By State Representative Chris Taylor
I’m at my third American Exchange Legislative Council (ALEC)...
The Obama Administration seems to be going more forcefully after big banks, but this is little more than a charade. The United States is asking Scotland Yard to arrest two London-based JPMorgan Chase traders who were involved in the multibillion-dollar trading loss that caused waves last year. It is also wanting a confession from the bank itself, a move that is seen by some as a departure from its lenient treatment so far of the financial sector for the mess it left us all in. “The plan to arrest the traders hints at an aggressive new stance from the government, which has come under fire for prosecuting only a few Wall Street employees tied to the 2008 financial crisis,” says the New York Times. “Taking aim at employees of a Wall Street giant like JPMorgan, even when they fall below the executive ranks, could send a warning shot across the financial industry.” One could only wish.
The two traders are near the bottom of the JPMorgan hierarchy, as a helpful chart at Huffington Post reveals. JPMorgan top execs designed the strategy that led the “London Whale” trader to take unseemly risks, “but none of these people are due for any frog-marching any time soon, various news reports suggest,” as HuffPo notes. The ability of the financial sector to evade responsibility for its various misdeeds is made even more baffling, given that they caused the Great Recession, as documented in Charles Ferguson’s Oscar-winning documentary “Inside Job” and his companion book “Predator Nation.” “What it did in the bubble and the crisis really was criminal,” Ferguson said in an interview last year. “If the criminal justice system were used properly, these kinds of things would be much less frequent and much less severe than they are in fact becoming.” Instead, all of us were left holding the bag. “The key problem in the bubble years was the ability of private actors to profit by taking huge risks in issuing and securitizing bad mortgages, while handing the downside risk to taxpayers,” Dean Baker writes in The Guardian. “This was the story with Countrywide, Bank of America, Goldman Sachs, Citigroup and the rest.” The attitude of the Obama folks toward the big banks was revealed when Attorney General Eric Holder told the Senate in March: “The size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.” When faced with a barrage of criticism, Holder backtracked, telling the House two months later, “Let me be very, very, very clear. Banks are not too big to jail. If we find a bank or a financial institution that has done something wrong, if we can prove it beyond a reasonable doubt, those cases will be brought.” But as Mark Gongloff wryly commented for Huffington Post, the Obama Administration’s “record is also very, very, very clear that not a single bank has been charged with any crime” for their role in the economic meltdown. Don’t expect the Obama Administration’s mindset on that to change. Amitabh Pal, the managing editor of The Progressive and co-editor of the Progressive Media Project, is the author of “ ‘Islam’ Means Peace: Understanding the Muslim Principle of Nonviolence Today” (Praeger).