Too Big To Jail Is Here To Stay

Lanny Breuer, the Assistant Attorney General who claimed that prosecuting banks for crimes poses a risk to the financial sector and so corrupt bankers are “too big to jail” has lost his job:

MARTIN SMITH: You gave a speech before the New York Bar Association. And in that speech, you made a reference to losing sleep at night, worrying about what a lawsuit might result in at a large financial institution.

LANNY BREUER: Right.

MARTIN SMITH: Is that really the job of a prosecutor, to worry about anything other than simply pursuing justice?

LANNY BREUER: Well, I think I am pursuing justice. And I think the entire responsibility of the department is to pursue justice. But in any given case, I think I and prosecutors around the country, being responsible, should speak to regulators, should speak to experts, because if I bring a case against institution A, and as a result of bringing that case, there’s some huge economic effect — if it creates a ripple effect so that suddenly, counterparties and other financial institutions or other companies that had nothing to do with this are affected badly — it’s a factor we need to know and understand.

But the man who put him there, and who is ultimately responsible for the policy — the Attorney General himself — is here to stay.

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Simon Johnson notes:

Attorney General Eric Holder expressed similar views in the context of discussing why more severe charges weren’t brought against Zurich-based UBS AG last year for manipulating the London interbank offered rate. And Neil Barofsky, a onetime senior prosecutor and former inspector general of the Troubled Asset Relief Program that administered the bank bailouts, provided a scathing assessment of Justice Department policy.

The Justice Department likes to quote Thomas Jefferson: “The most sacred of the duties of government [is] to do equal and impartial justice to all its citizens,” a line that appears in its latest budget documents.

This sentiment is hardly consistent with saying that some companies have characteristics that put them above the law. Jefferson himself was very worried about the concentrated power of financiers — he would have seen today’s problems much more clearly than do Holder and Breuer.

Fundamentally, Obama’s continued support for Holder illustrates that Obama is still committed to the policy of holding financiers to a lesser standard of justice than other citizens.

The continued failure to implement even the Volcker rule — let alone a Glass-Steagall-style separation between retail and investment banking — illustrates that Obama is committed to letting bailed-out banks continue to operate in the risky manner that led to the crisis. So does the total failure to ensure a level playing field for retail investors in a market now totally dominated by algorithms.

The big banks continue to ride roughshod over the American people with the complicity of the political class. Too Big to Jail is an affront to the Constitution, an affront to the Bill of Rights, an affront to those like Rosa Parks, Martin Luther King, Lysander Spooner, Frederick Douglas and all those who at various times crusaded to make equality before the law a reality in America.

The only sensible way forward is that lawbreakers on Wall Street must be prosecuted in the same way as other lawbreakers. That means that Eric Holder and all others associated with Too Big To Jail must lose their jobs.

But I doubt that will happen any time soon.

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Too Big To Jail

What’s worse than unjust and ineffective laws like the failed War on Drugs and the failed sanctions on Iran?

Unjust and ineffective laws that apply to ordinary folks, but not to banksters:

When the Justice Department announced its record $1.9 billion settlement against British bank HSBC last week, prosecutors called it a powerful blow to a dysfunctional institution accused of laundering money for Iran, Libya and Mexico’s murderous drug cartels.

But to some former federal prosecutors, it was only the latest case of the government stopping short of bringing criminal money laundering charges against a big bank or its executives, at least in part on the rationale that such prosecutions could be devastating enough to cause such banks to fail.

They say it sounds a lot like the “too big to fail” meme that kept big but sickly banks alive on the support of taxpayer-funded bailouts. In these cases, they call it, “Too big to jail.”

This stings. It should sting anyone who cares about the idea of equality in front of the law, anyone who cares about the basic rule of law, anyone who doesn’t want to see their society devolve into a festering pool of feudalism.

According to the most recent data, there were 197,050 sentenced prisoners under federal jurisdiction of which 94,600 were serving time for drug offenses.There were 1,362,028 sentenced prisoners under state jurisdiction of which 237,000 were serving time for drug offenses. That’s over 300,000 individuals serving time currently for drugs offenses, in addition to over one million currently on probation. Now I don’t agree with the War on Drugs at all. But big banks are deemed too “systemically important” to be held to the same standard as the huge and disproportionately black population of low-level drug users.

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If the Drug War laws don’t apply to the big banks — if Wall Street bankers who have broken the law can’t go to prison too — then how is incarcerating low-level drug users really much different to chattel slavery?

And not only do private prison companies pocket massive profits from the taxpayers’ purse for running the prisons, but prisoners are a pool of ultra-cheap indentured labour.

As Todd Curl notes:

Prisons in the United States used to be institutions of actual reform and rehabilitation. Men who entered a prison, would often learn a trade and have a usable skill to earn a legitimate living upon release. The recidivism rates have sharply increased as job and education programs within prisons–especially private prisons–have steadily declined. This is not to say that skills are not acquired in these private prisons, quite the contrary. In many of these private prisons, inmates are contracted as telemarketers, among other things, for many large corporations. These prisoners can earn as much as 75 cents an hour for their job–sometimes under 40 cents. What’s the payoff one might ask? For one, corporations get very cheap—third world cheap—labor that cannot unionize, cannot call in sick and cannot complain without fear of time added to their sentence or retaliation from guards who overworked and underpaid themselves, and risk losing their livelihood if an “uppity” prisoner refuses their indentured corporate servitude.

The War on Drugs is descending from tragedy into farce. Poor black drug users are fair game for the slave labour business. Rich Wall Street bankers who launder drug money? Nope.

In May I asked:

Have the 2008 bailouts cemented a new feudal aristocracy of bankers, financiers and too-big-to-fail zombies, alongside a serf class that exists to fund the excesses of the financial and corporate elite?

Only time will tell.

Time is telling.

Once a certain segment of society becomes protected from criminal liability, that society has travelled a long way down the road to feudalism, to a caste system, to serfdom.