Business Week is describing how the people who brought you the Financial Meltdown are now busy siphoning off Meltdown Bailout money. See here the old/new SubPrime Wolves. And this is not the only occurrence. The NYTimes cites how badly depleted the FBI has been to fight white collar crime – and despite warnings and requests for more resources from 2004 on, the Bush Administration instead cutback FBI White-Collar-Crime staff – it has been an almost an open invitation for Financial Grifters.
White Collar Crime Gets Off Scott-Free
The fundamental problem the USA is having throughout this financial meltdown is that White Collar Criminals are consistently getting of scott-free. Take the rating agencies like Moody’s or Standard and Poors that put their triple AAA ratings on hundreds of billions of dollars of bogus debt and then only revalued them when that bad debt was blowing up in people’s faces. For example, only in the summer of 2007, after collecting sumptuous rating fees, these agencies finally reversed themselves and demoted in unprecedented fashion and dollar volumes some of these instruments to near junk status. Any move to indict, investigate or even regulate these most tainted advisory agencies ? None so far.
Its as if the tired old “who could have connected the dots” excuse used by the Bush Administration for ignoring the clear signals of an Al Qaeda attack on the US was being reused – “who could have predicted that such risks all would go bad”. Well first, the heads of so many investment banks and hedge funds are paid 1200 times the average wage of$40,000 in the US precisely because they never make financial valuation mistakes like the ones they have been making over the past few years. Second, there is a clear delineation of some of the people who were calling foul and waving red flags over the financial status quoin this Portfolio magazine story. Just like prior to 9/11, there were lots of signals that a Financial Train Wreck was upcoming. And finally, there is the crude and crass denouement on Citi and other bankers here and here that is so compelling and disillusioning. Fiduciary Trust be damned – these guys were no less than grifters and scoundrels tied to their various personal money-making machines.
Will BiPartisan Support Be Traded for Blanket Dispensation/Pardon to Financial Community
One notion that has been discussed is that in order to get co-operation from the financial community to get past the Financial Crisis, the incoming Obama administration will let off scott-free the very bankers and financial players that have been instrumental in causing the crisis in the first place. No indictments, no pay regulation, no tax increases, and delay on regulation of financial markets and instruments. The latter two are the holdouts that the Republicans are demanding for “bi-partisan co-operation. So the US Financiers who have tripped off a World-wide Recession and Financial Crisis of increasing fury and consequences will likely walk away Scott-free, and despite the roasting in various mags , will soon be back and active on Wall Street again.