Fines are just the cost of doing business.
There are many other scandals: the whole subprime disaster, pollution from plants and the like where no one went to prison and people really should've.
So, we need to both move more towards prison and start digging in to which actual people inside bad corporations were responsible for deciding to do wrongdoing.
"BigCo settled and paid an insignificant $20M out of their river of money" is not very satisfying to read. "Joe Bigshot, former SVP at BigCo, was sentenced to 5 years in jail, and had to sell two of his nine houses to pay the $20M fine" is much better.
To be clear, I’m not advocating these shutdowns as a good idea, there are a lot of implications that I haven’t thought through.
How do people think that all corporations/companies are discretionary?
Well, they sort of do that in Russia. So the CEO/founder of almost any sketchy company is a homeless person that signed the paperwork in exchange for some free vodka. Didn't particularly solve the problem.
Corporate fines just need to be sufficient to make such "business" unprofitable. "BigCo fined for 5% of its market cap" would be quite a deterrent. Except, it won't be happening as long as the regulators are in bed with the big business they are supposed to regulate.
"So, we need to both move more towards prison and start digging in to which actual people inside bad corporations were responsible for deciding to do wrongdoing."
In the post-Enron world, however, executives have learned how to use incentives to motivate their minions to break the law without being explicitly told to do so. On the one hand, this makes it difficult to prosecute those who bear most responsiblity; on the other hand, more effective prosecution might curtail the supply of minions who can be motivated to be compliantly criminal.
[1] https://en.wikipedia.org/wiki/Ian_Kershaw#%22Working_Towards...
Can you find me a reference to this? I could believe it, but by default I'd be surprised if it were true at any real scale.
This seems untenable because large businesses will then be forced to break individual business units into separate corporations to manage risk. At first glance this might seem fine, but you'd basically be creating huge drag on the economy bc large businesses benefit from economies of scale.
If a corporation is a legal person with inalienable rights (as the SCOTUS seems to have decided on), but is intangible and immortal at the same time, what can you do? Any of the below:
* freezing assets (=~ reclamation)
* seizing accounts (=~ civil forfeiture)
* suspend a business license (=~ locking them up)
* introduce a revenue cap (=~ prison labour)
* remove lobbyists (=~ losing voting rights)
* dissolve or nationalise the company (=~ death penalty)
This is by no means an exhaustive list.
Please stop repeating this nonsense. Corporate Personhood is a legal idea, and does not mean a "corporation is a legal person". Without corporate personhood, you wouldn't be able to sue a company for wrongdoing if the guilty employee quit, or even enforce basic contracts.
There are serious problems with corporations not being held liable, but the situation would be worse without Corporate Personhood, not better.
Going back to the original point, personhood is clearly not a requirement for being named in a suit. For more examples you can also see in rem cases, where the government sues property itself for civil forfeiture. 11 1/4 Dozen Packages of Articles Labeled in Part Mrs. Moffat's Shoo-Fly Powders for Drunkenness did not need personhood to be named in a lawsuit. https://en.wikipedia.org/wiki/United_States_v._11_1/4_Dozen_...
It's actually the opposite. You can only sue the government when they explicitly give you permission.
https://en.wikipedia.org/wiki/Sovereign_immunity_in_the_Unit...
Or is it thought of a fundamentally different sort of entity, that yes can enter some sorts of legal arrangements, but isn't granted all the rights of a citizen?
Note I'm a British Citizen, but the same basic legal principles apply over here, and have done for hundreds of years. I know there's a widely held conspiracy theory that this is all new, but jurists and legal scholars have been discussing and applying these principles for a very long time.
Since the Bill of Rights are protections of citizens rights, it has widely been misreported that this meant the SCOTUS ruling de jure recognized corporations to be citizens themselves.
This, of course, is not correct. The majority opinion in part says that "if the First Amendment has any force, it prohibits Congress from fining or jailing citizens, or associations of citizens, for simply engaging in political speech." The key phrase here being "associations of citizens", which the majority interpreted broadly to include corporations. This does not at all bestow personhood or citizenship upon corporations, legal or otherwise. It does afford corporations some protections as they are now legally recognized as "associations of citizens".
And the best part about this would be people cannot hide behind "I am just following orders."
On other hand, let's say, if your average software developer knows that they can be sued into bankruptcy, then they will not release unfinished code and voice strong opposition to it. Thus shifting responsibility to middle managers. Now if middle managers know that they can be sued into bankruptcy, they will not override developers concerns and extend deadline and refuse to push unfinished product. Executives may try to override managers decisions but then responsibility shifts to them and they would not want to lose significant portion of their net worth. Board or managing-owners may try to override CEO, but then they will be responsible and they would not want to be personally sued and lose a portion of their personal wealth.
Yes this may not impact billionaire owners but that is a small number. Most companies will be more ethical and people will have a high degree of personal responsibility.
Please note I didn't pass any judgement on whether a corporate person is a useful construct or whether it should be abolished. I agree it serves a purpose and should continue to exist.
What I would argue is "limited liability" as it applies to and shields company owners shouldn't mean "free from consequences" for the corporation as an aggregate. If I'm reading your post correctly, we don't disagree there.
This reminds me of 2006. The subprime bubble. In California, everyone had six magazines about real estate on their brand new coffee table. You'd go to someone's house, they'd talk about their house. And the houses around them. Anybody people admired, it was because she bought 4 years ago and sold 6 months ago, or better still, because she owned 2 houses and not merely 1. "Real estate agent" was one of the "careers" people rattled off as being respectable, along with doctors and firefighters (lawyers barely, engineers not at all). Everyone was afraid of being priced out of the market, and there was a constant cycle between selling your house at a huge profit, paying out the realtor's fees and taxes and costs of the fixer-upper-ing, and then the dread of having all this money but no house, and buying an expensive new house. With a lot of leverage, but somehow the Ferrari-driving hotshots at the mortgage refinancing found a way to get you a HELOC (home equity line of credit, possible because of the appreciation) so you could buy a hummer. And nobody did anything! Nobody could explain their job then, if what you did for a living made sense outside the bubble you were missing out. I couldn't understand how so many people could contribute to society through sales, retail banking, transactions, appraisers was another one. Unbelievable.
The middle class may not have benefitted like the upper class (as it was then called, now you'd say "the rich" or "the 1%"), but they were still avidly playing the game when the music stopped. And they ended up suffering much more for it, (some rich people suffered too), jobs became much more demanding, but they were in on it. It wasn't just Wall Street that kept repeating "real estate never goes down", it absolutely was Main Street too.
With that said, the regular employees probably have something to do with the dirty work the business engages in. Otherwise they'd be contractors or outsourced, like the janitors and moderators are.
My point is this, why should we punish people who feel they (and in many cases truly) have no choice in whether criminal action was taken? If I held a gun to your head and said, "Just ignore that or I will take everything from you and plunge your life into chaos", what do you do? What is the responsible thing to do? For you? For your family? Your children? Society? The company? The government? For the most part, people working in these companies don't do so becaus they love to work, they do so because they have to to survive and to keep their families afloat.
Joe Schmoe executed the orders because he's terrified if he doesn't, there will be retaliation and his life and the lives of those he loves will be severely damaged. CEO person gave the orders because they know a fine is just the cost of doing business and they don't give a fuck who or what they hurt, what laws they break, what damage they do. Do you see the power imbalance here? Why should we not use "who had the power" as a determination for who to prosecute? Unless you provide protection from explicit retaliation and even the power dynamic some I don't see reason to prosecute Joe over CEO. Even then, there are other forms of retaliation that are harder to verify or see. Think about trying to get rid of bullying in a middle or high school.
Think about it with a sports analogy. If I cheat and take performance enhancing drugs, there’s huge potential upside: I can drastically increase my salary. If the consequence was spread to the team rather than concentrated on the individual it encourages the individual to take that risk. Maybe the team would be forced out of the playoffs. So the team lost their (smallish) chance at a trophy but I get a (largish) chance to increase my salary. In rare cases maybe the individual becomes a pariah. Regardless, if the individual isn’t held disproportionately accountable it incentivizes bad behavior. I think there’s a reason leagues ban individuals for certain behavior.
The same already goes for things like IP and trademark, so that's a fair bet. Good point.
Those asymmetries wouldn't be new, because the corporation as a construct already shields the real people making the decisions, along with the jurisprudence of slaps on the wrist. Are companies held accountable for their "externalities" today, like mass foreclosures in real estate, exploitative labour conditions, poisoning the water supply, oil spills, climate change or destruction of habitats?
In keeping with the prison metaphor, would you work for an "ex-con" company? How about one on "probation" when you've got a family to support? Would you invest in one? As I see it, the potential for self-corrective behaviour is greater with my (admittedly, off-the-cuff) suggestions than the status quo.
Let's assume you have a company like Volkswagen and the corporate executives have decided they play the game of not getting informed about some really shady business practices which are helping the company to earn good money.
Would it make sense for Germany to punish Volkswagen by any of the means you mention, thus weakening the company in relation to foreign car makers, vs. to hold all (or the relevant) executives responsible, seize all their assets, prevent them from working in any administrative position ever again, limiting their income to a certain amount. Like really sanction them.
The company would continue to run, shareholders would be affected minimally, the problem would have been corrected. Of course this is a blue-eyed look at it, but seriously, you also can't do the comparison you are making. They just don't have the same effect.
Now you are getting into too big to fail territory where applying the letter of the law affects the workers/citizens
Similar things would happen due to gross incompetence from workers causing and oil spill (Exxon-Valdez disaster)
All for it, if it actually happened anywhere in recent history. I'm not being facetious, but I'm not aware of any examples or am failing to recall them. Do you have any in mind?
> the problem would have been corrected.
I'm not so sure. Suppose the company made massive profits (or avoided capital expenditure, or limited losses) by cheating at something like emissions. Then, the C-level execs get fired, their assets get seized and they're barred from holding administrative functions again. Did the company not still gain massive profits? Do you think it wouldn't be able to find another set of fall guys, if it pays them enough? Wouldn't the company do it again, if the risk is offset to a bunch of figureheads? Your suggestion would only rule out bad behaviour by those same actors in the future. In a more charitable reading: it would lead to better outcomes than today's rules.
Meanwhile, the damage through emissions and particular matter has been done. According to the WHO (0), about 25 people died of particulate and ambient pollution per 100k people in Germany in 2016. That puts it at 2000 people country wide that year. Did Volkswagen kill anyone by doing this? If so, how many of those could have been avoided had they not cheated on their tests? What about the impact on climate change? How were these problems theoretically addressed by seizing C-level execs' assets without giving them jail time?
> Would it make sense for Germany to punish Volkswagen by any of the means you mention, thus weakening the company in relation to foreign car makers
Yes, because the infractions were socially destructive. After all, the German government's first responsibility is towards the greater good for its citizens. According to Volkswagen's website (1), 44% of their employees or 292,378 people work for them in Germany itself. Directly, of course. Applying a fairly generous, tenfold knock-on effect, less than 4% of the total population - 2% of the active population - works for or with them. According to CNN (2), it represented 2.7% of Germany's GDP.
Also, it would hurt and stimulate competition. Not being able to pay out dividends for a year due to revenue caps, not being able to sell products in Germany that year due to cheating at exchaust measurements, etc might change shareholder voting and investment behaviour. It would damage the brand's image, reduce its ability to attract employees, etc. Maybe market forces would then finally be able to correct bad behaviours. Today's "cost of doing business" slaps on the wrist simply don't seem to have any corrective effect whatsoever.
> you also can't do the comparison you are making.
I was being hyperbolic for effect. When staying within the confines of pragmatism, surely some kind of revision to corporate/criminal law (or its enforcement) is warranted. Most people don't get the death penalty, either, or go to jail. Hell, apparently some people don't even get speeding tickets! The same would probably go for corporate actors even if the consequences were steeper.
[0] https://www.who.int/data/gho/data/indicators/indicator-detai...
[1] https://annualreport2018.volkswagenag.com/group-management-r...
[2] https://money.cnn.com/2015/09/22/news/economy/volkswagen-ger...
Anyone who provides proof of perjury on another member of the board/execs will receive leniency/clemency.
All felonies against corporations must hold at least one person in jail for a minimum of 3 years. Every c-level exec must serve a minimum of 1 year, with very few exceptions... (e.g. CTO started work one day before everything went to shit, literally had no knowledge)...
I also think cops who cover up for, or are "quiet" about other cops who've committed crimes, if it comes out they "knew" and didn't tell anyone should serve the same sentence.
People in authority need to have consequences, the only way to stop corruption is for corruption to be painful and very complicated so that only a "few" get away with it, the more people get away with it the more it happens.
Sham boards/executives only are issues if the prosecution itself is a sham, more concerned with the appearance of the thing than deterrence.
Otherwise, no need to single out the board.
But perhaps the shareholders should bear responsibility as well.
Let's call it what it is, It's a golden parachute.
I'd postulate that taking responsibility and leading the effort to genuinely right the wrongs would earn the company way more godwill from the people and media than activating your trump card which in this case is a mountain of cash to land on after successfully escaping responsibility.
And that's like turkeys voting for Christmas. In most Western countries, governments, political parties and businesses are so intertwined, your member of congress/senate/parliament is probably a businessman (Trump!), or is lobbied by businesses, or the party is funded by business.
That's not to say it won't happen, but it takes something fairly seismic to make governments act.
https://www.justice.gov/archive/opa/pr/2008/September/08-at-...
Unfortunately, there aren't too many of those.
https://en.wikipedia.org/wiki/List_of_companies_convicted_of...
Shareholders are too far removed from personal responsibility, and holding them responsible beyond the financial risk they already carry would basically destroy the rationale for the existence of limited liability corporations.
I do fear shifting too much responsibility to individuals will just absolve the people really pushing for this stuff, in favor of just finding employees to blame, and constantly making individuals fear for their jobs (and being blacklisted), or prison... but the ones responsible will have nothing to fear.
When a corporation runs over a town, why is the person or people "steering" the corporation not jailed?
Without any real research I have often thought that instead of fines for parking violations, noise complaints, (other misdemeanors) etc - having someone spend time instead of money would make those sorts of punishments more equitable.
There are issues - child care if a parent has to spend time. This system would need to accommodate peoples schedules, shouldn't have to miss work for a parking ticket, etc. Much harder to administer than mailing fines.
I think that corporal punishment proposal is batshit insane.
So I guess your question is really should this be extended to more low-level offenses like minor traffic violations?
It's an interesting question. In Switzerland, for example, speeding above a certain level ceases to be a fixed fine and is instead a percentage of your income. I'm a fan of that. Fixed fines tend to discriminate against the poor disproportionately.
I can imagine there are many people who would be better off and would prefer 2-4 hours of community service over a $100 fine. So that should certainly be an option instead of paying the fine.
Yeah I think the idea probably does have merit.
I imagine someone has already thought of this from a tax point of view.
Maybe some % of their net worth divided by their age (working age?) - say if they have 100 million dollars and are 60. 60-18 = 42. We would fine X% of 2,380,952.38? The idea being an attempt to come up with what their yearly salary could have been based on current value.
I am sure there are some excellent flaws with that approach as well.
Fun to ponder.
Calculation is based in your total income (including capital income). Most rich people would be affected due to capital income.
HN has this fantasy of $10k speeding tickets. In reality it's gonna look like 100mph speed limits, $100 fines for you and $10 fines for your nanny.
Usually.
>Perhaps a more sophisticated society will one day know our fears and punish us accordingly (cue film script).
That was a plot line in 1984 and IMO flies in the face of equality under law.
If you have money to light on fire you can hire attorneys to delay, appeal, etc. Eventually, it will catch up.
https://www.theatlantic.com/business/archive/2015/03/finland...
But then literally no court anywhere in the world would agree that a $1BN fine for speeding is "punishment fitting the crime". It's just not.
Like, I like idea in general, but there will ways be people immune to it. Like others have said - the only real punishment is time. And not even necessarily prison - just make a CEO do 300 hours of community service, see how that works out.
We're inadvertently about to make the dystunction of our legal system everyone's problem, which is when you'll see change.
Where I live, that's what you pay when you drive 10mph too fast.
I like you. This is good.
Also Finland does have option to turn some of these day fines to prison time at rate of 4 to 1..
Well educated, comfortable people who rob others of their livelihood? They deserve state penns, just like the poor folks who got three strikes for walking off with hedge clippers.
As a traveling consultant, this was a real wrench into his job and for his employer. He'd have to travel back every Thursday because he could not afford a Friday flight cancellation and missing service. Now, this court and county insists they structure it this way so to have the least impact on people. But he would arrive and watch all his crime peers arrive by taxi, foot or bike (bus service to that area on Saturday morning was a no-op).
The vast majority of his peers were not people who could afford $20 each-way taxi or uber trips and worked jobs on weekends. They lost their jobs because their licenses were suspended. He suspected many of them gave up trying to comply and parked 1/2 mile away, driving their cars with with suspended licenses.
Community service is basically a racket and not necessarily a better work/life deal than prison.
--
“Bernie really was a successful businessman with quite original insights into the market, and he’s continued applying his business instincts in prison,” Fishman said. “At one point, he cornered the hot chocolate market. He bought up every package of Swiss Miss from the commissary and sold it for a profit in the prison yard. He monopolized hot chocolate! He made it so that, if you wanted any, you had to go through Bernie.”
https://www.marketwatch.com/story/new-series-casts-bernie-ma...
--
Bernie wasn't trapped with them. They were trapped with Bernie.
He successfully managed to leverage market forces to create economic inequality and make himself 'rich' in the micro context he operated in.
Which is a great example for why great wealth is not a virtue, a 'free market' is not a savior, and why greater regulation and taxation on the super wealthy is acceptable - they got there by being, as you say, unbelievable assholes.
Prison is pretty inhumane, especially in the context of a limited lifespan. Even if we're immortal, it's still inhumane.
Moreover, how does making people go to prison fixes anything? It's just a way to assign punishment and blame people.
Beyond that, prison is inhumane as a rough function of where you are. Maybe you're thinking of a particular prison system.
How does it fix anything? It should primarily be a deterrent, and secondarily a way to protect society from dangerous people.
I could definitely see a class system forming in private prisons (it is sort of there already). For public prisons, that's harder. They have to convince law makers to pass laws to enable them to get special treatment. That'd be pretty unpopular.
But, then again, MJ legalization is very popular and it still hasn't happened yet so who knows if policy popularity even sways politicians at this point.
That said, the reason for jail is to not only rehabilitate but also to deter.
The problem we have is that white collar crimes almost never result in jail time for the rich. The financial deterrent is just ineffective at stopping bad behavior. They can run the risk/rewards calculations and often come up with the conclusion that "we'll make more money than we lose to a fine" and they proceed to do the bad behavior.
A good example of this is fireworks at disneyland. They pay fines for their daily displays and write it off as a cost of doing business. So what's the point of the fine? Weren't we trying to stop them from launching fireworks or was it just to extract money from a theme park?
Now imagine if the action for launching fireworks was the general manager of disneyland or their manager serving 2 days in jail. I can assure you, those fireworks would be stopped the next day.
That's the point. If the law is only a set of rules for the poor how can anyone be confident that it is going to work or be applied fairly? If you can buy your way out of compliance then what's the point?
I doubt if it ended up with the CEO and going to jail that they'd keep it up.
If you're talking about prisons, nearly 4 times as many people are in prison for violent crimes (robbery, assault, rape, murder...) than drug charges.
US sentencing has always seemed absolutely crazy to me, to the point where if I through some magic found myself on a US jury I'd have a hard time justifying a vote to convict, and the sentences seem to be more about vengeance than about rehabilitation or making society safer.
I mean, if you think that isn't an insult to the victims, their families, etc.; if you don't think that's absolutely crazy, and I don't know what to tell you, man. Heck, if killing someone, let alone that many people, isn't so bad, why do we care about any other crime as much as we do? Why all this ridiculous outrage in the public square about all sorts real and imagined sins when life itself is so cheap?
Whatever the flaws in the American justice system (and there are many), Norwegian law and the sensibilities behind it are insane in this respect.
> sentences seem to be more about vengeance than about rehabilitation or making society safer.
Justice has more than one aim. Deterrence and rehabilitation are two of them, so is the preservation of social order. But justice is also retributive. Retribution isn't about hate, whatever modern confusion tells you. That's why we aim to have qualified impartial third-parties (judges) who are supposed to adjudicate such things instead of leaving things up to a hate-filled lynch mob, one that often confuses envy with anger at injustice.
> to adjudicate such things instead of leaving things up to a hate-filled lynch mob
See the duality of your own post.
If I try to be impartial, I can hardly see the point to any sentence larger than a couple decades. When you get to those levels of sentencing where you basically decimate the total useful lifetime of someone, you might as well kill the person.
... and I guess I understand something now.
> See the duality of your own post.
That reads as though you scored some virtual point, but I can't figure out what you're saying. Can you clarify?
And Norwegian society operate just fine with Breivik playing xbox in prison.
In the end, retribution still doesn't fix anything. We're machines. We should act like this is true, not surrender to our monkey brain.
Breivik is unlikely to get out because he is likely to continue to be deemed a threat on every re-evaluation. But if he demonstrates that he is reforming and is no longer likely to be a threat, then yes, that is not just normal to me but desirable.
It is a system that works given that re-offending rates in Norway are low.
I'd consider it an absolute insult to victims of violent crime to focus on things like retribution over policies shown to actually reduce the rates of future crime.
Valuing the perpetuation of violence for the sake of retribution over reducing the number of victims seems to me the height of barbaric and immoral behaviour.
But even without any benefits to re-offending rates I'd still consider it barbaric to threat prisoners badly for retributive purposes. Free will is a fiction, and so when we are punishing people for anything other than the practical purposes of keeping society safe we are no better than those we assign blame for crimes, we just tell ourselves we are.
If we "step into the fiction" so to speak, there is reason for passing judgement if passing judgement leads to better outcomes. A lack of agency does not shield us from those outcomes.
But it makes retribution as a justification fundamentally immoral. Of course, there's recursion here - retribution for retribution would be no better.
You have a very warped view of justice. Rape isn't "inhumane"? Murdering someone isn't "inhumane"?
In the case of premeditated murder the murderer forfeits the right to life, so the death penalty, especially for especially egregious acts, is entirely just. To claim it isn't is unjust and an insult to the victim. Mercy only has meaning when the penalty is deserved and prudence will dictate whether the peantly ought to be exercised in the given circumstances given the best account of the facts and our limited knowledge (hence the need for judges who have the authority and the perspective to better adjudicate dispassionately instead of fueling some Sicilian family feud or a lynch mob that confuses envy with anger at injustice).
> Moreover, how does making people go to prison fixes anything? It's just a way to assign punishment and blame people.
Uh, yes? OBVIOUSLY, if someone is GUILTY, he DESERVES blame and punishment. I don't know why this is so difficult for you to understand or how you could possibly think this is wrong or that a world without them is preferable or even feasible. If someone has freely committed a crime, if he has chosen to commit that crime and has carried it out, then OBVIOUSLY he bears responsibility for it and is culpable for his actions.
Unfortunately, the highest levels of financial crime are tied to lawmakers and corruption of the highest authorities of white collar law enforcement.
It's usually outsiders and smaller operations that get caught. Corporations are in charge of a corporate oligarchy, which is the United States.
These entities are "too big to fail". They are so essential to the economy that the best you can hope for from the government is maybe a scapegoat going to a comfortable prison or a hefty fine.
TL;DR
Bringing down the largest corporations for crime is like trying to arrest the US president for war crimes.
Norway faced a banking crisis in the 90s; to solve it, the government simply invalidated the shares and took control of the bank.[1] The government later reprivatized it - i.e. sold new shares - once it was no longer failing.
That seems a pretty okay approach for entities that are too big to fail: let the shareholders, not the public, pay the price of failure.
(You need a sufficiently strong government to do it, obviously.)
Fining a corporation 20 million for stealing 500 million... I mean I don't need to point how ridiculous this is.
Of course, direct personal responsibility for the people calling the shots. Someone robbing a liquor store causes an infinitesimal amount of damage and misery compared to what powerful corpos lead by powerful men can cause.
Sounds like an aspirational goal to me! Long past time somebody did.
Yet the media implicitly made him into a scapegoat for the GFC with heavy coverage of his trial filling the airwaves just as the public was authorities hold the perpetrators responsible. The media never explicitly claimed Madoff was part of the cause of the GFC, but rather used constant coverage of him to deflect attention from the real perpetrators of the crisis, who got away clean.
What the media doesn’t report is often more telling about its integrity and agenda than what they do report.
not true. people did go to jail for their role in the 2008 banking crisis
Isn’t that just because the fines aren’t high enough?
I think we should make more fines based on an individual’s (or company’s) net worth.
This is a pretty common sentiment, but nobody can really articulate specifically who should go to prison and what crime they committed.
Being stupid, arrogant, reckless and willfully ignorant with money is not illegal. Just because hundreds of billions was lost does not mean that there's any criminal act. Major companies, and even financial institutions, fail all the time without there being any sort of crime.
It's easy to fall into the trap of looking for mustache-twirling villains when you see a broken system. More likely the real culprit are misaligned incentives and dysfunctional institutions. If you actually dig into the details of the subprime crisis, the latter story is the much more plausible one.
If you disagree, you have to specify who you think were the criminal masterminds behind the crisis. And more important, you have to show that you can prove criminal action and intent beyond a reasonable doubt. (And don't forget any would-be defendants will have access to the best legal defense teams on the planet.) I've never heard anyone actually present this case instead of just giving vague platitudes about how "the bankers should go to jail".
The only real candidate for viable criminal prosecution are the mortgagees themselves. Many fraudulently misrepresented their income, assets or employment on their applications. And it would probably be hard for them to claim that they weren't aware. (In contrast the mortgage brokers could always claim they didn't bother verifying income because they genuinely trusted the applicants. That's obviously BS, but criminal liability is held to a much higher standard.)
That is why Madoff ended his life in jail while banks/funds CEO in the 2008 are now richer than ever stealing money from the poors and taking 0 accountability for the subprime crisis that destroyed a whole decade. In my book he was better than any of those bankers. He shown to the world that some people are smarter than the banks and that they will be severely punished if they do not abide by the laws that helps those banks to win.
EDIT: Yes, non-profits and pension funds as well. That's not taking from the rich. Madoff was not Robin Hood.
And, it's ok to steal as long as you only steal 25% of it?
Is your gold and silver ewes and rams? Shylock cannot tell. He makes it breed as fast.
If you do believe interest is theft and time has no value, you can act as a kind of Robin Hood by putting all of your money into bonds from Goldman Sachs, the US government or whoever you deem the worst perpetrator of this theft. You'll literally be stealing from them!
But what's really you're just parroting baseless conspiracy -- Citadel is a legitimate business which provides a great service to Robin Hood users. Payment for order flow is very good for the retail investor, reducing commissions and improving prices, the recent episode of Bloomberg's Odd Lots podcast with Doug Cifu went explained exactly how this works, it's a classic example of incentives aligning. Also by design no market maker gets access to all Robinhood transactions.
Your argument that it is to help retail traders to enter for cheap into trading is fallacious. It is exactly like saying getting into real estate nowadays is a no brainer due to low interest loans. even tho the loan means borrowing money for 30years and living like a slave to pay a rent that the generation before you got in 10years. In the same ways FB makes money out of people Citadel and Robinhood does it 0 conspiracy there
If you think Citadel and its ilk are bad, you should see the guys they replaced! Market making is as old as the market itself, the modern advancements allow commission-free trading, massive liquidity and tiny spreads, before you'd be paying commission and buying a stock for dollars more than you could sell it for. They're good for the market and it's a shame this crazy conspiratorial thinking (which is never backed up by any real understanding) has taken hold of so many people.
What do you think they're doing in that time? Please be specific because I have no idea what part of this mutually beneficial, standard operating procedure is meant to be a criminal conspiracy. The people losing out are institutional investors who cannot access the same execution quality as a retail investor, because they trade in greater volume and are more likely to be behind a market move.
Maddoff was a dumb thief, and very cunning indeed but he operated in silence. That’s not to say the same thing about the others who ‘gamged up’ knowing that in case of failure many fingers would be pointed out in too many directions.
If you plan your life around having $1 million in savings because that's what your statements from Madoff say, recovering 75% of the fraction you put in is pretty bad.
That's an interesting point and probably true. The identity of your victim matters as much as the crime. It isn't like a serial car thief would receive the same sentence.
I've always wondered if jail was appropriate for purely financial crimes. Maybe simply pauperizing people is the right answer and keep them pauperized from some time.
Just imagine a prison system that doesn't contain financial criminals or drug cases. Transfer a certain amount of punishment to Singapore-style caning (probably a better mind-modifier than 6 months in the county clink) and you could shrink the whole industry to a tiny fraction of it's current size.