It’s been over a year since Wall Street sent the US — and the world — to the precipice of complete economic meltdown.  Yet we may be right to ask a simple question: Why haven’t we seen any of the Wall Street fat cats — whose greed-driven and fraudulent activities brought about the crisis — shackled and sent off to prison, where many no doubt belong?  Well, Kevin Hall at McClatchy has recently asked the same question.

There have been some high-profile arrests and federal convictions of financial giants — such as Ponzi scheme king Bernard Madoff and Stanford Financial Group chairman Robert Allen Stanford. They weren’t among the causes of the financial meltdown, however, just poster boys for an era of lax enforcement, weak regulation and devout faith in free markets.

“A lot of people who are responsible (for the crisis) seem to have gotten awfully rich in the process,” said Barbara Roper, the director of investor protection for the Consumer Federation of America.

The absence of what many would call justice stands out all the more because past financial crises always had their villains. The depression-era had electricity and railroad magnate Samuel Insull, who partly inspired the movie “Citizen Kane.” The savings and loan crisis of the 1980′s had banker Charles Keating. Energy giant Enron Corp.’s spectacular collapse offered the late CEO Kenneth Lay, a Texas crony of President George W. Bush.

Hall goes on to note that there are some potential convictions coming.

The FBI has more than 580 large-scale corporate fraud investigations under way. At least 40 of them are scrutinizing players in sub-prime mortgage lending, which was the first domino to fall and triggered a global financial crisis.

“The investigations are very complex; it’s not something that’s going to turn overnight,” said Bill Carter, a spokesman at FBI headquarters. “They are labor intensive. They involve a review of records.”

To date, the closest thing to a prosecution of a major actor in the financial meltdown is a civil fraud case that the Securities and Exchange Commission brought on June 4 against Angelo Mozilo, the perma-tanned CEO of mortgage-lending giant Countrywide.

Yet thus far all we have are a few successful civil cases that amount to little more than a slap on the wrist of these economic titans.  US Senator Bernie Sanders (I-VT) recently addressed the Senate on this issue and makes a compelling case for the need for justice now and, in the process, puts the lie to the “too big to fail” nonsense about these financial institutions:

Technorati Tags: Bernie Sanders, Capitalism, Wall Street bailout

Here’s a great video of a brief exchange between Sen. Bernie Sanders (I-VT) and Treasury Secretary Timothy Geithner discussing the details of the bailout.  While there are some important and valid criticisms of Sen. Sanders regarding his support for nativist, reactionary policies against immigrants recently, in this video he does rightly challenge Geithner and the new Obama administration over whether they will hold the very Wall Street executives responsible for the current crisis accountable to the American taxpayer.

The Treasury Secretary does his best avoiding Sanders’ questions about whether we should change the leadership on Wall Street at this time due to their failures and the vital issue of transparency concerning where taxpayer’s money is spent.

Technorati Tags: Bernie Sanders, Capitalism, economy, Timothy Geithner, Wall Street, Wall Street bailout

So, as President Bush signs into law the disgraceful $700 billion bailout of Wall Street crooks following the House reversal and capitulation, few in the media have noted Vermont Senator Bernie Sanders statement on Wednesday opposing the bill.  Speaking from the Senate floor, he laid out a litany against the Senate-devised plan, which now includes an additional $150 billion in earmarks.

This bill does not effectively address the issue of what the taxpayers of our country will actually own after they invest hundreds of billions of dollars in toxic assets. This bill does not effectively address the issue of oversight because the oversight board members have all been hand picked by the Bush administration. This bill does not effectively deal with the issue of foreclosures and addressing that very serious issue, which is impacting millions of low- and moderate-income Americans in the aggressive, effective way that we should be. This bill does not effectively deal with the issue of executive compensation and golden parachutes. Under this bill, the CEOs and the Wall Street insiders will still, with a little bit of imagination, continue to make out like bandits.

This bill does not deal at all with how we got into this crisis in the first place and the need to undo the deregulatory fervor which created trillions of dollars in complicated and unregulated financial instruments such as credit default swaps and hedge funds. This bill does not address the issue that has taken us to where we are today, the concept of too big to fail. In fact, within the last several weeks we have sat idly by and watched gigantic financial institutions like the Bank of America swallow up other gigantic financial institutions like Countrywide and Merrill Lynch. Well, who is going to bail out the Bank of America if it begins to fail? There is not one word about the issue of too big to fail in this legislation at a time when that problem is in fact becoming even more serious.

This bill does not deal with the absurdity of having the fox guarding the hen house. Maybe I’m the only person in America who thinks so, but I have a hard time understanding why we are giving $700 billion to the Secretary of the Treasury, the former CEO of Goldman Sachs, who along with other financial institutions, actually got us into this problem. Now, maybe I’m the only person in America who thinks that’s a little bit weird, but that is what I think.

This bill does not address the major economic crisis we face: growing unemployment, low wages, the need to create decent-paying jobs, rebuilding our infrastructure and moving us to energy efficiency and sustainable energy.

But the main question Sanders asked was, if taxpayers have to pay for Wall Street greed and recklessness, “whose money should it be?”  He proposed an amendment that would require the richest Americans to pay for the bailout by raising the tax rate by %10 on anyone earning more than $500,000 or any family earning more than $1 million (from the current %35 to %45).  It would raise more than $300 billion over the next five years.  It seemed to me to be extremely reasonable considering that the surtax would only effect %0.3 of tax payers.

Of course the final bill did not include the Sanders amendment.  But there’s no reason a tax increase of this sort can’t be implemented, especially if support for it grows.  Public opposition to the bailout, especially in the blogosphere, was and remains vocal, but elite interest, aided by the mainstream media, ultimately won out.  However, we still have to wait and see how deep the backlash will go and whether it will continue.

Technorati Tags: Bernie Sanders, Wall Street, Wall Street bailout