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Graeber has an observation on a different part of this: the penalties are never greater than the profit that triggered the penalties. We're basically telling th

by kqr 4y ago

Graeber has an observation on a different part of this: the penalties are never greater than the profit that triggered the penalties. We're basically telling the bankers that "it's okay as long as the government gets a cut of the loot".

pclmulqdq 4y ago
I'm assuming that's exactly the message the government wants to send. They keep saying it over and over through "administrative actions" and bailouts where the alternative would be arrests and bankruptcies.
mannykannot 4y ago
Getting a cut of the loot is at its most pernicious when it is in the form of campaign contributions and inside information.
dsfyu404ed 4y ago
>it's okay as long as the government gets a cut of the loot". That's how most "bad things" work. Why would asinine banking practices be different?
- kqr 4y ago
  It's not exactly how bad-things taxes work, though. Sure, from a business point of view the nicotine tax is seen as "you're allowed to peddle it as long as the government gets a cut of the loot" but from the consumer perspective, there is actually evidence that it reduces the inclination to make the transaction in the first place. This is not the case with banking penalties which are clearly only a net positive exchange for the banks.
mastax 4y ago
> the penalties are never greater than the profit that triggered the penalties Are you sure? In the most recent case they had to return all $2B taken from customers and pay a $1.7B fine. I'd be willing to look at evidence to the contrary. (Cynicism is not evidence)
- rnk 4y ago
  They already celebrated their earnings in the past, people got bonus or raises or promos on their "performance" using the fruits of their bad behavior. Probably there is different leadership now. The new leadership can use these things to explain any slow quarter, then they try to write off any problems they have now and combine it with this problem (and blame the old person). You see this cycle again and again. Until companies are killed or leadership is fired, and loses their potential for future employment/mayhem, goes to jail - if there is no immediate serious personal repercussions or the company might die, then there won't be much change.
  - mastax 4y ago
    Okay but that sounds more like a principal agent problem as noted in the root comment rather than the "punishment is smaller than the crime" problem I was questioning.

by kqr 4y ago

pclmulqdq 4y ago

I'm assuming that's exactly the message the government wants to send. They keep saying it over and over through "administrative actions" and bailouts where the alternative would be arrests and bankruptcies.

mannykannot 4y ago

Getting a cut of the loot is at its most pernicious when it is in the form of campaign contributions and inside information.

dsfyu404ed 4y ago

>it's okay as long as the government gets a cut of the loot". That's how most "bad things" work. Why would asinine banking practices be different?

kqr 4y ago
It's not exactly how bad-things taxes work, though. Sure, from a business point of view the nicotine tax is seen as "you're allowed to peddle it as long as the government gets a cut of the loot" but from the consumer perspective, there is actually evidence that it reduces the inclination to make the transaction in the first place. This is not the case with banking penalties which are clearly only a net positive exchange for the banks.

mastax 4y ago

> the penalties are never greater than the profit that triggered the penalties Are you sure? In the most recent case they had to return all $2B taken from customers and pay a $1.7B fine. I'd be willing to look at evidence to the contrary. (Cynicism is not evidence)

rnk 4y ago
They already celebrated their earnings in the past, people got bonus or raises or promos on their "performance" using the fruits of their bad behavior. Probably there is different leadership now. The new leadership can use these things to explain any slow quarter, then they try to write off any problems they have now and combine it with this problem (and blame the old person). You see this cycle again and again. Until companies are killed or leadership is fired, and loses their potential for future employment/mayhem, goes to jail - if there is no immediate serious personal repercussions or the company might die, then there won't be much change.
- mastax 4y ago
  Okay but that sounds more like a principal agent problem as noted in the root comment rather than the "punishment is smaller than the crime" problem I was questioning.