Posts Tagged ‘Too Big to Jail’

Eric Holder stepping down as attorney general

September 25, 2014

Attorney General Eric Holder plans to step down as soon as a successor is confirmed.  I think the following is a just summary of his legacy.

Holder’s tenure as Attorney General has been a tragic one. Not only has he been engulfed in partisan scandals over an incompetent gun running sting known as “Fast and Furious,” he has been under fire for attacking the First Amendment rights of the media and is widely seen as having given his friends and former clients on Wall Street a complete pass on the criminal conduct that led to the 2008 financial crisis.

Holder’s involvement with the war on whistle-blowers, tracking and intimidating reporters, killing Americans without judicial review, and the abysmal failure to enforce the law against criminals in the financial services industry has left America a more divided and unjust society.

Not a particularly good legacy to leave behind.

America not only saw a white collar crime wave go unpunished, but saw Holder himself announce a doctrine that has been called Too Big To Jail.  

Holder claimed in congressional testimony that some Wall Street banks could not be prosecuted because of their size, saying “If you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy.”

Holder made no corresponding effort to break up the banks so they could become the appropriate size for him to feel comfortable prosecuting them when they broke the law. 

Instead, the comment signaled to everyone that if you were big and powerful enough the Holder Justice Department was not coming after you in criminal court – which still holds true as there has not been any major prosecutions against the banks or bankers.

As Eric Holder exits the stage America remains worse off from his having been in office.

via FDL News Desk.

People vs. money: the playing field is tilted

June 9, 2014

A labor union is a group of working people working together for a common purpose.   A corporation is a pool of money which has been combined for a common purpose.

In American history, going back to when Thomas Jefferson was Secretary of State and Alexander Hamilton was Secretary of the Treasury in George Washington’s cabinet. there have been two sources of power—people and money.

People power is irresistible when it has been mobilized, but people are prone to be apathetic and short-sighted.   Money power is constant.   It never is bored and never is blind to its own interests.  It is able to tilt the playing field.

Public opinion polls show that a majority of Americans want policies that are the opposite of what millionaires want, yet Washington officials and pundits accept the corporate agenda and treat those who represent public opinion as a lunatic fringe.

minimum_wage_onpageGovernment strictly regulates the internal workings of labor unions to make sure that they are operated honestly and democratically.   No such regulation applies to corporations.

Attorney-General Eric Holder has admitted that the Obama administration has not investigated financial fraud in the biggest banks and Wall Street investment firms because they are too important to the economy.   Imagine someone in the Kennedy administration saying this of Jimmy Hoffa and the Teamsters!

Right now a battle is going on for the rights of low-wage workers who frequently are, among other things, victims of wage theft.  Owners of fast-food restaurants commonly withhold pay for hours worked.  This is illegal.  Progressives are trying to put a stop to it.   Corporate executives are trying to change the laws to make it more difficult to sue.

The big problem for organized workers is that their immediate employer is not always the source of the problem.  Fast-food franchisees operate on extremely narrow profit margins, because of the conditions set by the franchising companies, and (arguably – I don’t really know) may not be able to afford to pay more than they do.  But the battle of the unions is with the franchisees, not with the real decision-maker.

Contract manufacturers in Asia operate under the same conditions.  Their profit margins, as set by their customers in North America and Europe, are so small that (arguably – I don’t really know) they may not be able to pay more than they do.   This is another way that the playing field is tilted against workers and their unions.

Another corporate abuse is the use of private equity to loot corporations at the expense of workers.  The basic idea of private equity is that investors buy out a company’s stockholders and operate it themselves.  In principle, there is nothing wrong with this, if they think they can manage the company better than the previous owners.   Sometimes they succeed in doing this, which is fine.

In practice, private equity investors frequently are looters.  The investors have the company pay themselves or their other companies big fees for management services, consulting services and other fees.  Typically they buy the company with borrowed money, so their own cost is small.  They sell off assets for a quick profit, lay off employees and pocket quick profits while leaving the company a mere shell.   Jimmy Hoffa would never have been allowed to get away with stuff like this.

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