Let’s be clear: financial misdeeds ruin lives. If a Madoff takes your money and uses it to pay off other investors in a ponzi scheme, you won’t be able to get it back. If a Blankfein underling issues you with misleading advice, and then bets against you (creaming himself a nice profit), you won’t be able to get it back. If a Corzine steals your money and uses it to bet on the European sovereign debt market, you might not be able to get it back. You might end up in poverty or worse. You might lose your children’s college money, your retirement money, or capital you needed for your business. You might lose your home.
So shouldn’t we take a tough line against financial misdeeds? Shouldn’t tricking and stealing from investors, tricking and stealing from the public, tricking and stealing from clients carry a heavy disincentive, like death? Would a corrupt banker not think twice about their misdeeds if they knew that apprehension would mean a noose around their neck and a kicked bucket?
Certainly there is a popular impression that big-time criminals with titles, status and MBAs get it easy, while protestors (sometimes protesting the misdeeds of big-time criminals) get shafted by the hyper-vigilant modern security state:
A lot of commentators — like for example, Max Keiser — seem to think so.
And in China financial crimes are treated with a gravity far beyond a cushy minimum security cell, and home visits on the weekends.
Financial criminals in China are often executed.
China has executed bankers for fraudulent activity:
- Wang Liming, former accounting officer, China Construction Bank, Henan, with others stole 20 million yuan ($2.4 million in U.S. Currency) from the bank using fraudulent papers, executed.
- Miao Ping, an accomplice in the same case, executed.
- Wang Xiang, same bank in an unrelated case, also executed for taking 20 million yuan from the bank.
- Liang Shihan, Bank of China, Zhuhai, executed for helping cheat his bank out of $10.3 million US.
In a recent case, Wu Ying, a 28-year-old woman, will soon be put to death for taking out multi-million dollar loans from investors she was unable to pay back.
We in the West appear to have a problem; financial crimes ruin lives, but financial criminals either get away with a comparatively small fine (like Goldman did after they misled clients), a cushy prison cell, or sometimes even a taxpayer funded bailout.
Simply, they keep the upside of their behaviour, and pass the downside off to someone else (either a sucker investor, or a junior partner, or the taxpayer).
Hammurabi, the Babylonian King, had a simple principle for dealing with such bullshit:
If a builder builds a house and the house collapses and causes the death of the owner – the builder shall be put to death. If it causes the death of the son of the owner, a son of that builder shall be put to death.
Exact equivalence; you destroy someone’s livelihood, and your livelihood shall be destroyed. Such justice would leave a lot of people, and not just bankers — Dick Cheney, John Yoo, Larry Summers, Tim Geithner — with a lot to fear.
But would it work? Well, China executes bankers — as well as corrupt party leaders, (watch out, Bo Xilai) — and bankers in China keep screwing investors and the nation.
I think the biggest problem with capital punishment is that it is administered by the state (or the mob) and that means that very often it is administered to the wrong people, for corrupt or flawed reasons. Putting the power of life and death in the hands of the state is quite dangerous. More likely than not, the person executed will end up being the innocent junior intern (“take one for the team, buddy!”) while the corrupt CEO enjoys a retirement of golf courses, hookers, viagra, and oxycontin.
A much better goal to aspire to is the end of bailouts, and the end of firing off wads of QE-dollars to preserve badly-run (but well-connected) companies and systems (zombification).
Still, in matters of financial fraud I think it is important to seek out equivalent justice; you destroy a livelihood, we take your trust fund, and your Swiss bank account to compensate the victim. The status quo — where regulators shoot off tiny fines for huge financial crimes — is a joke.
But the best way to punish Goldman Sachs (etc) for their misdeeds is to not bail them out the next time their hyper-fragile leverage-driven business model fails them and they end up over a barrel. It is quick, dirty and emotionally satisfying to talk of executions, but giving the state the power over life and death has far bigger, and far more dangerous consequences, not to mention huge potential for abuse.
No way! In the grand scheme of things now, 100 or so corrupt bankers on planet Earth with 6 billion are practically irrelevant. What’s done is done. Forgiveness, not even jail terms, is what should be advocated.
Jesus — the King of forgiveness — begs to differ:
It’s not just 100 corrupt bankers! It’s the thousands to millions of employees that aid and abet them, knowingly or not.
No even jail terms? You are a lunatic!!!
Well, I’m here to tell you Jesus got it wrong, Gandhi & Mandela right.
Allow people to voluntarily contribute to a Truth & Reconciliation Commission
Yeah, I think a Truth and Reconciliation Commission will be appropriate, after we have thrust banksters out of the bailout temple. They have destroyed a lot of lives.
What would you say to the people who argued that the bailouts were necessary on the grounds that doing the opposite would have led to massive job loss and more suffering?
I would say they were wrong as we ended up with massive job losses and more suffering.
I agree. I would say at that point: Oh, not bailing you out will cause more suffering you say? Well then it should be easy to prosecute whoever is involved, liquidate, and return the assets to their rightful owners!
I agree businessmen against (peaceful) competition who instead rely on steering bureaucracies to shield their incompetence deserve no seniority in the global economy.
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On January 7, 1905, the Electrical World and Engineer Journal published some ideas under the title of:
“THE TRANSMISSION OF ELECTRICAL ENERGY WITHOUT WIRES AS A MEANS FOR FURTHERING PEACE”
This article was written by Nikola Tesla, the genius and massively under appreciated electrical engineer…who out competed Thomas Edison to enable electricity on a mass-scale across Earth. The article link is below. A snippet of which I believe is particularly important reads:
“The fact is—our faith in the orthodox theory of slow evolution is being destroyed! Thus a state of human life vaguely defined by the term Universal Peace, while a result of cumulative effort through centuries past, might come into existence quite quickly, not unlike a crystal suddenly forms in a solution which has been slowly prepared”
Nikola Tesla, 1856–1943
The problem with punishment is that folks that wish to forgive impose their sense of shame, guilt, and ability to reform upon psychopaths. These psychopaths are incapable of feeling shame, guilt and are by definition, incapable of reform. Forgiving is a joke to them. “suckas!”, they think…
Punishing them with financial pain simply makes it a business decision. Personally, I think we should apply the logic that we gave to the families of the 16 Afghanistan civilians that were admittedly murdered by US troops a couple months ago. $50k a head for restitution. Steal a billion dollars = 200,000 bankers? Of course I exaggerate, but this is a “guide.” I realize capital punishment is hard for a lot of folks. So I will reluctantly relax it to life in prison.
These psychopaths that willingly take others property will only respect loss of liberty and the removal of their ability to harm others. They are not like 98% of the population. They cannot be reformed. They can only be separated and contained. Like Clinton said in response to “why?” “Because I could.” Forgiving works with the vast majority of people, but not with psychos.
The problem with life in prison is we have to pay for these people to live for the rest of their lives. I think a new approach should be revocation of citizenship. If you screw the US over through your banking scams, you lose all Constitutional protections and all US assets become frozen and seized. You and your household have 3 days to GTFO or you will be forcibly deported. You will have a lifetime ban on receiving any kind of entrance visa to the country or its territories. Ideally we would enter into treaties that are sort of reverse extradition so that you won’t have a civilized country to run to.
Why keep people in prisons, feed them, house them, cover their medical expenses when we can instead restrict them to 3rd world hell holes running from the Konys of the world.
Curious… did I just describe the founding of Australia?
Agreed DG. Psychopaths have no way of rehabilitation, and they cost money in prison.
Perhaps they should be experimented on to further science and humanity. Once used they are put down.
Until people in power act ethically or arecompelled to act ethically, these problems will resurface.
The problem is religion drives ethics. What is acceptable to one is not acceptale to another. So do we blame defective DNA or upbringing?
From my own family history I heard that many Bankers were executed by the village mob, because they had taken advantage of the simple trusting “Muppets”, and when the State gave the mob the power of retribution, it did not end well for the Bankers.
Before making any new laws it’s much better too look at ones that are already in place. Bankers enjoy special protections that allow them to operate like this, it’s their cut from allowing government to do it’s dirty financial tricks. First of all crony ownership has to be eliminated. Every virtual entity should be owned by some actual people and they should always be held to account with all of their money! It’s not “pro-growth” to absolve anyone from responsibility it’s pro-crony. If you own 10% of stocks of some company that bankrupts you should get 10% of their debts to pay. Taking down all of these protections would change how corporations work and also mean huge hit for financial industry (which is so bloated not by normal demand for their products, but because of these laws).
If somebody proved by a court of Law to have behaved illegally declines an offer to participate in the (very public) Truth & Reconciliation Commission, they could for example then be imprisoned for life. Personally, I don’t prefer this idea to my above-stated opinion, but it’s a means of involving force in the mix for those less amenable to Peace.
I agree it’s not “pro-growth” to absolve anyone from responsibility.
Whew! You were scaring me for a second there, Aziz! These guys are major assholes to be sure, but I think I nice lengthy prison term and an expropriation of their assets will do.
Yeah. Let’s just say I was being a bit sensationalistic. But I have been reading a lot about China lately, and let’s just say there are a lot of people who like their approach. Personally, I don’t even really believe in the death penalty at all.
the death penalty for the bankers AND THEIR FAMILIES!!!
I really hope you’re joking. We don’t need another French Revolution.
I am reading about the French Revolution and the disdain for the masses by the elites is eerily similar.
What goes around comes around.
I have, for sometime struggled with this question about the events leadings up to the 2008 crash,
“Did the FED, the US Gov. and the NY investment bankers REALLY not know they were engaged in financial shenanigans?”
The more I think about this question and its implications, the more I come to the conclusion that they knew what was going on and what was coming. Like most ponzi schemes, what was once a legitimate business/investments, becomes a runaway train. The reasons, greed or shame or stupidity, matter less then the solutions and here in lies the rub.
By 2004, even the FBI, was well aware that there was massive mortgage fraud. From this, we can deduce that at atleast some employees from the NY investment banks went to their superiors with much of the same information. Ahh, but greed and shame are powerful human motivators. Instead of solving the problems (i.e.stop punching holes into the bottom of the ship) the NY investment banks came up with a different solution. Regulatory capture.
Is it coincidence that the ex-CEO of Goldman Sachs Henry Paulson became the US Treasury Secretary in 2006. Is it coincidence that our modern day “Great Depression expert” Ben Bernanke, a man with the nickname “Helicopter Ben” was installed as the head of the FED BEFORE the onset of the Great Recession? Was it coincidence that the crash of 2008 came at the end of lame duck President Bush’s term, just two months before the most pivital presidential elections in modern times? Was it coincidence that the 2008 crash happened after the two main political parties had selected their presidential nominees?
Like all great wars in the history of man, the generals always fight using the methods that “won” the last war. It CANNOT be coincidence that, after the S&L crises of the 1980’s, that the bankers would not get ahead of the mounting problems and installed Trojan Horses in the main institutions of power. All we have to do look is look at the whos, the whats, the whens and it comes into focus.
Every great con needs a mark! So, in the great economic con of the last decade who was the mark? You and me, brothers and sisters. You and me.
I think there was an awareness that there was a big can of worms waiting to be opened. I’m not sure they fully understood the implications of all that mortgage fraud, and the problem of derivatives collapse. By all accounts the impression was that derivatives would make the financial world more stable.
That’s the thing about central planning. It’s easy to achieve objectives using central planning, but achieving objectives always has undesirable side-effects they can never control.
Having worked in the mortgage business during the bubble years, you would have to be an idiot to not “understand” that we were pushing crap paper.
I can’t tell you how many times I went to the SVP of sales and told him about issues such as, Non Arms Length Transactions, mortgage brokers fiddling with incomes on 1003 apps., falsified employment info and so on.
Also, I quick question for you,
“Did not one of these firms buying and selling this paper perform an audit?”
If so, “What was the outcome of the audit?”
If I were a Congress Critter, This would be question number 1!
So, why wasn’t the question asked? Because the answers would prove that the C-level bankers knew what was going on and it would prove that they were copable in the very least of financial fraud.
The worst lies told are the ones told in silence.
No, do not execute them (and I am a big supporter of the death penalty). Instead, give them what, to them, would be a living death.
As someone once said in a movie, “The worst thing that you can do to a rich person is to turn him into a poor person”. Being poor, or even common, where they have to work, is worse than death to them. Once you execute them, their suffering ends. Living as a commoner or a poor person for them is a suffering that lasts for a lifetime.
I don’t propose to know what logistics would be involved, but I would think that it would have to involve stripping them of all assets, and limiting their income to no more than an income equal to the poverty level. They would also have to be prohibited from owning propery (let them experience the joy of living in HUD housing).
We would also have to make it illegal for private individuals to give aid and shelter to these people, otherwise they would become permanent house guests of some of their rich friends or realtives and continue to live in the lap of luxury. Any aid and shelter would have to come from local soup kitchens and the like. Let them experience what life is like for some of the people whom their policies have ruined.
Under such a system, executions would be unnecessary, for the formerly rich would quickly kill themselves when faced like living like the people whose lives they have destroyed.
We used to call this process of making your bed and the sleeping in it, capitalism. But, alas, this quaint idea got shot in the back of the head and was buried at sea a long time ago.
“Capitalism? Isn’t that what all the big evil corporations believe in? We need to use the government to prevent capitalism”.
In other news, this:
Correct: Professor Krugman is now the authority on occupation.
One day we’ll meet eachother at the “reeducation” camp/school/prison.
“Class/inmates, can anyone explain his Holiness Prof. Krugman’s theory, of war is good for GDP?”
“But if war is good for the economy, and war is also peace, then surely peace is good for the economy?”
Come come, Aziz. Surely you can see the folly of capitalism?! It’s why we have food and why North Koreans don’t! Evil evil capitalism, that is! Our rockets work too! 😉
Excellent points Dave, but like any Black Market, they will get assistance and the Police won’t be able to catch the “Providers”
Impending Death is the ultimate fear and torment.
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Its silly to assume the “System” can punish people who know how to use it. A Statist system will *always* have people who know how to use voters’ good intentions to line their own pockets. Thats the nature of the State. The only way to solve this problem for our children is the chip away at the State, removing any and all laws you can–including penalties for bankers. Let free-market courts write and enforce law.
Max Keiser is misguided. He’s also advocated mico-taxes on financial transactions–yes, more taxation. He seems to think the State can be refocused and we will all live in a paradise. He is wrong, the State cannot be fixed and should only be removed one brick at a time if necessary.
Gavin — some members of my family are big fans of Max Keiser. But they’re also big fans of me. And when I wrote my critique of Kari Norgaard, and Max linked to the Zero Hedge version claiming that Kari Norgaard was doing “great work”, well, let’s just say it was an eye opener for them.
Yes abolish most laws and let people that are looking out for their private interests write them! Brilliant! In a society where govt works for it’s people, people actually control the state and the laws work for them. But alas, people get the govt they deserve.
“In a society where govt works for it’s people, people actually control the state and the laws work for them.”
You won’t find that government, ever. The idea of a selfless State is a myth that we need to stop teaching to our children.
Law created from the bottom-up, as opposed to Government law from the top-down, has existed and work extremely well (and always will) since before history.
One example i would give is English common law, which was exported to US civil courts. There is also law from the 1000 years of the Irish “Stateless” period, and from the 250 years of Free Iceland. Also the Somali Xeer. Also, read the book of Judges from the Bible. Just a few examples. It is a fallacy that we need the State to create and enforce law.
What’s the difference, man? Government is just a collection of people. I never said the state was self-less. Be careful not to make a straw man argument.
“Law created from the bottom-up, as opposed to Government law from the top-down, has existed and work extremely well (and always will) since before history.”
When did everyone in society sit down and create laws that every single person agreed upon? Societies have always had groups of people that made laws and groups of people that did other things. As the amount of people in the society increases, the harder it becomes to have people involved in creating laws. Seeing as how we have so many laws in the U.S., and so little civic participation, I say people get the govt they deserve. if anything we need to throw out the nonsense laws and keep the good ones. We elect people to represent us, and if we start to not care how they represent well then they won’t!
“One example i would give is English common law, which was exported to US civil courts. There is also law from the 1000 years of the Irish “Stateless” period, and from the 250 years of Free Iceland. Also the Somali Xeer. Also, read the book of Judges from the Bible. Just a few examples. It is a fallacy that we need the State to create and enforce law.”
Laws have no bite if no one enforces them. I assume your ideal society will enforce it’s laws – I would hope so at least! Calling the people that enforce and make your laws anything other than the state/govt is a distinction without a difference.
“Laws have no bite if no one enforces them. I assume your ideal society will enforce it’s laws – I would hope so at least! Calling the people that enforce and make your laws anything other than the state/govt is a distinction without a difference.”
@Jon I definitely agree that laws are meaningless if they aren’t enforced. I also believe that the idea that Statism is required to create and/or enforce law is a fallacy.
The description of Stateless life is difficult to describe, as it shatters a paradigm that has been carefully taught over thousands of years. Sadly, fallacies do not have an expiration date.
Someone who does a fantastic job explaining Stateless law is Graham P. Wright. Please take 10 mins to watch one or more of his videos in the “Law without Government” series on Youtube.
Sure thing! I’ll let you know what I think.
Seems a bit simplistic and geared towards smaller communities and societies, granted I have only watched part one thus far:
I have to vehemently disagree with his assertion that the judges/arbitrators will remain impartial simply because they MAY lose money IF they are caught engaging in some sort of malfeasance. Any one of the potential “clients” could be successful producers or business men that have enough money or goods to bribe judges/arbitrators without anyone else even knowing. The judges/arbitrators themselves may have been honest at some point, thus building a reputation and earning lots of money, and can now afford to bribe potential clients to use their services. By bribing people to continue to use a particular judge/arbitrator’s services, that arbitrator will artificially bolster his reputation and gain even more clients – he will pay clients to give recommendations to their friends, for example.
Two objections you might raise: The arbitrator has to rule in favor of the person being bribed and win each time; or, the arbitrator has to convince others engaged in a conflict with his client that he has ruled fairly, less they (the others) sully his reputation.
To the second objection. Since both parties have agreed to do whatever the arbitrator says – or remain in conflict (as per the video) – the losing party will always appear to be wrong. As long as the arbitrator and one party always agree, the loser looks bad. Even if the loser is being unfairly treated, an arbitrator has the allegiance of the winning party – the duo can then conspire against the unfairly treated loser if he protests and attempts to complain to another arbitrator. If the arbitrator is wealthy, not only can he conspire with his client, but he can buy off other parties and arbitrators.
The other issue I had with the first part was that the arbitration seemed to be more of a recommendation than any real law. The losing party can still overpower the party they are in conflict with, and if need be, the arbitrator as well – assuming the losing party is capable of doing so. If the losing party is not capable, seems to be the only way an arbitrator works. In other words, the losing party must remain a good actor. The arbitrator must be capable of enforcing punishment on the losing party, and since they must be capable of using force, the problem of government as laid out by you and the gentleman in the video, does not go away.
I accidentally cut out the response to the hypothetical first objection! All I was going to say was that both parties engaged in conflict will agree with the arbitrator in good faith. I mixed it in with the response to the second objection.
Watched more of the guys videos, not only is his schema the same as govt it is essentially worse! This system is littered with problems and inconsistencies. We can discuss further if you wish.
@Jon Excellent concerns and questions. Let me try to find information that could be used as a free-market response to your concerns. Thanks.
@Jon You have hit on a lot of the criticisms involved with “anarchic” courts.
You are right, the videos I refered you to are very simplistic. A few men on a desert island, a-la Robinson Crusoe is just a useful way of expressing complex ideas to beginners. But in cities of millions, it doesn’t give a good idea of daily life.
Some of your points that I’d like to respond to, then I’ll mention a couple essays for you to consider.
Arbitrators today are under intense scrutiny for fairness, much moreso than Statist judges. It might seem against “common sense” as is much of Stateless law, but this is how things actually pan out. How exactly does it work, since any one of us could name different reasons why bribery and underhanded dealings *should* corrupt the industry? I don’t know. (Explain email to someone 30 years ago–a totally free way to contact everyone on Earth instantly–then explain how we manage to *not* have 1,000,000 emails each morning. Not easy to explain.) Even professional jurors, like in the 1000 years Irish Stateless period, turn out to be very impartial and efficient.
You go into fine detail of the shortcomings of private courts. The same fine tooth comb could be used for showing potential problems of web companies and the services they provide. Even so, in the most Anarchic industry on Earth by far, Internet companies have been able to produce vast amounts of new wealth, and have done it in ways to satisfy billions of consumers.
Now if you would be willing to consider well thought out logic on Stateless law, I’d love to recommend a couple works.
First is something to have in the back of your mind while watching Deadwood:
“An American Experiment in Anarcho-Capitalism: The Not So Wild, Wild West”
Click to access 3_1_2.pdf
The second might go farther in addressing your concerns about *possible* (I say possible because there is obvious no one correct way) ways of creation & enforcement of law without a State:
Chapter 3 of “Practical Anarchy” by Stefan Molyneux
If you have any book you’d like to share in return, I’d be happy to add it to my Kindle. Regards.
I would not execute rogue bankers. That would be too good for them. Instead, I would confiscate every bit of their property, leave them absolutely financially destitute, and bar them from ever working in any banking, insurance, or brokerage businesses again. They would receive job training that is commensurate with their new-found status… “OK, when the customer comes into the store, you give them a BIG smile, take their order, and be sure to ask, “Would you like fries with that?”.
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New documentary series on Wall St and the development of the CDO
My conclusion on this video is:
1. Yes, housing was built, and loans taken out by people who can not pay.
2. Human Greed and denial never saw the risks in total.
To minimise the damage, I suggest the housing is given to the poor, so that decline and damage to the housing stock is limited. Yes it is Socialism, but I do not see the economy recovering. Housing stock will deteriorate unless individuals are granted property rights over these vacant and abandoned properties.
A new series. “Pimp up my shack” House proud will be a new meaning!
Maybe you should go into TV production…
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