DISCLAIMER: I have no idea what Rubin stands for or looks like. I couldn’t pick him out of a police lineup, and I know almost nothing about banking. Probably the things I think I do know about banking are wrong.
But I use Rubin as an example (Paulson will do equally well) of a banking bigshot who profited grossly by the now-acknowledged totally screwed-up system of lending money to people who couldn’t afford to pay it back–by “Rubin” I mean pretty much anyone who earned bonuses during the years the banking industry seemed profitable, but was actually flushing our economy down the shit-chute. It seems to me that, from a perspective of bare-bones fairness, that such people committed some sort of fraud. If they were sanctioning taking risky bets (as they have clearly demonstrated they have, by the current economy) but instead of investing its profits against the day that these risks might manifest themselves, the banking industry disbursed their profits to individuals, like Rubin and Paulson and maybe 10,000 other investment bankers, who bought property and airplanes and wine-cellars and all sorts of personal shit with the money.
I’m not complaining (I don’t think I am) about an individual’s right to accept a high salary from a private company, but rather about an industry that pays high salaries and also disburses its safeguards to individuals during “boom” times, without a thought to needing that money when the boom times are over. That, it seems to me, borders on criminal negligence, especially since we’re now acknowledging that the country cannot allow these banks to fail. IOW, they weren’t merely raiding their own private companies’ coffers, which would be bad enough, they were also endangering the national economy.
If Obama can’t find a way to fix the economy these guys wrecked that will also serve as an object lesson to future bankers not to try this ever again–and by that I certainly mean collecting huge sums in damages from the bankers personally, and ideally long jail terms to boot (even if the money’s collected are a drop in the bucket, which they probably are)–I would suppose that his credibility will be damaged. The whole tenor of his campaign was that of change and fairness, and I don’t see making economic heroes of these fools or thieves or (most likely) financial criminals representing either element.
Sure, in order to make an economy work, he’ll have to keep some of these guys on board, but I see it as a necessary evil in very small numbers, akin to letting one crook pleabargain his way out of a life sentence that will go to his twenty-five confederates. Aren’t there loads of bright young MBAs who haven’t yet profited by this looting who could be promoted to serve under the few honest investment bankers (and a few selected criminals willing to help Obama prosecute their fellows) in creating a whole new economy, with the example of these crooks suffering, if not in jail then at least in disgrace with a vastly diminished wealth?
Purely symbolically, I’d think that would be a desirable way to go, and sends a powerful message to future greedmongers. Certainly, I hear that message at my job every time I ask for a raise: No, you can’t have a raise just now because the institution you work for needs the money in order to insure that it survives and thrives, so we need to invest in infrastructure and other assets that represent the institution’s future financial strength. The other message, that their institution’s bulging coffers represents individual profits way beyond their salaries instead of going back into the institution’s own holdings, is at the root of this wrecked economy, it seems to me, because it encouraged them to pursue foolish mortgage-policies that brought in short-term profits, and the only way to get the message across that the principle of looting a thriving company is wrong must start with the prosecution of those who caused this crisis to happen.
If there’s any point to this rant, it may be: Why can’t the bankers be prosecuted for fraud? They either could foresee the results, in which case it’s clearly fraud, or they couldn’t, in which case it’s negligence leading to fraud. The spectacle of billionaires and millionaires overseeing the economy they personally ruined, while getting to keep their ill-gotten riches, really toasts my shorts, as you can see.