Tuesday, November 29, 2011

Quote of the Week

For this week's Quote of the Week, I was incredibly tempted to give the honors to Judge Jed Rakoff, who refused to accept a settlement in a mortgage-related case against Citigroup ("prosecuted" by the SEC), on the basis that the merits of the case were not sufficiently understood to grant Citi immunity from future prosecution. In doing so, Judge Rakoff sternly rebuked the long-standing practice of fining banks for fraud rather than forcing them to face real prosecution, casting doubt on whether the banks will be able to continue escaping criminal liability for their actions.

Judge Rakoff's decision has faced a significant amount of scrutiny from people who think that the SEC "can't afford" to prosecute cases like these, because the cases are too expensive and the banks have such amazing legal resources. For exactly these reasons, it has long been my contention that the SEC cannot afford not to prosecute these cases.

For too long, the Feds have fallen into the settlement trap, allowing banks to simply incorporate these occasional (relatively small) fines into their business models as a standard cost of business. As a result, banks have promulgated various types of fraud for decades now, and this will continue unabated until the courts take notice and say "no more". This ruling could potentially be an important first step, and it's a dynamic that Matt Taibbi explores in more detail (and with great insight) in this video.

And yet, despite the potential importance of this ruling, it won't be my Quote of the Week this week. That's because earlier today, I came across an article that made me gasp, and not in a good way. In a broader article on food safety and the corners that many food manufacturers cut in order to sneak unsafe food into grocery stores and cafeterias, I came across this gem of a paragraph that almost makes me want to avoid all food that I didn't personally grow for myself. 


"The FDA allows up to 60 insect fragments per 100 grams of chocolate before the food is thrown out. Same goes for corn, which the agency deems suitable for consumption if it contains only one larvae that is larger than 3 millimetres. Pineapple doesn't get thrown out until it overtakes a 20 percent mold count."
                                - Daily Mail

Yuck. I've written (ranted) about the FDA here before, arguing that they typically seem to have the best interests of the food companies--rather than the consumer--in mind. I'll admit that I don't know everything there is to know about food production and/or food safety, but I can't imagine that any food company in the country actually considers these guidelines to be particularly stringent or difficult to meet. I'll just have to grow my own corn from now on, I guess...

[Daily Mail]

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