June 19, 2008

Wall Street Dominos Start to Fall

The Associated Press reports that Bears Sterns hedge fund managers
Ralph Cioffi and Matthew Tannin were accused of encouraging investors to stay in their hedge funds, heavily exposed to subprime mortgages, even as they knew the credit market was in serious trouble.

AP puts this in the context of wider action...

The arrests came as the Justice Department in Washington announced the indictments of more than 400 players in the real-estate industry since March in a crackdown on mortgage fraud. Sixty were arrested on Wednesday alone.

It's hard to say this is honest justice when we know that the system and culture is corrupt to the core. We saw similar actions of "justice" when Enron, Arthur Anderson and others were in the spot light... but there doesn't seem to be a deterrent effect.

It has been noted that "if it pays, it plays" in regard to illegal activity. In addition to jail time, we need to focus on getting the money back that has been stolen. If that means liquidating big player corporations, and paying off the workers who will have to find new jobs, then so be it.

The corporate elite has robbed us every decade via a system that allows it. When John Edwards becomes the next Attorney General, we need to pressure him to change the system. That will be a true test of Obama's mouthing of the word "change."


Associated Press, 2 charged on Wall Street in mortgage meltdown, June 19, 2008.



libhom said...

This reminds me of the Enron/Worldcom era of corporate prosecutions. The only companies that the Bush regime were really interested in going after were the ones that had failed.

Who knows how many companies are still going with cooked books?

Enforcement that is limited to pr/corporate crisis management is hardly adequate to deal with corporate crime.

Anonymous said...

Tell me, what will "paying off the workers" entail? Would they get health insurance, money, both? And if the taxpayer is paying the bill, do we essentially "bail out" the corrupt corporations, anyway?

GDAEman said...

Libhom, you're so right.

Anony, we give the corporate person the "death sentence," which is only possible politically if we, yes the tax-payers, take care of the workers. It would be funding a transition, basically unemployment-plus (we can't get hung up on the details, which labor experts can work out).