Tag Archives: mortgages

Why aren’t some bankers in jail? (Update)

If I sell you a disk that I tell you has Windows 7 on it and you get that disk home and find out that it only has the Windows 7 logo, that’s a problem. Bankers sold the American public mortgages that they knew would blow up in a couple of years. Why isn’t that fraud?

Update:

The Great Recession showed the world that the crimes that create the most victims are not committed by terrorists, gangbangers or drug traffickers, but by well-heeled crooks in Wall Street’s executive suites. Tens of millions of people have seen their jobs disappear and their pension funds fleeced, and had their homes taken out from under their feet as a result of the crash of Wall Street’s Great Casino. Yet so far, the culprits have been given little more than a slap on the wrist.

Failing to prosecute Wall Street’s high-flying crooks doesn’t only represent a great miscarriage of justice. Powerful voices within the economic establishment are now making the case that holding the bankers criminally culpable is necessary if we ever hope to stop our national economy from moving from one speculation-driven bubble to the next.

Nobel-prize winner Joe Stiglitz recently told AOL’s Daily Finance that major damage resulting from the financial disaster “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.” His prescription? “I think we ought to go do what we did” in the wake of similar financial crises in the past, and “actually put many of these guys in prison.”

A couple of things…

A couple of quick items this morning:

  • I do not think you have to be an economist to figure out that things are bad out there. In spite of Republican calls to slow down, I think we need to speed upHousing starts for January were down over 50% compared to January 2008.
  • President Barack Obama unveiled a $75 billion package to help prevent foreclosure on millions of homeowners. I’ll have to look at the details but it appears that this will help homeowners refinance their mortgages in order to make their payments easier. You can find the executive summary here.
  • The Federal Reserve issued its annual report, forecasting the behavior of the economy for the next three years. The outlook is, of course, not good.
  • For reasons that continue to escape me, people still listen to Alan Greenspan. He told the Financial Times yesterday that we need to look at some way of nationalizing the banks. I completely agree that this has to be done, but what took Greenspan so long?
  • Finally, Time magazine has come out with its list of the 25 most influential (best) blogs of 2009 and somehow the Daily Kos is not on it. Some of my favorite blogs do make the cut, including the Huffington Post, Crooks and Liars and Talking Points Memo. I would argue that the Daily Kos has changed the game like no other blog and has done so for the past six years.  I’ll have more on this later.