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Another Nobel Economist Says We Have to Prosecute Fraud Or Else the Economy Won't Recover
As economists such as William Black and James Galbraith have
repeatedly said, we cannot solve the economic crisis unless we throw
the criminals who committed fraud in jail.
And Nobel prize winning economist George Akerlof has demonstrated
that failure to punish white collar criminals - and instead bailing
them out- creates incentives for more economic crimes and further
destruction of the economy in the future. See this, this and this.
Nobel prize winning economist Joseph Stiglitz just agreed. As Stiglitz told Yahoo's Daily Finance on October 20th:
This
is a really important point to understand from the point of view of
our society. The legal system is supposed to be the codification of our
norms and beliefs, things that we need to make our system work. If the
legal system is seen as exploitative, then confidence in our whole
system starts eroding. And that's really the problem that's going on.***
A
lot of the predatory practices in automobile loans are going to be
able to be continued. Why is it OK to engage in bad lending in
automobiles and not in the mortgage market? Is there any principle? We all know the answer to that. No, there's no principle. It's money. It's campaign contributions, lobbying, revolving door, all of those kinds of things
***
The system is designed to actually encourage that kind of thing, even with the fines [referring to former
Countrywide CEO Angelo Mozillo, who recently paid tens of millions of
dollars in fines, a small fraction of what he actually earned,
because he earned hundreds of millions.].***
I
know so many people who say it's an outrage that we had more
accountability in the '80's with the S&L crisis than we are having
today. Yeah, we fine them, and what is the big lesson? Behave badly, and
the government might take 5% or 10% of what you got in your ill-gotten
gains, but you're still sitting home pretty with your several hundred
million dollars that you have left over after paying fines that look
very large by ordinary standards but look small compared to the amount
that you've been able to cash in.So the system is set so that even if you're caught, the penalty is just a small number relative to what you walk home with.
The
fine is just a cost of doing business. It's like a parking fine.
Sometimes you make a decision to park knowing that you might get a fine
because going around the corner to the parking lot takes you too much
time.***
I
think we ought to go do what we did in the S&L [crisis] and
actually put many of these guys in prison. Absolutely. These are not
just white-collar crimes or little accidents. There were victims. That's
the point. There were victims all over the world.***
So
do we have any confidence that these guys who got us into the mess
have really changed their minds? Actually we have pretty [good]
confidence that they have not. I've seen some speeches where they said,
"Nothing was really wrong. We didn't get things quite right. But our
understanding of the issues is pretty sound." If they think that, then
we really are in a sorry mess.***
There are many aspects of [deterring people from committing crime]. Economists focus on the whole notion of incentives.
People have an incentive sometimes to behave badly, because they can
make more money if they can cheat. If our economic system is going to
work then we have to make sure that what they gain when they cheat is
offset by a system of penalties.And that's why, for
instance, in our antitrust law, we often don't catch people when they
behave badly, but when we do we say there are treble
damages. You pay three times the amount of the damage that you do.
That's a strong deterrent. Unfortunately, what we've been doing now, and
more recently in these financial crimes, is settling for fractions –
fractions! – of the direct damage, and even a smaller fraction of the
total societal damage. That is to say, the financial sector
really brought down the global economy and if you include all of that
collateral damage, it's really already in the trillions of dollars.But
there's a broader sense of collateral damage that I think that has not
really been taken on board. And that is confidence in our legal
system, in our rule of law, in our system of justice.
When you say the Pledge of Allegiance you say, with "justice for all."
People aren't sure that we have justice for all. Somebody is caught for
a minor drug offense, they are sent to prison for a very long time. And yet, these so-called white-collar crimes, which are not victimless, almost none of these guys, almost none of them, go to prison.
***Let
me give you another example of where the legal system has gotten very
much out of whack, and which contributed to the financial crisis.In
2005, we passed a bankruptcy reform. It was a reform pushed by the
banks. It was designed to allow them to make bad loans to people to who
didn't understand what was going on, and then basically choke them.
Squeeze them dry. And we should have called it, "the new indentured
servitude law." Because that's what it did.Let me just tell you
how bad it is. I don't think Americans understand how bad it is. It
becomes really very difficult for individuals to discharge their debt.
The basic principle in the past in America was people should have the
right for a fresh start. People make mistakes. Especially when
they're preyed upon. And so you should be able to start afresh again.
Get a clean slate. Pay what you can and start again. Now if you do it
over and over again that's a different thing. But at least when there
are these lenders preying on you should be able to get a fresh start.But they [the banks] said, "No, no, you can't discharge your debt," or you can't discharge it very easily.
***
This is indentured servitude.
And we criticize other countries for having indentured servitude of
this kind, bonded labor. But in America we instituted this in 2005 with
almost no discussion of the consequences. But what it did was
encourage the banks to engage in even worse lending practices.***
The
banks want to pretend that they did not make bad loans. They don't
want to come into reality. The fact that they were very instrumental in
changing the accounting standards, so that loans that are impaired
where people are not paying back what they owe, are treated as if they
are just as good as a well-performing mortgage.So the
whole strategy of the banks has been to hide the losses, muddle through
and get the government to keep interest rates really low.***
The result of this is, as long as we keep up this strategy, it's going to be a long time before the economy recovers ....
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Gdub, i admire your tenaciousness and i really hate to say this, but if you are hoping for any sort of justice in the traditional sense to this mess, there's a strong chance that you are going to be profoundly disappointed. the fraud is too deeply embedded into the core of the current operating system. everyone in power, present & past, would be implicated. EVERYONE.
are you willing to give up your sovereignity (or what's left of it) for justice? cuz that may be the only way you're going to get any & even then it may be cloaked in cruel irony.
otherwise, every present & future law-abiding american citizen is going to have to pay for the crimes committed in our names. this is what QExx is all about no? (suck it up bitches) welcome to freedom & the rule of law. that's what we get for not taking responsibility when we had the chance i guess.
now it's a little too little, too late. the die is cast. and we should not allow ourselves to be taken down with them into the chasm. time to catapault as my man kevin above says.
don't mean to be so negative, but there's a time to let it all go and have no expectations in the outcome. whatever happens is going to happen. focus on the micro & let the macro take care of itself.
Image: AP
Today's chaos in Greece involves firefighters brawling with riot police to protest impending layoffs.
Meanwhile the radical left has planted bombs around the country, which police are defusing in Hurt Locker-style bomb suits.
Ironically or intentionally, all of this is bound to eviscerate Greek GDP.
Violent riots are also occurring today in Ireland and France due to similar austerity measures.
Read more: http://www.businessinsider.com/greece-photos-firefighters-clash-with-police-2010-11#ixzz14Mlhc665 . http://www.youtube.com/watch?v=AbH1JsOTInk&feature=player_embedded
So much detail. Look back to see the future in slowmo. Spain had their inquisition. Then the Armada. Wonder what all the 3 or 4G would have looked like 8 years later - right before the fall.
And one of the goonzi 3 stooges of rating agencies in bed with our banksters now cries the chit stinks!!?? BSing of the MBSing! Take'em all out for a new rope factory tour under the guise of western justice system!! Let God sort out the rat basturds!! Besides that I think the goonzi paper crowd is a swell bunch of piled up chit!! How ya goon-a stop that kind'uv regime fraud!! Let the wicked slay the wicked and me thinks it begins with banksters in empty bullion vaults trying out a head shot with pearl handled smith & wessons!! 3 head shots will be suicided suspected no doubt!!
I'm working on another pictorial post, about the rule of law:
Until the hole is plugged, nothing they do will work. Everything they throw at it will be lost.
sinkholes opening up everywhere...an apt metaphor:
http://www.youtube.com/watch?v=YZFTJuXzjzY
You write good stuff george!! Now let us make good trade!! I think with F*dic'n FRYday; 11/5-5 fed goon Jekyll Island mtging, goonzi20 finance ministers boarding flights to Seoul as I type, in conjunction with goon20 11/11-12; lil scamBO and other heads of state flying the coup? It appears a good weekend or certainly next 10 day window for an extended banking holiday!! Just sayin paper ponzi is what it is!!
While they all forget the lesson of George Anderson ?
Killed our friend Florence Cioffi. January 2008.
DUI in his SUV, going 60 up Water Street. Admitted the crime and got tested in hospital for the booze. Did a couple weeks in Rikers.
These people can kill. Walk off. $500 fine too.
US Gubmint-owned StuyTown apartments, 11,000+ units in Manhattan, could be converted into a nifty white-collar prison for all these fraudsters.... http://www.observer.com/files/full/StuyTown_001_0.jpg
...i don't need any nobel whatever lecturing me on the values of humanity...and for him and the others to speak out now only convinces me more of how they have been and continue to be the cowards that they are...hiding behind speeches and applause and the fake recognition that they accept is itself a fraud all the same...my realization occurred during puberty mr./mrs. laureates and my level of enlightenment has continued to this day and shall continue evermore...i challenge you to put your asses in high gear and try to catch me if you can...the closer you get, the better the world will be.
I've got ah fevah, and the only prescription, is more QEII.
Law is not needed.
What we need is more QE.
There is lots of smoke but no fire yet in the view of the guy on the street. He has not be Glenn-Becked with a chalkboard explanation of the depth and severity of crimes. Until then, when there are calls from the citizenry, there will be nothing done. So where are the pundits when needed? I see that Ratigan is hot on the trail, but it'll take media on both sides of the political spectrum to instigate the masses for retribution. I'd say the crooks have 2 choices: 1. Fess up and face the music for a couple of years in min-security "prisons" where they can play a few rounds of gold a day, or 2. Face a crowd of angry citizens for a good tar-n-feather job before they get strung up like strange fruit.
There is lots of smoke but no fire yet in the view of the guy on the street
http://www.infowars.com/
75 million listeners so far
There will be no tar and feathering.
Let's remember Enron and Ken Lay.
Ken Lay walked the streets with impunity from the beginning of the Enron crises until his death from freakin' heart disease.
On more than one occasion I wondered why he had not been shot dead given the wake of destruction he cause shareholders and employees. He ruined lives and broke up families.
For crimeny freakin' sakes, what was wrong with Texans? I thought everybody and their dog was armed in the Lone Star state! They couldn't even dispense some frontier justice.
Texans are really pussies.
"For crimeny freakin' sakes, what was wrong with Texans? I thought everybody and their dog was armed in the Lone Star state!"
So that's why they ban guns up north...Mass., NY, Chicago etc...makes perfect sense now ;-)
damned right we need to prosecute, jail, and execute.....control fraud was rampant throughout the entire plutocracy - be it CONgress (barney the fag, chris dodd, pelosi), bush, obama, greenscam, bernankrupt, dimon, blankenfein, ad infinitum, ad nauseum, world without end...
prosecution must reach into the very highest echelons and stiff jail sentences and capital punishment imposed...
the people have suffered far too long under the thumbs of these sociopathic terrorists....ENOUGH IS ENOUGH...let the heavens of god almighty serve justice on these assholes...
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Training Navigators
Executive reports answer a question, presented by the customer. The Establishment experts pass the “big wave” analysis, like a hammer seeking a nail, every time, and go straight to answering the question, on the basis of mechanical statistics, SOP. Back in the day, the response always challenged the question first. The underlying question of The Imperative was “how do we track everything?” The question answered by the report was: “what do we do when the global distribution systems crash?”
The first question is digital, which is led and followed by the second question, which is analog. Largely, an increasingly robust First Amendment is the analog part of the Constitution.
From Points of Rebellion, 1969, William O Douglas, Associate Justice of the Supreme Court:
“First is the growing subversion of man to the machine. Man has come to realize that if he is to have material “success” he must honor the folklore of the corporation state, respect its desires, and walk to the measure of its thinking. The interests of the corporation state are to convert all the riches of the earth into dollars. Its techniques, fashioned mainly on Madison Avenue and followed in Washington D.C., are to produce climates of conformity that make any competing idea practically un-American…
Our colleges and universities reflect primarily the interests of the Establishment and the status quo…When the university does not sit apart, critical of industry, the Pentagon, and government, there is no fermentative force at work in our society. Then all voices become a chorus supporting the status quo; there is no challenger from the opposition warning of dangers to come. The result is a form of goose-stepping and the installation of conformity as king…Industry uses the personality tests to weed out those who are individualistic and assertive and to find those who tend to conform and who will therefore fit into the social climate of industry…
Property has assumed a different form. To the average man it is no longer cows, horses, chickens, and a plot of land. It is government largesse – farm subsidies, social security, retirement benefits, unemployment insurance, old-age pensions, medicare, and the like. Even business has a towering stake in government largesse…Moreover, the Establishment controls those agencies…The administrative office is indeed the staging ground where men are trained and culled and finally chosen…That’s a powerful influence among many agencies: and it results in those who have agency discretion exercising it for the benefit of those who run the corporation state. And those people are by and large the exploiters…The special interests that control government use its powers to favor themselves and to perpetuate regimes of oppression, exploitation, and discrimination against the many…
This means we must subject the machine – technology – to control and cease despoiling the earth and filling people with goodies merely to make money. The search of the young today is more specific than the ancient search for the Holy Grail. The search of the youth today is for a ways and means to make the machine – and the vast bureaucracy of the corporation state and of government that runs that machine – the servant…”
Chauvinism is chauvinism is chauvinism, whether it is perpetrated by men, women, gays, Republicans, Democrats, or Martians, and it ends badly for the practicing cult.
In the analog world, time is not the issue; frequency is the issue. We are always ready to mod an economy, and we always have the necessary building blocks stored away, because we think of nothing else 7/24. Pay us now, pay us continuously, or pay us later, with interest and penalties. It matters not to us. Time, deadlines, benchmarks, certifications, and money are all downstream derivatives residing in a dc bus that is always dying, and once you have seen one from the analog perspective, you have seen them all.
A wave is a wave is a wave. We work for liberty, and we are in the business of generating waves. Mismanagement of the dc bus on the part of its operators is no cause for alarm on our part. We always set aside some stock for another batch.
If I want to train navigators in an elevator shaft, that is exactly what I am going to do.
Place your eggs wherever you want.
Your focus on "analog" and "digital" is one that needs far more look see and discussion; it is an important aspect of our vision what what is and is not.
Analog and digital actions are totally different, but within a human framework of thinking analog is necessary because of how we are built. Digital is an artificial proposition and subject to fraud and manipulation. Think of a digital photo, it can be digitally changed from its analog reality.
I would contend that the push to have a digital TV network was in part due to the ability to manipulate Digital imaging. Probably full of shit as a Christmas Goose--but Humans are analog and any interface between an analog signal into a digital one requires alteration as the footprint of the signal is totally different and requires programing. Milestones
thanks for the tip on justice douglas, kevin. reading points of rebellion right now.
"The Constitution is not neutral. It was designed to take the government off the backs of the people...."
"The Constitution is not neutral. It was designed to take the government off the backs of the people...."
Exactly.
Another point to keep in mind if I may.
Whenever you hear the phrase "negative liberties" be assured you are listening to a blithering idiot.
http://www.youtube.com/watch?v=KmSMKxcFdOs&NR=1&feature=fvwp
The problem (as we all know) is that the entire system has become corrupted throughout. I think the interesting thing to watch will be the sacrificial lambs; how many will the elite throw out to save their own sorry asses? When that does happen, they risk getting their heads lopped off too, so they will do their damndest to keep the sacrifices as few as possible to maintain their support base against populace outrage. They think they have the guns, but within their own armed base they have lots of Arnolds, Judas' and Brutus' who fear being sacrificed, and will try to take as many of their 'evil overlords' with them as they can. When the congress is forced to cut the budget of the DGB and confiscate their (it's ours) supply network we will have reason to think the bottom is close.
If you steal $100, and the government punishes you with a fine of $10, then you don't have justice. You have a partner.
Well said.
The ballad of blankfein:
http://www.youtube.com/watch?v=U7M7d8u40I4
WOW! If you really believe that any of these crocks will ever be prosecuted then, well then, my jidish heart goes out to all of you!
Joseph Stiglitz just agreed<<<
Give me a break. Stiglitz??? This bozo is trying to play both sides of the fence. Shall we go back and listen to the debate between him and the Zerohedge hero Hugh Hendry.
Agreed. Stiglitz has been playing both sides for years. Now he's suddenly gotten religion?
But he makes one good point in a roundabout way:
Once the average Joe no longer feels the system is just -- even if Joe was naive to think that way in the first place -- there is no future for the system. Once everyday people opt out because they realize they no longer have a stake in the outcome, then decent society is not merely on a slippery slope. It has gone over the cliff, Road Runner style.
+ 500b no I mean 600b...ok, leave it open
oops
Do as I say, not as I do doesn't work with children or citizens. For every wrong you catch someone in there is always more you didn't catch. Either prosecute top down or expect that those on the bottom will start breaking the rules more and more. And you will only catch it sometimes so the risky behavior is going to overload the system. This goes on already. If everybody is stealing/cheating then who is left to pay to arrest/prosecute/incarcerate?
it's chicken and egg thing: societal, economic, and legal collapse. They all feed each other. Criminals often justify their actions on some sort of fantasy based necessity. The further they dig themselves in, the worse it will get. Seems to be the pattern we're watching.
The fraud starts with the Nobel winning economists.
Put all Nobel winning economists in jail first. Then go after their pawns on Wall street.
Hank paulson stole some of the tarp money..
Bloomberg said $ 72 Billion of the Tarp money is missing...
not accounted for.... ( 10 % of the total stolen.. )
no paper trail..... Cheney / Bush got a farwell bonus...
And lah-de-fucking-dah, never ever will know where any money goes anyhow, until the Fed's operations are opened up to full public scrutiny.
I am amazed by what I know that I could get away with;
-the power to create money out of thin air
-the power to wire any sum I care to wire to any account anywhere in the world
-and never be held accountable for it's creation or distribution...
All of which are done with no oversight or public scrutiny. Ever wonder why? And no, its not a conspiracy theory. Them's be facts.
Audit the Fed, open all operations up to public scrutiny.....
Hear us oh Great Leaders, the Pauls, et., al......
Ron Paul get's to sit in the big seat now...we shall see what we shall see ;-)
Link, please.
Stiglitz has warm ink on his hands. He's Obama's economic advisor to the IMF. Round up the usual suspects!
So, when is Hank, Ben, and Timmy going to jail ?
Bawny is going to have to go to the womens prison cuz no one should be rewarded for evil.
Look folks, there is one guy and one guy only who has to be held accountable for the absence of law enforcement here: FBI Director "Honey Pie" Mueller.
Don't blame the criminals when the cops don't even show up for work.
Does anybody even know what the bitch looks like? Why isn't he on the spot to explain rampant high crimes on Wall Street?
http://en.wikipedia.org/wiki/Robert_Mueller
Didn't the FBI blow the whistle on the mortgage scam in 2004? And didn't the PTB hush it up?
They put out a warning to borrowers that lying on their applications was a crime. They said nothing about defrauding said borrowers, MBS investors, municipalities, CDO holders, GSE's who picked up the toxic crap, etc . Nor the banksters who gutted their firms of the ill-gotten gains.
WANTED - Alive and prosecuting or replaced with someone who will prosecute.
I thought he died during Clinton's administration? </sarcasm>
I think he's using his hand to describe the severity of crimes committed. Or, perhaps, he's describing.... no, never mind.
He was in a meeting with Hank, Ben, and Timmy.. He said:
"In for an inch", "In for a m......"
He meant.. "All in?"
It's a video conference call with his field agents explaining taking bankster dick: It's only this much?
Or "you gotta give some to get some"?
Is he not the one man without whom this criminal bankster syndicate could not operate?
There's nothing worse than a dirty cop.