Politico reports here on Timothy Geithner’s statement on CNBC that more “dramatic enforcement actions” will be coming against Wall Street in the near future. “You should stay tuned for that,” he says.
In the article, Politico reminds its readers of Bernie Sanders statement from an interview last month. In it, Sanders said regarding the activities of Wall Street in ’08 that “I think there is [sic] some investigations. And I think — you know, hopefully, they will lead to criminal charges, but what I think the average American is saying if a kid smokes marijuana, that kid could end up in jail. These people, because of their activity, destroyed the economy. Millions of people lost their jobs, their homes, their life savings, and now they’re [Wall St. execs] making more than they ever did before.” Let’s take this analogy a bit further and see where it leads.
A kid simply smoking marijuana is not a very good analogy of what’s going on here with Wall Street. A kid smoking marijuana probably has gone behind his or her parents’ backs to get the weed in the first place. Wall Street wasn’t sneaking behind anyone’s back. In fact, it was actually with the government tacit approval, nay, encouragement, that they acted they way they did. The Fed gave Wall Street a green light to do the things it did by making money too easily available. To make the Sanders analogy more appropriately fit the situation, I think it would be more accurate to talk about a minor who was provided with alcohol by his or her parents, drove while drunk and ended up killing innocent people. Both the minor and the parents should be held responsible to the fullest extent possible. Had the parents not provided the minor with the alcohol, it’s likely lives would not have been lost. Had the Fed’s policies not encouraged irresponsibility on Wall Street, perhaps they would have been more responsible. In both cases, then enablers (Fed/Washington bureaucrats and the parents) should be held responsible. Sanders sounds more like the parents in my analogy blaming their own child after being the ones who gave him or her the alcohol in the first place.
As long as politicians can dupe the people into believing that the government has done, can do and will do nothing wrong, the current state of affairs will not change because those truly responsible for the mess we’re in will be able to get away scot-free while their successors will build on the farce they built.