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OWS: Don't Equate Bad Results with Criminal Intent

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October 20, 2011 – Comments (3)

Board: Berkshire Hathaway

Author: EliasFardo

If you don't want to watch the video; here is what Grayson said:

Now let me tell you about what they’re talking about. They’re complaining that Wall Street wrecked the economy three years ago and nobody’s held responsible for that. Not a single person’s been indicted or convicted for destroying twenty percent of our national net worth accumulated over two centuries.

I think that Grayson colored in what he thought/wanted the Occupy Wall Street crowd to be about; if you listen directly to them their complaints are not so succinct.

Now here is my complaint. I don’t know why people keep saying that nobody has been held responsible. It seems to me that many people have been held accountable. Jobs have been lost and careers have been ruined. Plus, many investors have lost large amounts of money invested in Wall Street banks. Those people were held financially responsible for investing in the Wall Street bums. Sure, some made out like bandits and others were badly hurt. Some of those hurt were innocents and some of the bandits kept their loot. But it has always been thus. No one ever claimed that our system was perfectly fair.

Let us look at some of the innocents. Having been an accountant in a former lifetime, and having used the services of Arthur Anderson, I remember them being ruined. They were not ruined for any criminal act, but ruined for being charged with a criminal act. The Supreme Court threw out their criminal conviction; but the damage was done. Tens of thousands of Arthur Anderson employees lost their jobs, and the partners lost their investment and firm. So, we lost one of the few large public accounting firms, bringing the new total down to four. When we argue for the benefits of competition in every other economic activity, how does society benefit from taking down one of the few large accounting firms? The tens of thousands of Arthur employees eventually suffered not so much by what the firm did, but that it got caught in the crosshairs of scapegoat hunting for Enron. I guess we would all collectively feel better to ruin even more people in our desire to demonstrate our new found financial integrity.

I will even defend *gasp* AIG. Sure, they were reckless as all get out. I won’t defend that. But the charges against them have proven rather slippery when they are removed from the hands of Client Number Nine and into those of more responsible actors. The question that can never be answered is “how much of the damage done by AIG resulted from the damages done to AIG by the state?” Should we bring back Client Number Nine to continue the witch hunt?

I don’t know how people know that crimes have been committed. I don’t know if crimes were committed or not; how do they? Terrible economic decisions were made. But, if bad economic decisions were criminal we would not be able to build enough prisons. The presence of a financial meltdown in itself is not evidence of crime. Do we want to do another Arthur Anderson? Select a firm or two, charge it and everyone involved with criminal charges just to quench our bloodlust? If the destruction of Arthur Anderson made us feel good, just think of the pleasure we would experience in bringing down Goldman and Bank of America. And lest anyone misunderstand, I am as opposed to innocent people being convicted for violent crimes just as much as for financial type crimes. I find any actions designed to just close the case and satisfy the public as being reprehensible.

If crimes were committed, by all means prosecute. As an investor, removing criminal activity from the financial system is to my benefit and I am all for it. But, I don’t immediately equate bad results with criminal intent. Now, I know that nobody is recommending convicting the innocent. But, if you keep publicly pounding out “Someone must go to jail, someone must go to jail, someone must go to jail,” what do you think is going to happen?

They’re upset about the fact that Wall Street has iron control over the economic policies of this country, and that one party is a wholly owned subsidiary of Wall Street, and the other party caters to them as well.”..

Yes, but which party is which? Wall Street gave more campaign contributions to the Democrats than to the other Wall Street catering party. And this whole assertion that Wall Street has iron control over the economic policies of this country is specious. Reasonable minds can understand that this is not true. What solid evidence is there that Wall Street can dictate public policy? I remember several large pieces of legislation in just the last ten years aimed directly at Wall Street. If they have such power, how did these acts get passed?. Why didn’t their wholly owned subsidiary and their catering party stop them instead of passing them?

Wall Street wishes that it had the power that people attribute to it. If they really had the economic policies of the country resting in their greedy little hands their wealth would be much greater. Think what you could do for yourself with such power! If it was true, they are horribly incompetent at pressing their advantages. Pikers! Pikers all!

3 Comments – Post Your Own

#1) On October 20, 2011 at 12:59 PM, Mega (99.96) wrote:

"I don’t know if crimes were committed or not; how do they?"

Do you think Lehman executives fully disclosed their actual financial condition in 2008, including Repo 105 transactions which were OBVIOUSLY material? In my opinion, that's a pretty clear-cut example of fraud.

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#2) On October 20, 2011 at 1:15 PM, Mega (99.96) wrote:

The question that can never be answered is “how much of the damage done by AIG resulted from the damages done to AIG by the state?”

This question is bizarre.  Spitzer caused a few million dollars in legal costs, AIG-FP destroyed tens of billions.  Most people understand that AIG would have gone bankrupt if the government had not given them massive low-cost loans and recapitalized them. 

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#3) On October 20, 2011 at 1:20 PM, devoish (98.38) wrote:

I admire that you are thinking for yourself and not just repeating someone elses thoughts. I think you are stirring victims in with criminals among those who lost "investments" and letting those who collected nickels and dimes pay the price for those who collectd billions. 

If any of the people who bundled and sold the bad loans are living in tent citys in Florida, let me know, because some of their victims are. If Hank Paulson is sleeping under Goethels Bridge let me know. If Angelo Mozillo is with him, tell me. When I think of the criminals, at the bottom I think of the loan officers who stole from the investors by falsifying lending documents and encouraged borrowers to falsify them, I also include the borrowers, but not if they didn't lie and are now sitting under water watching a well hidden clause in their mortgage documents raise their monthly mortgage payment because the value of their house fell. I think of the loan officers management who motivated those loan officers by paying them a fee for each loan, not a percentage of each monthly mortgage payment over thirty years. At the top of the criminal chain I blame the executives who structured those paychecks for management and took their cuts of the fees and another fee for knowingly selling bad loans to investors. I blame Bush administration officials for standing up small government advocacy in the way of State AG's who were screaming to prosecute corrupt lenders. I blame investment banks for letting investors think that Fannie and Freddie securitys were backed by the Federal gov't when they had not been since 1970's. I blame small Government advocates of deregulation. I blame the SEC for allowing the freedom to manufacture money of lowering investment bank leverage requirements and the investment bankers who asked for it. I blame the non-interference policys of the SEC for not setting some level of asset holding requirements for AIG to back their guarantees with. And I blame Congress for bailing out AIG and the banks, and correcting nothing, including Senator Obama. And now we don't tax them to pay ourselves back?

A lot of fingers and toes have been bruised and broken, but no heads have rolled under the Goethels bridge with their victims.

Anyway, thats how I see it.

Best wishes

Steven

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