of course the American public fumes. Why can’t the miscreants be held accountable?
Talk radio extremists rage against Barak Obama and his Justice Department, as corrupt and incompetent. I doubt this is valid criticism, however. More likely, these folks doth protest too much against the realities of modernity, which too often their followers neither accept nor understand.
In the center and on the left, the criticism looks more like malaise. These folks are frustrated; profoundly frustrated. What should America do next?
What do you think? Is anyone in power really listening?
Perhaps there may be a way for the Republic to work our way out of this madness…maybe. More to come.
As a rejoinder to my libertarian friend, I say this. We the people must face reality. Reality is that crucial aspects of American capitalism are producing increasingly dysfunctional outcomes, with fraudsters walking away with fat bank accounts. This problem ain’t gonna go away by reliance on same-old, same-old, and Americans know this in our guts. Why the out-sized political showing for Donald Trump and Bernie Sanders?
From Boulder, Colorado, this is Jim Sawyer for Capitalism in Crisis.