October 12, 2013
Newspaper accounts anticipate that JP Morgan Chase, the huge banking and financial services company, is close to an agreement with the Department of Justice over charges brought against the company for its mortgage bond policies leading up to the 2008 economic collapse. JP Morgan Chase hopes to avoid legal proceedings by agreeing to settle the matter for around $11 billion with the caveat, of course, that they are admitting no guilt.
Just over a week ago, the same firm agreed to another settlement of just a bit less than a billion dollars over the trading fiasco dubbed “the Whale.”
In addition, JP Morgan Chase has paid out settlements of $1.8 billion for mortgage-foreclosure practices over the last year.
In the same time frame, the company conceded nearly half a billion dollars for the charge of energy market manipulation. Add another $300 million for claims lodged against mortgage-backed securities.
And we mustn’t forget the nearly quarter-of-a-billion settlement against allegations of muni-bond manipulation in 2011.
With these six likely settlements in three years alone totaling about $15 billion in charges over questionable practices, one might conclude that JP Morgan Chase was a serial violator.
It might make one angry that JP Morgan Chase executives receive no penalty— indeed continue to receive large bonuses— despite these violations.
It might make one angrier still to scrutinize the long list of earlier settlements and penalties incurred by the firm, including for intimate involvement with the criminally corrupted firms of Enron and WorldCom. One might further mention JP’s derivative scam that nearly drove Alabama’s largest county into bankruptcy, a maneuver that pressured a three-quarter-billion-dollar settlement.
Further outrage might spring from the company’s record fine paid to the United Kingdom’s Financial Service Authority in 2010.
Certainly JP Morgan Chase’s admission in January of 2011 that it systematically overcharged thousands of overseas military personnel on their mortgages would prompt the ire of many.
And then there is the matter of our government rewarding what appears to be a criminal enterprise with $25 billion in TARP funds to guarantee its managers didn’t run the corporate ship aground on the shoals of the 2008 economic crisis! A helping hand to a criminal syndicate.
Understandably, some have suggested that “too big to fail” should be construed as “too big to jail.”
But JP Morgan Chase, like other big time criminal gangs, is quick to throw its associates under the bus to avoid prosecution. The mega-bank has postured as the victim of its own mortgage originators while offering to cooperate with federal prosecutors and deflect attention from its own role. A recent report by investigative reporter, Rich Lord, has shed light on this practice in Western Pennsylvania (Indicted Attorney points a finger at JPMorgan, Pittsburgh Post-Gazette, 10-6-13). To the surprise of no one but, perhaps, Federal prosecutors, documents have surfaced that prove JP Morgan’s foreknowledge of mortgage fraud. Meanwhile, JP has bought immunity by claiming victimhood!
In a brazen statement of contempt for justice, Attorney General Eric Holder excuses banker criminality because “…if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.”
It will “…have a negative impact…” ?
Has Holder conveniently forgotten that banking industry practices nearly crushed the global economy five years ago?
Maybe the generous contributions that the financial industry makes to both political parties better explains this blind spot in the criminal justice system. Maybe the incentives spread thickly among the Washington legislators by bank lobbyists account for the apparent immunity. Certainly the charming, boyish grin of JP Morgan Chase CEO Jamie Dimon seems ever welcome in the halls and chambers of government.
It would be unfair to JP Morgan Chase to not note that the other mega-banks are equally criminal in their practices. Just in the last two weeks, CitiBank has incurred a $30 million fine and reached a $395 million settlement, while New York is suing Wells Fargo.
In its entirety, the pattern of mega-bank irresponsibility and criminality is breathtaking. Even more shocking is the realization that these institutions are not above the law, but actually own the law!
To give some perspective, the welfare system in the US— known since its New Deal inception in1935 as Aid to Families and Dependent Children— was deemed too expensive, wasteful, and unnecessary by the Clinton Administration and its Gingrich-led Republican legislative rivals in 1996. Accordingly, they dramatically cut a program that provided a floor to the living standards of over 12 million people, 8.4 million of whom were children. In 1996, the program cost a little over $20 billion (under $30 billion in 2012 dollars).
The fines and settlements made by JP Morgan Chase over the last 3 years alone would have paid for over half of the total annual cost budgeted for welfare before its radical surgery at the hands of the bi-partisan government!
Add in the fines and settlement costs of the other serial criminals of the financial sector and we could likely fund a robust welfare system today.
Surely, this is a world turned upside down, a world devoid of compassion for the poor and the needy and blind to the corruption of the rich and powerful.
With Reagan-era ideologues finding happy, well paying jobs with think tanks, big media, and universities, the drum beat of “welfare reform” swept the US in the late eighties and early nineties. They blamed welfare for increasing unemployment, creating dependency, unmarried mothers, and violent crime. The symbol of welfare abuse was the unmarried African American mother of young children living off food stamps and a welfare check. Popular media amplified and exaggerated this image.
And the liberals?
They mounted a tepid campaign of measures to shrink the welfare roles, a campaign that prominent observers like Arthur Schlesinger Junior labeled Reagan-emulating “me-tooism”. He denounced the Democrats as Republican “fellow-travelers.” Thus, it should be no surprise that “welfare as we knew it” was gone by 1996.
With no one to speak for her, it was so easy to demonize a young mother and her innocent children. The cowardly, spiteful courtiers of our ruling class won the one-sided battle to cast millions of this nation’s most disadvantaged into greater insecurity.
But Jamie Dimon and his banker cohorts needn’t fear the self-righteousness or the indignation of those executive and legislative child abusers who found it so easy to undercut the welfare of children. Their multi-billion-dollar criminality goes unpunished and will go unpunished by the Administration and the two-party legislators who govern our lives. They continue to blatantly rob and prey on us with impunity, knowing that a tolerable spanking is the most they will ever face.
Today, those same legislators of both parties are looking to cut other elements of the social safety net. And the game is the same as it was twenty years ago: the Republicans raise unfounded, irrational fears (in this case, debt, bankruptcy, economic chaos) and the Democrats offer a feeble defense and make an eager “compromise.” Yes, they are coming after our Social Security, Medicare, and Medicaid.
In the short run, we have to raise hell before they make their grand “compromise.” But in the long run, we have to find and vote for real peoples’ candidates and not corporate Democrats. You’ll recognize them when they campaign to put the bankers in jail and nationalize the banks!
October 12, 2013