Monday, November 4, 2013

US Banks pay $93 billion in fines, no jail time for Jamie Dimon

Richard Mellor
Afscme Local 444, retired

Last Friday, Congress cut funds to food stamp allotments or the (SNAP) Supplemental Nutrition Assistance Program as it is now called.  Some 47 million Americans get foodstamp assistance and over half of them are children; this action will mean increased hunger and all the problems that come with it.  Perhaps the best example of the monopoly the 1% has over US political life and the futility of relying on Democrats to resolve our problems is Kevin Fagan’s comments in the San Francisco Chronicle, when he writes that those who need the benefit to eat ”…have no hope of getting their lost benefits back, considering the only debate in Congress over the Supplemental Nutrition Program ---food stamps----is how much further to slash it.”

This is the lesser of two evils politics in action and it is the norm here. It is overwhelmingly the reason 138 million or so voters stayed home in the last election and why US elections revolve around moral issues and identity politics; prayer in schools versus abortion. Gay rights versus gun rights and so on.

Conservatives are now arguing that the economy has progressed sufficiently that the $80 billion a year US food stamp budget is “bloated”. The food banks can pick up the slack.
Tim Huelskamp, a Tea Bagger farmer from Kansas expresses his support for taking food out of the mouths of babes saying he is “against freeloaders”  and that “You can no longer sit on your couch or ride a surfboard and expect the federal taxpayer to support you.”

 Huelskamp, the Bible thumping, anti-abortion hick had no problem receiving more than $400 million in government money in the form of a Homeland Security animal research lab for his district mind you, and his ire isn’t exactly directed at the banks either.

In the last three years the six major Wall Street banks have paid $67 billion in settlements and penalties for their fraudulent activities that led to the Great Recession.  On top of this figure we can add the $13 billion that JP Morgan has agreed to pay the government for its role in the crash and the misery that followed it. Morgan was also hit with a $1 billion fine for the questionable trading practices at its London branch that has notched up some $7 billion in losses.   With B of A’s $8 billion penalty for selling faulty mortgages to Fannie Mae and Freddie Mac Business Week reckons the total in penalties paid to the government at around $93 billion.

The banks have no remorse whatsoever for shafting the US taxpayer and the US population in general, they are riddled with corruption.  JP Morgan is still under investigation for currency manipulation, rigging interest rates and possible bribery in China. The company is spending some $2 billion every quarter defending itself against lawsuits. 

The public’s anger at the bankers is still high.  In a recent New York Times poll 79% of the respondents said that not enough bankers had been prosecuted for their role in the financial crisis that began with the collapse of the subrime housing market, “It remains the case that no high-ranking Wall Street executives have been criminally prosecuted or seen the inside of a courtroom since 2008.” Says Bloomberg BusinessWeek.

The banks profits are so lucrative though that they’ll face the music with fines, better that than jail terms.  The banks just had two straight quarters of record profits according to the FDIC.  “This years fines may be large but don’t come close to undoing the profits banks mad in the subprime craze’s headiest days” says BW. Barry Ritholtz, author of “Bailout Nation” puts it a another way, “We’ve taken what used to be jail terms—and that should in theory prevent that kind of behavior from happening—and instead it became, ‘Let’s engage in some extralegal activities, we’ll pay some penalties, but we’ll make a load more in revenue,’” he says. “If I steal a billion dollars and have to give back $500 million as a fine, I’ll take that trade every day. Every day.”

Of course, even jail terms doesn’t stop these thieves although jail terms are few and far between.  Corruption, bribery and thieving is like breathing oxygen to them, they have to do it, it’s part of their culture.  These figure we can be sure are just the tip of the iceberg.  The only reason there is an issue at all is that the bankers also steal from other coupon clippers, investors and such.  There has to be honor among thieves.

Meanwhile, for those 47 million that rely on food stamps for nutrition----let them eat cake.

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