John Eby: Skewed values enable Wall Street, begrudge teachers $48,000Published 11:39pm Monday, February 28, 2011
I’d call it a blatant double standard. Financial crooks who brought the world economy to its knees not only won’t go to jail, but their federal government protects them rather than prosecutes them. What seemed like every major bank and financial company on Wall Street was embroiled in an obscene criminal enterprise that impoverished millions and wiped out trillions of dollars of wealth. Then they had the audacity to take time out from counting their loot to come to the very taxpayers they destroyed, cup in hand, for bailouts which sent them back on their merry, very profitable, way.
The Securities and Exchange Commission (SEC), which employs a reported 1,100 investigators, waited until the statute of limitations expired to even question Morgan Stanley chief John Mack about insider trading.
Wall Street regulation is such an oxymoron, we could dent the deficit by disbanding the laundry list of public and quasi-public agencies tasked with getting the ball rolling on investigating financial crime that seem too inbred to function. I’ve heard of the Federal Reserve and FDIC, the Federal Deposit Insurance Corp., but not the Office of the Comptroller of the Currency (OCC) or the Commodity Futures Trading Commission (CFTC). Besides insider trading, the SEC keeps an eye peeled for “disclosure violations,” making sure publicly-traded companies release financial information grounded in reality. But it lacks prosecutorial power, so cases get referred to the Justice Department. In reality, SEC Manhattan referrals frequently end up in the U.S. Attorney’s Office for the Southern District of New York, where future Mayor Rudy Giuliani made his name.
The justice system not only fails to punish financial criminals, but evidence suggests it has evolved into providing protection independent of politics or prevailing ideology. After all, the cozy bureaucracy is on a first-name basis with its targets.
The result is a class of non-jailable perps and a dysfunctional system dedicated to rooting out criminal responsibility only to expunge it from the accused.
Hot pursuit by the SEC has been compared to O.J.’s search for the real killers.
Remember Sunbeam and swaggering CEO Al “Chainsaw” Dunlap? The SEC meted out a $500,000 fine for a guy with an estimated worth of $100 million.
Barred from ever running a public company again meant retiring on his remaining $99.5 million, plus royalties from his memoir, “Mean Business.”
Is it any wonder Wall Street execs feel emboldened and entitled? These chums switch sides more often than members of Congress swinging through the revolving door to become lobbyists in the private sector.
The system’s so corrupt that firms like Goldman Sachs and AIG regard the SEC as their Justice Department intermediary, negotiating fines that will exempt them from jail time. Banks already had the upper hand by top talent hiring on with corporate law firms over the mismatched government. I’m not looking at this sleazy swamp through a partisan lens, either.
President Obama’s top private campaign contributor? Goldman Sachs. A Citigroup executive headed his economic transition team. His new chief of staff came over from JP Morgan Chase.
Then turn on your TV to see where revolution is fomenting today. Study the screen for several seconds to determine whether protest signs nodding angrily are in the Mideast or Midwest.
It’s easy to see why conservative Gov. Scott Walker can look over from third base, certain he stroked a triple, even while he’s getting punked on the phone by a bogus billionaire.
The average Wisconsin teacher makes $48,000 a year, which is a Who even Horton couldn’t hear compared to the clanging of a record $135 billion in pay and benefits Wall Street fat cats gorged on last year.
So what does the government go after? Washington spent $5 billion deporting 393,000. Along the Mexican border at least, felony immigration prosecutions jumped 77 percent; non-felony prosecutions by 259 percent.
The real agenda is crushing unions (and the Democratic Party) once and for all so the GOP can run the table with impunity.
Of the top 10 campaign contributors, seven support conservative causes and three, all unions, back Democrats.
“Bust the unions, it’s over. To pretend that this is about a fiscal crisis in Wisconsin is malarkey,” said Shepard Smith. On Fox!
“I hope he keeps his job,” remarked former Gov. Jennifer Granholm on MSNBC.
The GOP (O stands for overreaching) released an attack ad about Obama’s subservience to his “union bosses,” although White House Press Secretary Jay Carney characterized it more charitably as “standing with America’s working men and women and America’s middle class.” Granholm said, “Unions represent the little guy and the ability of janitors in the Capitol to band together to be able to have some strength in negotiating. When you think about the income disparity in this nation — this growing chasm where the middle class used to be — it’s no wonder why everyday citizens are supporting the right of these workers to band together. I think (Republicans’) ad is going to backfire. It sounds again like the Republicans are standing on the side of billionaires rather than everyday citizens.”
“As governor of Michigan,” Granholm said, “we cut more out of state government than any state in the country with partnership with the unions. Yeah, we had to go to the table and, yeah, we had to negotiate concessions. It was the unions who came to us and said, ‘We’ve got to stop these no-bid practices. We’ll help identify contracts that are wasteful.’ They helped identify $1.1 billion worth of savings in Michigan. To vilify the people who could be coming to you with savings is a completely lazy and wrong-headed way of doing business.”
Even when taxpayers had stakes in the big banks, remember the howl that went up at the proposal to cap salaries at half a million? Why, they risk a “talent drain” absent those obscene compensation packages, even if they were being rewarded for running their own companies into the ground.
The same argument has been noticeably absent in the berating of cops, firefighters and teachers and other bottom-feeders who make 3.7 percent less than those in comparable private-sector banking jobs. In this new gilded age, avid about avarice, our priorities are skewed by plutocrats who treat Congress like their wholly owned subsidiary for campaign contributions little guys can’t match.
John Eby is Daily News managing editor. E-mail him at email@example.com.