“Somebody is caught for a minor drug offense, they are sent to prison for a very long time. And yet, these so-called white-collar crimes, which are not victimless, almost none of these guys, almost none of them, go to prison” said Nobel-prize winner Joe Stiglitz. He was recently interviewed for AOL’s Daily Finance. In addition he states, “I think we ought to go do what we did” in the wake of similar financial crises in the past, and “actually put many of these guys in prison.”
This view is not just coming from someone sitting in a barbershop. Joseph Stiglitz is University Professor at Columbia University and Chair, Columbia University Committee on Global Thought. He teaches classes at the Columbia Business School and the School of International and Public Affairs. In 2001 he was awarded the Nobel Prize in Economics and served as Chief Economist of the World Bank from 1997-2000.
According to University of Missouri scholar (and veteran regulator) William Black, there was widespread fraud “at every step in the home finance food chain.” As Black and economist L. Randall Wray recently wrote:
The appraisers were paid to overvalue real estate; mortgage brokers were paid to induce borrowers to accept loan terms they could not possibly afford; loan applications overstated the borrowers’ incomes; speculators lied when they claimed that six different homes were their principal dwelling; mortgage securitizers made false [representations] and warranties about the quality of the packaged loans; credit ratings agencies were overpaid to overrate the securities sold on to investors; and investment banks stuffed collateralized debt obligations with toxic securities that were handpicked by hedge fund managers to ensure they would self destruct.
As we come into the end of 2010 – where is your bailout? Citigroup, which received $45 billion in TARP funds in addition to having another $300 billion in bad paper taken off its books by the Federal Deposit Insurance Corporation. But that was only the latest round; last year, the New York Times noted that over the past 80 years, “the United States government has engineered not one, not two, not three, but at least four rescues of the institution now known as Citigroup.”
In the meantime average Americans are trying to figure out how to make ends meet, develop a business idea, or find real marketing solutions to get noticed and increase our revenue. Where’s your bailout? That’s a question that remains unanswered.
What say you?