Third World America - Arianna Huffington [58]
Bank of America agreed to pay a $33 million fine to the SEC but—you guessed it—admit no wrongdoing.122 A heroic U.S. district judge, Jed Rakoff, refused to rubber-stamp the deal, which he called a breach of “justice and morality” that “suggests a rather cynical relationship between the parties.”123 The SEC and Bank of America came back with a $150 million settlement.124 The judge said he was forced by judicial restraint to accept the new deal, but did so reluctantly.125 “While better than nothing, this is half-baked justice at best,” Judge Rakoff said.
The total amount of fines levied by the SEC in 2008 was the lowest since the corporate scandals of 2002 led to stricter enforcement regulations.126 So while the financial system was on a fast track to collapse, the SEC was taking its hand off the brake. And even now the perpetrators of that near-collapse are avoiding accountability. When crimes are uncovered and the culprit is allowed to simply move on without even acknowledging that a crime was committed, that’s a recipe for anarchy—not for a healthy democracy.
It’s really not that complicated: If you do the crime, you do the time. But the people who run the show like to make it seem like it is very complicated—all the better to obscure the simple moral principle of right and wrong. Why should it matter whether you commit your crimes in a boardroom or on the street? You should have to admit wrongdoing when you’re caught and pay a commensurate penalty. If that means jail for the street crime, it should mean jail for the boardroom crime.
Of course, it’s not just our too-big-to-fail banks that have been allowed to do wrong without having to admit any wrongdoing. The pharmaceutical, mining, oil, and health-care industries have been doing the “pay the fine but admit nothing” dance for years—chalking up the millions (and sometimes billions) in penalties as the cost of doing business.
But with corporate America earning major profits and middle-class America struggling to stay afloat, now is a very good time to revoke the “Get Out of Jail Free” card those at the helm of these companies have been given for far too long.
“WHO COULD HAVE KNOWN?”
Three weeks after the Deepwater Horizon rig exploded in the Gulf of Mexico, BP finally released underwater video showing a massive column of oil gushing out of a broken pipe a mile below the surface.127
Watching the unrelenting geyser-like spew, it struck me as an inverse visual metaphor for the plight of America’s middle class: While the thick black oil was being pushed inexorably upward, hour after hour and week after week, the quality of life for tens of millions of hardworking Americans is being pushed inexorably downward—month after month after month. And our leaders watch them both, either wringing their hands or waving them in anger and frustration.
When the oil spill first happened, it seemed troubling but nothing to be too concerned about. Within a week, Obama administration officials were describing it as “a very grave scenario” and “potentially … very catastrophic.”128 In other words, it was much worse than we thought it would be. Has there been a crisis in the last decade that turned out to be better than we thought it was going to be?
We are still fighting two wars that were going to be cake-walks but have now lasted nine years and seven years—much worse than we thought it would be.
Katrina looked like it could be bad but—even though there were plenty of people warning about a Category 5 storm breaching the levees—the devastation ultimately was much worse than we thought it would be.129
Warnings were issued about the housing bubble that was fueled by the Wall Street casino. Even though we now know that people in the Fed were forecasting big trouble ahead as early as 2004, the warnings were ignored—and when the bubble burst in 2008, it was much worse than we thought it would be.130
The foreclosure crisis hit hard in 2009. But the government promised to protect homeowners … so