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.”
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!
Zoltan
Zigedy
zoltanzigedy@gmail.com
