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Capital Punishment: What Should We Do To Wall Street's Villains?
According to the principles of retributive justice, punishment is supposed to be more or less in proportion to the magnitude of a crime. So—which do you think is an appropriate punishment for the Wall Street executives whose greed and corruption not only bankrupted their own companies, but set in motion a meltdown that has deprived millions of Americans of their homes and their life savings, driven millions more into unemployment and poverty, and triggered economic chaos, political unrest, and even starvation and death around the world?
A. Don’t give them a bonus this year.
B. Fire their asses.
C. Lock them up and throw away the key.
If you answered A, you are in line with the policies of the Obama administration, which, after giving billions in bailout money to the likes of AIG, discovered that the company intends to pay out millions in executive bonuses. The administration’s response has been to get really, really pissed off, and say that they just aren’t going to stand for these guys getting multi-million-dollar bonuses on top of their multi-million-dollar salaries–if only they can figure out a way around those pesky contracts.
If you answered B, you agree with the surprisingly small number of politicians in either party who have come out and said that the leadership of these companies–who must surely be incompetent if they aren’t crooked–should be jettisoned from their jobs without golden parachutes. House Financial Services Committee Chair Barney Frank raised eyebrows yesterday when he said that since the federal government now effectively owns some 80 percent of AIG, maybe they should do some housecleaning: “Maybe it’s time to fire some people. We can’t keep them from getting the bonuses, but we can keep some of them from continuing in their jobs.”
If you answered C, I suspect you have a lot of company among the world population at large–but not so much among politicians or the press. I really had to look around to find anyone talking about investigating and prosecuting these guys, even with an eye toward fines and restitution--as Ralph Nader does in this piece from Counterpunch:
Where are the resources for comprehensive law enforcement against the Wall Street crooks, swindlers and purveyors of costly deceptive practices? Isn’t there a need to add two to three hundred million dollars for more FBI agents, prosecutors and corporate crime attorneys under the Justice Department to obtain the fines and disgorgements which will far exceed in dollars what is spent by the forces of law and order?
Americans want justice. They want jailtime not bailtime for these crooks. Look how many of the swindled just turned out in a New York City winter to let Bernard Madoff have a piece of their mind as he entered the courtroom and immediate imprisonment. There has been very little movement so far in Congress or the White House toward this necessary action.
The lesson in all this is that regardless of what happens with their bonuses, the Wall Street execs have suceeded in controlling the terms of the debate. Because as long as we’re arguing about whether they should get a few million more or a few million less, we’re not discussing whether they should serve their time in a medium-security federal penitentiary or a maximum-security one.
I'd be satisfied with just
I'd be satisfied with just raising their taxes.
"Conspiracy to be to big to
"Conspiracy to be to big to fail" and "conspiracy to destroy the world economy" don't seem to be criminal offenses at the moment, though that may change.
To the extent that investments were in good faith, you can't really charge them with anything. They were just wrong, and pitifully so. In the end, it's as much our fault for trusting them as it was theirs for letting us trust them.
Let's see these contracts . . .
It has always been my understanding, and certainly my experience as it relates to my own salary, that bounuses are incentives for performance beneficial to the company. That said, what kind of contract would require a company to give millions of dollars to the people who helped tank the company? If they still managed to hit some metric by which AIG is defining "success" while still destroying the company and precipitating (in part) the current financial debacle, then we need to look at the legality of what AIG was trying to achieve as a company.
It has already been widely discussed that these Credit Default Swaps and other dubious investment tools were being used partially to help large financial institutions mask their liabilities and reduce the amount real capital that they needed to have on hand. This sounds an awful lot like cooking the books.
If current accounting rules allow for this weird fictionalization of liability along with the creation of imaginary assets, then those rules need to be overhauled with extreme prejudice.
As to the recipients of these grotesque bonuses, I say this: let them have their ill-gotten gains. In light of the Billions we have foolishly given to AIG, this 160 Million is a relative trifle. However, I think the parties involved have shown a sufficient blend of hubris and poor decision making skills to warrant extensive auditing of their personal finances for the last decade or so. A close examination of their books may allow the IRS to recoup an admirable portion of these bonuses.
And extortionary as this may sound, you can always let the executives know that they can decline the bonuses and avoid the whole auditing process for past fiscal years. The future would still be another matter.
I'll take A for 50 billion Alex
A. Don’t give them a bonus this year. The surreal Wall Street auction has banks colluding to grab the bailout bucks with plans to bonus greedy execs. Stopping this is progress (albeit small) and a first step. It's not just rhetoric but a sign that the Obama admin can show the taxpayer they have a conscience whereas the previous 8 years of government was oblivious.
Clever take on where we are today:
http://www.youtube.com/watch?v=Nay4VbUJl3E
Wall Street Bonusses
tagged as:- solution
If we must honor the contract then pay them in toxic securities. I thought Credit Suisse had a good idea!
I choose D)
Re-enact the French Revolution. I know how to build a guillotine, and I have my torch and pitchfork.
Or, alternately, we could just line them up against the wall and shoot them. I'm good with that, too.
An alternative
Since their negligence resulted in the impoverishment of many, I propose a turnabout. Let them pursue any job they like, but for, say, twenty years, their total income may not exceed minimum wage.
It is simply naive and
It is simply naive and unrealistic to think that these individuals have "learned their lesson" and will "do better next time." We need to set an example. We should have done so after the Savings and Loan Scandal. We didn't. A few scapegoats got thrown in jail while the real criminals actually prospered (and, in one case, ran for President). Now we have an opportunity to "do better this time"...
Option D sounds fun (and this coming from someone who doesn't believe we should even HAVE a death penalty), but is unrealistic. After all, it is no understatement that these individuals have conspired to cash in at the expense of the American economy. They knew that their company was "too big to fail" and deliberately ran it into the ground. If these deliberate actions bring about "serious injury to our parent nation" (see Oran's Dictionary of the Law, 1983), then aren't they guilty of treason? Well okay, Article 3 of the Constitution of the United States of America, defines treason as consisting "only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort." But there's always the lesser charge of sedition...
Oh...and the alternative suggestion of forcing these individuals to work minimum wage jobs...not much of a threat when they already have so much money that even their childrens' children need never work again.
Stoveken has the right idea
tagged as:- solution
Stoveken has the right idea In fact it is brilliant. Crooks like these are always crooks. Hubris in ALL things. So let them have their bonuses but audit everything they have done for the past twenty years not ten. Have the IRS hire special agents familiar with how these guys hide the money from the government. There should be lots of former Wall Street types that need a job right now. Then offer them a bonus say 2 cents for every dollar of fraud or tax evasion that they uncover. See what happens. Can't hurt and probably get back way more than those bonuses.
Can we have 'All of the Above'?
tagged as:- solution
I find it difficult to fathom how AIG and other firms have hidden behind the 'retaining the best and brightest' (such as they are) excuse when these bozos are the ones who have driven their companies into the ground.
Since they've already done commercials about firemen running Congress and delivery drivers running the schools, maybe Sprint needs to do a commercial positing how things would be if construction workers ran these freaking banks :) Might be a good idea actually - at least those men and women know what real work is...
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