Published on October 3rd, 2013 | by Todd Smekens0
Leadership & Ethics: Do Profits Cleanse Bad Acts?
Leadership & Ethics
The republican and libertarian argument over the past several decades has been ‘less government is better’. They equate less government to less taxes, but that myth is no longer valid – plenty of tax money goes to the private sector. Even when Indiana’s politicians slash food stamps to welfare collecting single moms, they’re told we cannot afford handing out taxpayer money to you ‘moochers’. Yet, they pass Farm bills paying subsidies to their family owned farms (Stutzman, Bachmann, etc).
But in the case of our financial sector, taxpayers provided $13 trillion to bail them out in 2008-09 and the Federal Reserve has pumped trillions more into the financial intermediaries hoping they would loan money to small businesses who could revive the economy. Instead of lending to businesses, much of the new-found liquidity was used to bet on derivatives and stocks thus inflating Wall Street.
During the same time banks have received these trillions of taxpayers dollars, the Banksters have made headlines for their actions leading up to the global financial crisis right on up to today. Our top banks like JP Morgan Chase were bundling toxic mortgage-backed securities and selling them to investors around the world, and then went to the market and bet against them knowing they would fail.
In simple terms, when the Banksters saw the fraud and deceit taking place by mortgage underwriters knowing full well they would explode, banks like JP Morgan Chase, headed by Jamie Dimon, bundled those loans together, and sold them to innocent investors. Some of the folks buying these toxic investments were managers of pension assets for state and municipal pension investments – public employees and teachers retirement accounts.
So, JP Morgan Chase unloaded these toxic investments on the public, while they placed bets against the securities. When the inevitable happened, JP Morgan bragged about not needing a federal bail out.
Yes, it’s called fraud, and they’ve paid fines all over the country for their actions. However, Jamie Dimon, the CEO of JP Morgan Chase, still has his job. He gets his $23 million salary even though his bank committed fraud paying billions in fines. Not just for selling toxic investments, but for rigging LIBOR markets, manipulating grain and aluminum markets, etc.
The funny part is the right-wing ‘tea party types’ are convinced that our ‘liberal media’ conspires with Obama and feeds everybody else in the country ‘Kool-Aid’.
Rarely do we get to see such a glaring difference between a journalist (Alex Pareene from Salon), who seeks the objective truth, versus on-air corporate owned media personalities. It’s awkward, but I think you’ll catch what I’m talking about rather quickly. And please read Felix Simon’s from Reuters comment below:
Felix Simon said,
This view — that profits cleanse all sins, and that so long as you’re making money, nothing else matters — is not normally expressed quite as explicitly as it was here. After all, there are licit and illicit ways of making money, and surely if your profits fall into the latter category, you should not be able to remain comfortably ensconced as a celebrated captain of industry. Besides, banks shouldn’t be obscenely profitable: they’re intermediaries, and in an efficient economy their profits should be quite easily competed away. When bank profits are high, that’s a sign that the bank in question is extracting rents from the economy, rather than helping it to grow.
What are your thoughts?