4 ms·

This related hearing [1] led by freshman senator Elizabeth Warren is eye-opening. She can't get a straight answer on the last time a major bank was taken to tri

This related hearing [1] led by freshman senator Elizabeth Warren is eye-opening. She can't get a straight answer on the last time a major bank was taken to trial over its offenses. [1] http://www.dailykos.com/story/2013/02/15/1187417/-Elizabeth-Warren-to-bank-regulators-When-was-the-last-time-you-brought-Wall-Street-banks-to-trial http://www.dailykos.com/story/2013/02/15/1187417/-Elizabeth-...

peterjmag 14y ago
Can anyone here answer Warren's question, even if the regulators couldn't? I'd be interested to learn about any court trials prosecuting larger banks (that is, if any exist), but it's proving difficult to Google.
- kami8845 14y ago
  The fact that the people in that room couldn't (who certainly know of any single time a wall street bank has gone to trial in the past years) and that Warren is so sure of her position is enough evidence for me personally
hugi 14y ago
Wow.
meomix 14y ago
It's really a shame more senators can't be as tenacious as Ms Warren. What is the cause of this? Is it because so many are 'bought off?'
- pyre 14y ago
  Not necessarily 'bought off' as in handing over cash for favor, but a lot of politicians are already part of 'the machine' and profit handsomely from it, so their personal goals line up.
  - chetanahuja 14y ago
    And that's the reason term limits are needed for each and every political office. Of course nothing on the order of a constitutional amendment is even remotely possible in the current US political system (that's likely to persist for a long long time to come).
    - eropple 14y ago
      I don't think term limits fix what you're asserting. If anything, they just codify when people get out of office and go into particularly posh jobs with the people who were lobbying them.
    - hackinthebochs 14y ago
      Term limits are not the solution! In fact it will just exacerbate the problem. If Congress ends up as perpetual freshmen, who do you think will end up with an even higher proportion of power in Washington? The lobbyists and the staffers. These people have the insider knowledge, the connections, and the influence and they will be able to steamroll over an endless parade of newbie lawmakers. As someone said higher up, the reason nothing is ever done is because the congressmen's incentives align with the banks and the power brokers. The only solution is to ensure that those with voting power in Washington have incentives that are the opposite of the banks. Term limits do not do this. Possible solutions: Pay Congress and important oversight positions a salary proportional to their importance--somewhere in the multiple millions per year. Make lobbying any government official illegal (anything beyond writing a letter to your Congressmen). A lifetime ban from working for any company that is affected by decisions made while in office. 100% publicly financed campaigns.
- fnordfnordfnord 14y ago
  Bought off, some maybe, for those that won't be bought, they'll either play along, or face fierce opposition within their own party, lose financial support and hence, have a slim chance to be reelected. Consider some of the things Ted Kaufman said in the recent PBS special about this exact issue. http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/untouchables/ted-kaufman-wall-street-prosecutions-never-made-a-priority/ http://www.pbs.org/wgbh/pages/frontline/business-economy-fin...
- rayiner 14y ago
  People on HN have a warped view of how leverage works in American politics. The prevailing meme of congresspeople who are bought off has a lot of appeal, but its far from the facts. My wife was a lobbyist so I have a bit of insight into the situation. Fact is, the usual suspects don't need to bribe congressmen. Who needs bribes when you have beliefs? You just need something like the heritage foundation or AEI to say that suing banks or regulating them will cost jobs and boom: you can count on tons of votes from people whose ideological interests are aligned with those of the banks. Corruption in the US looks different than in say China. Its puritan corruption. Convincing true believers that what's good for big corporations is good for everyone and for the all important jobs. Everything starts from there.
tptacek 14y ago
She does get a straight answer. Regulators don't sue; they have a steady-state relationship with the banks where their concerns are addressed with consent decrees. Lawsuits are insanely expensive in the best of cases, but they're worse when you're suing a megabank, because the suit impacts the broader economy. It is a little disingenuous for Warren to act surprised about this. She knows not only why regulators don't sue, but also how unlikely it is that we're going to start doing that (it'd be economically irrational for us to do so). Her heart is in the right place. Too Big To Fail is a real problem. But if you've got a bunch of wasp nests in your back yard, you don't fix the problem by jamming sharp sticks into them.
- Cushman 14y ago
  That's a little uncharitable. It's obvious that Senator Warren's real question is: Do the banks have any reason to feel as if they face a threat of real legal action if they break the rules? If not, that's surely something we can and should change.
  - chetanahuja 14y ago
    s/break the rules/break the laws/ Completely different meaning. If ate a bar of chocolate in the library despite posted signs against eating and drinking. I broke a rule. If I threw my chocolate bar at the librarian's face with an intent to injure him, I broke a law (assault and injury etc.)
    - Cushman 14y ago
      And if there wasn't anything you could do to land yourself in court, wouldn't you start to wonder if there are any real laws at all?
      - chetanahuja 14y ago
        Oh there's no doubt that laws were and are being broken by top banks every single day. The problem is that they have enough concentration of power on their side (in most western countries) that it's almost impossible for the feeble democratic institutions to effectively punish them.

peterjmag 14y ago

Can anyone here answer Warren's question, even if the regulators couldn't? I'd be interested to learn about any court trials prosecuting larger banks (that is, if any exist), but it's proving difficult to Google.

kami8845 14y ago
The fact that the people in that room couldn't (who certainly know of any single time a wall street bank has gone to trial in the past years) and that Warren is so sure of her position is enough evidence for me personally

hugi 14y ago

Wow.

meomix 14y ago

It's really a shame more senators can't be as tenacious as Ms Warren. What is the cause of this? Is it because so many are 'bought off?'

pyre 14y ago
Not necessarily 'bought off' as in handing over cash for favor, but a lot of politicians are already part of 'the machine' and profit handsomely from it, so their personal goals line up.
- chetanahuja 14y ago
  And that's the reason term limits are needed for each and every political office. Of course nothing on the order of a constitutional amendment is even remotely possible in the current US political system (that's likely to persist for a long long time to come).
  - eropple 14y ago
    I don't think term limits fix what you're asserting. If anything, they just codify when people get out of office and go into particularly posh jobs with the people who were lobbying them.
  - hackinthebochs 14y ago
    Term limits are not the solution! In fact it will just exacerbate the problem. If Congress ends up as perpetual freshmen, who do you think will end up with an even higher proportion of power in Washington? The lobbyists and the staffers. These people have the insider knowledge, the connections, and the influence and they will be able to steamroll over an endless parade of newbie lawmakers. As someone said higher up, the reason nothing is ever done is because the congressmen's incentives align with the banks and the power brokers. The only solution is to ensure that those with voting power in Washington have incentives that are the opposite of the banks. Term limits do not do this. Possible solutions: Pay Congress and important oversight positions a salary proportional to their importance--somewhere in the multiple millions per year. Make lobbying any government official illegal (anything beyond writing a letter to your Congressmen). A lifetime ban from working for any company that is affected by decisions made while in office. 100% publicly financed campaigns.
fnordfnordfnord 14y ago
Bought off, some maybe, for those that won't be bought, they'll either play along, or face fierce opposition within their own party, lose financial support and hence, have a slim chance to be reelected. Consider some of the things Ted Kaufman said in the recent PBS special about this exact issue. http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/untouchables/ted-kaufman-wall-street-prosecutions-never-made-a-priority/ http://www.pbs.org/wgbh/pages/frontline/business-economy-fin...
rayiner 14y ago
People on HN have a warped view of how leverage works in American politics. The prevailing meme of congresspeople who are bought off has a lot of appeal, but its far from the facts. My wife was a lobbyist so I have a bit of insight into the situation. Fact is, the usual suspects don't need to bribe congressmen. Who needs bribes when you have beliefs? You just need something like the heritage foundation or AEI to say that suing banks or regulating them will cost jobs and boom: you can count on tons of votes from people whose ideological interests are aligned with those of the banks. Corruption in the US looks different than in say China. Its puritan corruption. Convincing true believers that what's good for big corporations is good for everyone and for the all important jobs. Everything starts from there.

tptacek 14y ago

She does get a straight answer. Regulators don't sue; they have a steady-state relationship with the banks where their concerns are addressed with consent decrees. Lawsuits are insanely expensive in the best of cases, but they're worse when you're suing a megabank, because the suit impacts the broader economy. It is a little disingenuous for Warren to act surprised about this. She knows not only why regulators don't sue, but also how unlikely it is that we're going to start doing that (it'd be economically irrational for us to do so). Her heart is in the right place. Too Big To Fail is a real problem. But if you've got a bunch of wasp nests in your back yard, you don't fix the problem by jamming sharp sticks into them.

Cushman 14y ago
That's a little uncharitable. It's obvious that Senator Warren's real question is: Do the banks have any reason to feel as if they face a threat of real legal action if they break the rules? If not, that's surely something we can and should change.
- chetanahuja 14y ago
  s/break the rules/break the laws/ Completely different meaning. If ate a bar of chocolate in the library despite posted signs against eating and drinking. I broke a rule. If I threw my chocolate bar at the librarian's face with an intent to injure him, I broke a law (assault and injury etc.)
  - Cushman 14y ago
    And if there wasn't anything you could do to land yourself in court, wouldn't you start to wonder if there are any real laws at all?
    - chetanahuja 14y ago
      Oh there's no doubt that laws were and are being broken by top banks every single day. The problem is that they have enough concentration of power on their side (in most western countries) that it's almost impossible for the feeble democratic institutions to effectively punish them.