During the almost five years since the financial system imploded, not one of the executives of the megalithic brokerages/banks that brought hardship and disaster to millions has gone to jail, or even been prosecuted.
September 15 will mark the fifth anniversary of the bankruptcy of the global financial giant Lehman Brothers, toppling the house of cards it and other Wall Street firms had built playing fast and loose with sub-prime mortgages, derivatives and other esoteric financial instruments.
Almost overnight, the worldwide economy went into free fall, trillions of dollars in equities, retirement funds, and personal savings vanished into thin air, nearly 9 million people were dumped on the unemployment scrap heap, millions more lost their homes, businesses went belly up, and the specter of another Great Depression haunted America.
Analysts have estimated these mortgage-based derivatives amounted to three times the value of the entire global economy.
Many of the high-flying Wall Street culprits survived, compliments of massive infusions of basically free taxpayer loans from the U.S. Treasury, although they suffered (?) temporary reductions in yearly bonuses that, in some cases, had topped $100 million or more. “Too big to fail” became the mantra in Washington.
Now, almost five years later, they’re making out like gangbusters again, thanks to hundreds of billions of dollars in government bailout money, Fed policy that has kept interest rates near zero — in effect, near-free money — and huge profits.
And during the time since the financial system imploded, not one of the executives of the megalithic brokerages/banks that brought hardship and disaster to millions has gone to jail, or even been prosecuted — “Too big to jail” apparently the policy of a Justice Department that has steadfastly refused to launch prosecutorial action against any of those involved. Even the puny fines that have been levied posed no hardship to the CEOS involved, since they usually didn’t personally have to pay; rather the money came from company funds, with shareholders in effect picking up the tab.
Who knows how many working class homeowners lost their jobs, were booted out of their foreclosed homes by sheriff’s deputies, ended up in debtor’s court, or even jail, while those responsible for the chain of circumstances went scot free?
Almost all of the institutions responsible for the flood of sub-prime mortgages were not subject to federal mortgage laws/regulations. Derivatives were unregulated, free of any oversight, supervision, or reserve requirements. And thanks to hundreds of millions spent in lobbying Congress and other powerful officials for deregulation, federal oversight of the banking industry had become little more than a toothless tiger, so many commercial banks had jumped on the sub-prime gravy train.
In what can only be irony personified, a recent public non-violent demonstration at the Department of Justice by members of housing advocacy groups calling on Attorney General Eric Holder to initiate prosecutions of those responsible for the mortgage crisis, resulted in 27 people being arrested. Some even got painful Taser jolts.
In contrast, "Five years after Wall Street crashed the economy,” the protesters said in a statement, “not one banker has been prosecuted for the reckless and fraudulent practices that cost millions of Americans their jobs, threw our cities and schools into crisis, and left families and communities ravaged by a foreclosure crisis...”
First quarter 2013 bank profits hit all-time record levels, which will likely be reflected in pay/bonuses if that trend holds through the year. Much of that profit has come from new and higher fees imposed on customers, millions of whom are still trying to dig their way out from under the losses they’ve suffered in order to keep “too big to fail, too big to jail” brokers/bankers from having to pay the piper.