Standing Between Them And The Pitchforks

Must read of the morning, by Peter J Boyer and Peter Schweitzer at Newsbeast:

Despite his populist posturing, the president has failed to pin a single top finance exec on criminal charges since the economic collapse. Are the banks too big to jail—or is Washington’s revolving door at to blame? Peter J. Boyer and Peter Schweizer investigate:

Obama’s 2009 White House summit with finance titans, in which the president warned that only he was standing “between you and the pitchforks”

Why, despite widespread outrage, financial-fraud prosecutions by the Department of Justice are at 20-year lows

Attorney General Eric Holder’s lucrative ties to a top-tier law firm whose marquee clients include some of finance’s worst offenders

How Obama’s trumpeted “task force” for investigating risky mortgage lenders—announced in this year’s State of the Union speech—is badly understaffed and has yet to produce any discernible progress

.

An excerpt:

Two months into his presidency, Obama summoned the titans of finance to the White House, where he told them, “My administration is the only thing between you and the pitchforks.”

The bankers may have found the president’s tone unsettling. Candidate Obama had been their guy, accepting vast amounts of Wall Street campaign money for his victories over Hillary Clinton and John McCain (Goldman Sachs executives ponied up $1 million, more than any other private source of funding in 2008). Obama far outraised his Republican rival, John McCain, on Wall Street–around $16 million to $9 million. As it turned out, Obama apparently actually meant what he said at that White House meeting–his administration effectively would stand between Big Finance and anything like a severe accounting. To the dismay of many of Obama’s supporters, nearly four years after the disaster, there has not been a single criminal charge filed by the federal government against any top executive of the elite financial institutions.

Strikingly, federal prosecutions overall have risen sharply under Obama, increasing dramatically in such areas as civil rights and health-care fraud. But according to the Transactional Records Access Clearinghouse, a data-gathering organization at Syracuse University, financial-fraud prosecutions by the Department of Justice are at 20-year lows. They’re down 39 percent since 2003, when fraud at Enron and WorldCom led to a series of prosecutions, and are just one third of what they were during the Clinton administration. (The Justice Department says the numbers would be higher if new categories of crime were counted.)

None of the information is something you probably don’t already know. But it’s unusual for a mainstream news magazine to report anything like this without all the usual caveats about how important it is to coddle all these Master of the Universe or they’d take their balls and go home.

The only problem is the finish, where they hold out hope that because Wall Street is allegedly abandoning the President in this campaign, he will bring the hammer down in the second term. But if one of the problem is the revolving door, as it says in the article, then it’s hard to see why that would make a difference.

Comments