This is the last post about crime and punishment for awhile, I promise.
Why do we punish anybody at all?
There are three reasons for federal prosecution: general deterrence, individual deterrence, and justice for the victim.
General deterrence warns the whole community of possible offenders. Individual deterrence deters the individual caught from repeat offense. And justice for the victim speaks for itself.
After the financial crisis, there was no justice for victims. Nothing for the 13 million people who spent three years in post credit-bubble unemployment. Nothing for the retired victims pushed into annuities, life settlements, and junk bonds in a desperate bid for income during the neverending zero interest rate policy.
As for the people who caused the mess?
Let’s look at what happened to the bank execs who were kicked out in the wake of the 2007 financial crisis:
Merrill Lynch’s chairman Stan O’Neal retired after announcing losses of $8bn, taking a final pay deal worth $161m. Citigroup boss Chuck Prince left last year with a $38m in bonuses, shares and options after multibillion-dollar write-downs. In Britain, Bob Diamond, Barclays president, is one of the few investment bankers whose pay is public. Last year he received a salary of £250,000, but his total pay, including bonuses, reached £36m.
And Ken Lewis of BoA departed in 2009 with a $53 million pension package .
I don’t know what would constitute justice for the victims here, but sure as hell not this.
Deterrence has largely come in the form of corporate fines. Matt Taibbi describes how it works in The Divide:
Where the fine is insignificant compared to the company’s revenue, the settlement is almost an antideterrent. It just helps set the price for getting caught, and it makes the cost-benefit analysis for criminal behavior simpler .
Eight years after the financial crisis, the Justice Department has squarely failed on all three fronts. Individual deterrence was a joke, justice for victims nonexistent, and financial crimes can now be committed with the aid of a cost-benefit analysis.
This is just one example of how the system is fucked up and we can’t do a thing about it. We’re forced to play by the rules that the corporations paid to have written.
And it may seem a stretch, but in a way this explains the rise of someone like Trump.
Donald Trump is a troll and the political process deserves to be trolled. In fact, Trump’s most (only?) salient feature is that the establishment consistently hates him.
Americans are pissed because the system has failed them. Pissed because of stagnant wages, the lopsided recovery. Pissed because their lives suck and they blame the Man. The fact that the establishment hates Trump makes him an attractive candidate to anyone who hates the system.
Because every enemy’s enemy is a friend.