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It think it's easier to prosecute people who rip off individuals, as Bernie did, rather than ripping off the general public. It's easy for people to see harm in

It think it's easier to prosecute people who rip off individuals, as Bernie did, rather than ripping off the general public. It's easy for people to see harm in the faces of the harmed (be they rich or poor) rather than failing to follow a complex law with an even more complex scheme. The harm to the public may be terrible but if you can't easily explain things to lay people, you might have difficulty over many months of tedious testimony getting them to care.

dnautics 11y ago
I think the real problem is that these miscreants are only able to rip off the public because government policy pushes the general public into a position where they are exposed to the risk of dealing with fraudsters. For example, decades of policy encouraging unsustainable home ownership in the leadup to the housing crisis. More generally, a policy of monetary devaluation that nudges individuals and retirement accounts, etc. Into risky investments (instead of stashing under the mattress). Fictional regulatory reporting requirements that make it easier to create the veneer of propiety than actually exercise it, etc. So there is a problem that ultimately the government can't look too hard into these problems without making it glaringly obvious that the reason why the public is exposed to harm that would normally be against individuals is it's own fault.
mason240 11y ago
That's pretty similar to what my response was going to be. - a white collar crime probably doesn't have direct victim A victim of robbery will initiate the police to act. A violated regulation can't do the same.
- TheOtherHobbes 11y ago
  White collar crime has plenty of indirect victims. Fixing LIBOR had very real life-changing consequences for many people. They weren't as direct as a knife attack, but they still made a huge difference to the financial - sometimes also the personal - opportunities available to many people. The difference is that most of those people would have had no idea they were being robbed. They would simply have had less money to spend - but they wouldn't have been aware why. In a fair world there would be immediate compensation for all victims in the form of basic recompense plus punitive damages. IMO that would be more effective in stopping white collar crime than the prospect of jail, because it would change the risk/reward profile and skew it more towards financial damage and loss of customer good will.
  - lmm 11y ago
    FWIW most "people in the street" got a net benefit from the LIBOR manipulation. The people on the losing side were mostly large traders - i.e. sovereign wealth funds and wealthy individuals (though admittedly also some mutual funds and similar organizations that ordinary folks invest with e.g. CALPERS).

dnautics 11y ago

I think the real problem is that these miscreants are only able to rip off the public because government policy pushes the general public into a position where they are exposed to the risk of dealing with fraudsters. For example, decades of policy encouraging unsustainable home ownership in the leadup to the housing crisis. More generally, a policy of monetary devaluation that nudges individuals and retirement accounts, etc. Into risky investments (instead of stashing under the mattress). Fictional regulatory reporting requirements that make it easier to create the veneer of propiety than actually exercise it, etc. So there is a problem that ultimately the government can't look too hard into these problems without making it glaringly obvious that the reason why the public is exposed to harm that would normally be against individuals is it's own fault.

mason240 11y ago

That's pretty similar to what my response was going to be. - a white collar crime probably doesn't have direct victim A victim of robbery will initiate the police to act. A violated regulation can't do the same.

TheOtherHobbes 11y ago
White collar crime has plenty of indirect victims. Fixing LIBOR had very real life-changing consequences for many people. They weren't as direct as a knife attack, but they still made a huge difference to the financial - sometimes also the personal - opportunities available to many people. The difference is that most of those people would have had no idea they were being robbed. They would simply have had less money to spend - but they wouldn't have been aware why. In a fair world there would be immediate compensation for all victims in the form of basic recompense plus punitive damages. IMO that would be more effective in stopping white collar crime than the prospect of jail, because it would change the risk/reward profile and skew it more towards financial damage and loss of customer good will.
- lmm 11y ago
  FWIW most "people in the street" got a net benefit from the LIBOR manipulation. The people on the losing side were mostly large traders - i.e. sovereign wealth funds and wealthy individuals (though admittedly also some mutual funds and similar organizations that ordinary folks invest with e.g. CALPERS).