Sorry, but I always see the forest for the trees. First, almost every state has an education system that’s under severe economic pressure. Why? What happened to all the money? Why are the second round of layoffs in Seattle’s school system not the real scandal? Why are we transforming teachers into plantation workers? Not because of Goodloe-Johnson and Potter, I’m afraid. You have to go back to 2008. You have to see the forest. You have to listen to what the director of Inside Job, Charles Ferguson, said this Sunday during the Oscars:
“Forgive me, I must start by pointing out that three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that’s wrong…”
This superintendent stuff is just a distraction, a way of not dealing with the much deeper problems of accountability in our society. If Potter committed a crime, he owes a debt to society. Those who crashed the entire economy and consequently bankrupted the public education system, and refuse to pay taxes in any meaningful way, have yet to return even a fraction of their deep debt to this society.
Your idioms are out of whack.
Meanwhile ZERO CFOs and CEOs are in jail for looting America.
Charles ftw.
Blacks steal from SPS? Bush’s fault!
I’m so tired of the “no CEOs are in jail'” gripe. People go to jail when they break they law. The CEOs of the failed financial institutions took huge, unjustifiable risks; they behaved like drunken gambling addicts on payday. They risked the financial security of the entire country. By and large, hhowever, they did so within the law. There’s no law against being stupid.
Of course the CEOs aren’t punished and aren’t paying meaningful taxes. Who do you think runs this country? (Hint: It’s not the politicians and not the citizens).
Your votes only allow you to vote in a candidate of the big corporation’s choosing. It’s like voting whether you want coke or diet coke. Your ‘choices’ are severely limited.
@4 Matt Taibbi disagrees with you, and makes a very compelling case why many of the banks & CEOs are guilty of knowing fraud: http://www.rollingstone.com/politics/new…
Welcome to Corporatocracy. It is no crime to gamble large amounts of other people’s money.
The two stories only differ in scale. The superintendent is a lower cog in this system, but still part of it. Schools, the first step in the system, simply supply worker bees to corporations. They serve their corporate purposes.
But, the elites will not be punished. Instead, they will receive a handsome reward. They will be free to attack again in a few months.
CM, you miss the point altogether. It’s the same misuse of power, and it should be crushed wherever and whenever we see it.
#4 People go to jail when they break the law, IF the powers that be decide to investigate and prosecute. The government bodies charged with oversight of the financial services industry are legendarily derelict in these matters. It’s intellectually dishonest to suggest that the lack of prosecutions somehow proves there was no lawbreaking.
Further, there are some laws against being stupid, if you define stupid as lying to regulators, giving customers false information about the ratings of their investment instruments and such.
All that has to happen to put some of these criminals in jail is the will of the government to enforce the law. There will be no accountability, but innocence isn’t the reason.
@4 – Wrong. It was illegal. It is so intricate that the charges are not easy to bring. What they did was not within the law.
Charles, you are right on with this one. This feels almost ghostwritten… I am not used to understanding you AND agreeing with you at the same time!
Maria Goodloe-Johnson is being sacrificed for the sins of Joseph Olschefske (a former investment banker).
While it’s clear that many banks violated the law through deceptive advertising and robo-signing of mortgages, it doesn’t follow that CEOs removed by layers of corporate bureaucracy from the actual criminality. Corporations, like most large institutions, are structured so that culpability and responsibility are diffuse. I’m not saying it’s right, far from it, but having read all the literature on the subject I’m just not convinced that what went on amounted to anything more heinous than greed writ large in am environment of inscrutable license. If you disagree, show me a smoking gun and I’ll reach for my pitchfork as quickly as the next man.
It’s not that I’m some kind of blind sycophant for plutocrats like the business desk at Fox News. I’m angry; what happened wasn’t right. People ought to pay. I just think that a billionaire perp walk is a Quixotic goal that distracts from more substantial remedies, like a robust consumer finance regulatory apparatus.
The frauds committed in the recent financial collapse were generally of three kinds:
1) Mortgage lenders (and borrowers) falsified loan applications or processed loan applications that they knew to be false. If the investment bankers who created the insatiable demand for mortgage-backed CDO’s didn’t know that the loans were no good then they should have.
2) Those selling mortgage-backed CDO’s misrepresented the risks associated with them. They made the investments sound much, much safer than they actually were.
3) Unsuspecting investors were encouraged to issue Credit Default Swaps (bond insurance) without being fully advised of the risks associated with them.
For the most part, the initial losers in all of this foolishness were those who were directly involved in the foolishness – institutional investors who bought the CDOs and institutional investors who bought the hedge funds that invested in the CDOs and Credit Default Swaps. The damage only spread to other sectors of the financial markets and other participants because the hedge funds were so spectacularly leveraged. The housing market was damaged when the loans, predictably, came due and dumped several years worth of houses on the market all at once. The glut on the market and the restored reason and control on lending caused a correction in home prices, which pushed a lot of recent home loans under water.
The spread of the damage was just a retraction to where things should have been and would have been if not for the bubble funded by easy credit. You may have lost your job or house, but you would not have had that job or house if not for the bubble.
In the final analysis, it was easy money – for consumers and for hedge funds – at the root of the collapse. In the final analysis, the collapse was from an unsustainable and unwarranted bubble down to a more rational valuation and credit policy.
For the most part, the bursting bubble only caught people who participated in creating the bubble or who profited from the bubble. Yes, the stock market fell, but it has largely recovered. If you can’t tolerate the market falling and recovering over the course of three years, then you shouldn’t be in it to start with. Equity investment requires a time horizon of more than three years.
It was bad for folks who held auction rate securities. They are screwed for life. Those things are not coming back.
It was bad for folks who got conned into marginal real estate deals.
As for the investment bankers… hate the game, not the players.