If you've been reading me long, you'll know how I feel about the big banks, and you'll also know that I think the banks have been the recipient of many more government-sponsored bailouts than we could possibly imagine--TARP was just the tip of the iceberg.
Bloomberg (and, more hilariously, Jon Stewart) broke the news of one of these backdoor bailouts last week, in the form of trillions of dollars in secret loans from the Fed, many of which were then lent back to the Federal government for a profit (borrowing from the Fed, lending to the government, and taking a profit on the difference--uh yeah, that's a bailout).
But I've always been more interested in the non-financial type of bailouts--namely, the crimes that banks are allowed to perpetrate without facing anything more than a fine when the crimes are discovered. That they can internalize these fines as a cost of business only ensures that for banks, crime does indeed pay. For evidence of this dynamic, look no further than this New York Times infographic (brought to my attention by Barry Ritholtz), detailing the so-called "Wall Street Recidivists".
You'll notice that my favorite company Bank of America shows up on there multiple times, as does Merrill Lynch, which is now wholly owned by BofA. I'm absolutely shocked.
It's clear that this world needs more Eric Schneidermans and Jed Rakoffs, and fewer bankster criminals. The prevailing attitude in Washington seems to be that if we prosecute the banks fully, it will "upset the markets", or that the banks will scale back lending and devastate the economy. That line of reasoning is insulting to our intelligence. If we allow different people to have different treatment under the law, the whole nation suffers immensely. Equality under the law is the only thing keeping our democracy (and, frankly, our economy) intact. It must be preserved at all costs.
The banks have been lying, cheating, and stealing for over a decade, and it's about damn time we put a stop to it. Fines aren't enough--they're just a thinly veiled bailout. We need handcuffs and bank closures, and if the markets suffer in the time being, so be it. Anyone actually feel like stepping up and doing it?
(h/t Barry Ritholtz)