We’ve all heard the old saying “once a cheater always a cheater.” Now thanks to Wall Street we’ve been given a new variation: “once Wall Street, always Wall Street.” In other words; once you cause the largest financial crisis since the Great Depression due to bad behavior and wrongdoing, you will continue to engage in that bad behavior and wrongdoing since you won’t have to face any consequences as some habits are hard to break. Continue reading
Not that I was expecting any different, but as I watched Mitt Romney accept the Republican nomination, I heard bold talk and big promises.
It is a narrative, plain and simple, an entertaining one perhaps, but one that I fear will do little to make things better for Main Street.
Small businesses are and should be the centerpiece of our country, and so I appreciate Romney’s efforts to put them at the center of his campaign.
But if he thinks reducing the size of our government alone will allow them to thrive, than either he is naive, or even he doesn’t believe his own talking points and just thinks we are all idiots.
I have my doubts about the President as well, and I suspect that when Barack Obama takes the stage in Charlotte this week, that while the message will be different, the rhetoric will be just as loud.
Here is the fatal flaw with Romney’s ‘get government out of the way’ approach to housing and commerce.
Government really hasn’t been in the way. Banks have been running wild lately, with few checks and balances put in their way.
Obama’s administration has left the banks to their own devices, more often than not, and has yet to really lay the hammer down.
And that was when our government was supposed to be keeping their eye on Wall Street.
So is Romney going to remove all pretense, and just shut his eyes as big business is left to keep making its own rules?
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And there has been no greater sense of frustration for me than to see the banks, time and time again, not be held to the same standards as you or me.
It has become standard practice for banks to wiggle and maneuver and do everything possible to escape accountability.
But perhaps even more maddening is when those in power refuse to dig their heels and go after these banks. The latest example: the Justice Department’s refusal to prosecute Goldman Sachs.
They hedged their bets and sought to make money on the backs of their clients. This is nothing new to any of my readers, nor is the Justice Department’s lack of reprisal.
No one is suggesting that prosecuting Goldman Sachs would have been a walk in the park. But prosecuting them was necessary, if the climate of Wall Street is ever going to change.
What is absolutely maddening about all this is that by allowing Goldman Sachs to skate, the DOJ is all but announcing that the banks can continue to engage in other unconscionable and illegal activities without the fear of retribution This is called a moral hazard — encouraging certain negative behavior by allowing it to continue.
“Ironically” — we only hear about moral hazard in the media, it’s FROM the banks, or government officials like Edward DeMarco, who are alarmed at the notion that homeowners might participate in moral hazard. They will use that alarmist notion, despite the fact that it has yet to be substantiated, as a reason not to do principal write-downs or provide homeowners the meaningful assistance they need.
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When my staff and I started working on compiling our list of Dirty Dozen banks, I realized there are many questions that the list does not answer.
The fact is all of us need to dig deeper, and educate ourselves to obtain a further understanding of the current culture of Wall Street if we are to do anything about fixing it.
I would like nothing better than for there not to be a need for a Dirty Dozen list, but I suspect we’ll be updating that list for years to come.
It was not always this way. Banks, and bankers, used to have their pulses directly linked to the communities they served.
But somewhere along the way, Wall Street became insulated from the rest of America. Their concerns are no longer ours.
Americans realize this, I realize this, and yet despite growing evidence mounting every single day, those in power on Wall Street fail to see the forest from the trees.
And therein lies perhaps the biggest problem with Wall Street. You have a systemic and endemic failure caused by poor moral leadership.
Forget trickle-down economics, Wall Street has a bad case of trickle-down ethics. Or more correctly, a lack thereof.
Dimon continues to push a narrative that he’s sorry, but not ultimately responsible for the problems that have befallen him.
And it is because he continues to push that narrative that I choose to make an example of him. His apologies still ring hollow, because he follows those apologies with some truly bizarre examples of self-deflection.