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> Taibbi: How Can We Expect Wall St. Thieves to Stop Stealing Unless We Throw > Them in Prison? By David Sirota > http://www.alternet.org/story/148916/taibbi%3A_how_can_we_expect_wall_st._thieves_to_stop_stealing_unless_we_throw_them_in_prison > > With financial fraud now so sophisticated and pervasive, we clearly need > zero-tolerance solutions to change Wall Street's culture. > > *November 18, 2010* | > > > > Often, the most provocative ideas arise after swigs of whiskey. This is > especially true when a *Rolling Stone* reporter is around -- and, as I > recently learned, it's all but guaranteed when that Rolling Stoner is Matt > Taibbi, aka the heir to the magazine's gonzo throne. > > I had the chance to hang with Taibbi last week after he spoke to a Denver > audience about his new book, "Griftopia," which argues that Wall Street's > bubble-bailout cycle has been one of the greatest -- and least prosecuted -- > crimes in history. His presentation was serendipitously timed, coming the > same week as a local Bonfire of the Vanities-esque scandal was underscoring > the speculator class's privilege. In Colorado's own Bonfire of the Rockies, > a local prosecutor had just reduced hit-and-run charges against a fund > manager because the prosecutor said a felony would have "serious job > implications" for the Sherman McCoy in question. > > Over drinks in my living room, Taibbi and I pondered the financial Masters > of the Universe and their maddening infallibility. I asked him why they > never fear facing legal consequences. Do they believe they're untouchable? > Or do they know law enforcement won't pursue them? > > "They're not afraid because other than Bernie Madoff, when was the last > time someone on Wall Street faced any real punishment?" he responded. "Sure, > a few go to jail once in a while, but they're usually out in a few months > and then on the speaking circuit. That's not exactly a deterrent against bad > behavior that's making you millions." > > Deterrence -- it's the vaunted idea behind "tough on crime" sentences for > violent offenses. Lock the door, throw away the key, and the theory says > that heinous acts will be prevented. > > However, things haven't worked out that way because the toughest "tough on > crime" policies are most focused on crimes of passion, derangement and > destitution -- crimes that are often not calculated and therefore not > deterrable. This is probably one of the reasons why the murder rate has been > higher in death penalty states than in non-death penalty states, leading > most criminologists to conclude that capital punishment does not hinder > conventional homicide. > > But what about crimes of economic homicide? These are the opposite of > crimes of passion. When, say, a speculator securitizes bad mortgages and > peddles them to pension funds as safe investments, that fraud involves > exactly the kind of calculation that might be deterred via the prospect of > harsh punishment. > > "What if a bank CEO was given life without parole?" I asked Taibbi. "What > if instead of country club jail, one of these guys was shown experiencing > prison like a regular convict? That would have to stop some of the worst > stuff, right?" > > "Right, and go a step further," Taibbi countered. "How about putting a few > of them in the electric chair? Are you telling me Goldman Sachs execs aren't > then going to change?" > > We both busted out laughing -- and hard. Not at the truth behind the > theorizing, but at the idea that any of it would actually happen today. In > 2005, Washington couldn't even pass a post-Enron proposal to hold CEOs > legally liable for their companies' corporate tax fraud. So the notion that > the same money-dominated capital will now subject CEOs to anything remotely > "tough on crime" is, well, far-fetched. > > And yet, the hypothetical is compelling, isn't it? That's because it > highlights how our society misapplies deterrence -- and how it might apply > the concept more successfully. > > The necessity of such a criminal justice shift should be obvious. With > financial fraud now so sophisticated and pervasive, we clearly need > zero-tolerance solutions to change Wall Street's culture. Indeed, without > true shock-and-awe deterrence, most regulatory reform will likely be an > ineffectual thumb in the economic dike -- just as the thieves desire. > > > > ________________________________________________ Send list submissions to: Marxism@lists.econ.utah.edu Set your options at: http://lists.econ.utah.edu/mailman/options/marxism/archive%40mail-archive.com
