By Charles H. Green
One of the phenomenal illusions about being an American is that we believe that laws govern all of us equally and that no one is above it. That dogma, taught in every high school civics class, starts to fade once you’ve been on one or two juries, or maybe witnessed an acquaintance skip the criminal justice system with a high-priced attorney.
Michael Hirsh offers an interesting account of the grand bargain struck by JP Morgan this week for $13 billion to settle several investigations among their business lines that the bank is accused of abusing customers, investors and shareholders, as well as lying to regulators and hiding activities.
For that much money, one could buy a couple thousand banks across the country, but it’s estimated to be only about one-half of this bank’s 2013 annual profit.
I’ve heard all the whining about regulator harassment and how all the bad stuff was either in WaMu or Bear Sterns that JP Morgan bought as a favor to the federal government, but I don’t buy it. Guess I’ve seen too much of the business from the inside to know how lots of money makes people act. And JP Morgan has lots.
Much of the American public will feel vindicated by payment of this fine and be convinced that justice has been served. But that line of reasoning is only Muppet-reasoning. The truth is these folks have no idea what sort of profits collectively came out of all these illegal acts and overlook the fact that if it was them individually that committed some of these offenses, they may have spent the rest of their lives in jail.
As Hirsh writes, “the biggest banks are so big today that almost no wrongdoing can threaten their existence. They have become, in effect, something close to sovereign powers. Yes, if you’re a bigger power, like the United States, you can extract “tribute” from them occasionally, as the Romans used to do to vassal states. But you don’t liquidate sovereign powers or put their officials in jail.”
Justice for all? Not in this business.
Read more at National Journal.