One less bank:
Another one bit the dust last week and I missed it:
Barry Ritholtz examines why ideas that have clearly failed live on. A nugget:
What underlies all of this nonrecourse bad policy? It is much more than corporate lobbying and partisan politics. The worst of today’s political malfeasance is being driven by failed ideologies. Zombie ideas that refuse to die have become enshrined in our collective intellectual legacy. The people behind these have been insulated from the economic costs they impose.
Blame the billionaires.
They are ones who fund the think tanks. These think tanks in turn consider it their jobs to promote the ideology of their benefactors, regardless of its intrinsic value or demonstrable worth.
Follow the link. The whole thing is worth a read.
In Cali, a rich sphincter loses in county court.
Being a rich sphincter, he vows to continue fighting.
A former Southern California man, described as the ringleader of one of the largest foreclosure rescue scams in the nation, was sentenced Wednesday in federal court in Sacramento to 35 years in prison.
Charles Head, 40, currently of Pittsburgh, Pa., was sentenced by U.S. District Judge Kimberly J. Mueller. A hearing to determine the amount of restitution has been set for Nov. 22.
In sentencing, Mueller said that Head had “created and implemented a very cynical scheme” and had “shown an inability to respect the law,” according to a federal Department of Justice news release.
The persons who created the “opportunity” that Mr. Head exploited still walk the boardrooms of Wall Street.
They have their own code of laws.
After pointing out that the root of the word “privilege” is the French for “private law,” Noah Smith bemoans the system of private law for the rich and white that he sees evolving in the United States. He supports his case with many examples. Here’s one (emphasis added):
In 2010, Martin Erzinger, a private-wealth manager for Morgan Stanley Smith Barney, was the driver in a hit-and-run of a bicyclist in Eagle, Colrado. The victim suffered spinal injuries and brain bleeding. But the prosecutor dropped felony charges against Erzinger, giving the following justification:
“Felony convictions have some pretty serious job implications for someone in Mr. Erzinger’s profession, and that entered into it,” [prosecutor] Mark Hurlbert said. “When you’re talking about restitution, you don’t want to take away his ability to pay.
So a rich guy got a lighter sentence because a heavier sentence would prevent him from being rich. Obviously, this get-out-of-jail-free card isn’t available to someone from the middle class, even if he or she is white.
Smith’s mistake is thinking that there is anything new about the rich having private law, though the privilege of the privileged does seem to be increasing. As recently as the Savings and Loan scandal of thirty years ago, banksters went to jail for stiffing their customers; today they get bonuses.
Follow the link for the rest of Smith’s examples.
Corporate America, where punishment is just another deductible expense
As Bank of America prepares for a possible multibillion-dollar settlement with the government, the deal is expected to share a feature common to similar settlements with other banks – a big portion that’s tax-deductible as a business expense.
In similar deals recently struck by the Justice Department with large U.S. banks, portions of the overall settlement amounts were designated as penalties, which banks aren’t allowed to write off.
But by law, banks can write off portions of their settlements that aren’t considered fines or penalties, such as payments to states affected by their alleged misconduct.
That means billions of dollars in Bank of America’s expected settlement could be tax-deductible.
President Obama’s recent action to prevent federal contractors from forbidding employees to discuss their compensation leads Michael Carroll down a memory hole:
He had a point. I did talk to my co-workers about my salary, and it was so low that I did not have all that much respect for it. Al was coming from a different place. He did not want discussion because dissension might flow from comparing paychecks. Employees might learn that there were often big differences in salaries of people doing the same job with the same skills and experience. Discussion might reveal disparities based less on performance and more on race, gender, who was sleeping with the boss and other things best left unspoken. This might generate more discussion and even less respect for our salaries.
More memories at the link.
There is one thing corporations have in common with the rest of us. They don’t like to pay taxes. Fortunately, they rarely have to.
Video below the fold in case it autoplays.