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Why Didn't the Banks and Bank Execs Get Punished?

William D. Cohan offers some advice in an Op-Ed piece he penned for the New York Times: Stay angry at the banks and their executives for their responsibility in the financial crisis.

 

The bank executives—who incidentally received and doled out $150 billion in bonuses for their role in creating the greatest economic downturn since the depression—are of course whining that the now is the time to stop complaining about the poor banks and the poor bank executives. In a way, the bank executives are right; despite the constant protests of the American people, the whining about the banks hasn’t been heard.

 

That doesn’t mean that the constant whining and complaining about truthful injustices will remain unheard, but it might.

 

The Senate’s report about the housing bubble and the mortgage crisis, which I wrote about HERE, is specific about the behind-the-scenes details leading up to the financial crisis and includes the names of the individuals who were largely to blame for the financial crisis. Of course, this didn’t mean that any of them were prosecuted. As William D. Cohan writes in his Op-Ed, many of those responsible for what he terms the Great Recession got away with it:  

“Other potential culprits — Angelo Mozilo, chief executive of Countrywide Financial, Joseph Cassano, chief executive of AIG Financial Products, and Dick Fuld, the chief executive of Lehman Brothers — were either slapped with a small civil penalty, in the case of Mozilo, or the Justice Department made the decision not to prosecute after months of investigation.”

 

Why were the white collar criminals allowed to get away with conning the American populace at large? As the Huffington Post observes, of the 2,000 individual prosecutions for mortgage fraud in the last two years, none of the prosecutions are actually targeting any of the fraudulent executives who were responsible for much of the reprehensible behavior to begin with.

 

Does this even make any sense? A bi-partisan Senate investigation determined which parties were guilty for the recession and economic downturn; yet, nothing was done. It’s yet another case in which many of the victims of the crimes were considered the actual criminals by the long arm of the law.

 

And while justice may be unattainable in many cases, if the American public remains silent about what happened in the case of the bankers, it gives the banks leeway to do the same thing again. If congress knows how greatly important banking regulations are to the American public, there is a much greater likelihood that regulatory laws will get passed.

 

Of course, that doesn’t mean any of them will be enforced.