11 ms·

“Cheating teachers go to jail. Cheating Wall Streeters don’t. What’s up?”

307 points by grej 12y ago

rayiner 12y ago
Because it's easy to understand why cheating on tests is wrong, and easy to explain to a jury what people did that was wrong. Try to explain LIBOR manipulation to a jury and explain why it's wrong.
- mjgoins 12y ago
  Bull fucking shit.
  - deleted 12y ago
    [deleted]
  - jodah 12y ago
    If you read the rationale for why prosecutors don't even bother going after a lot of the banking fraud, it's often because of the complexity. This is obviously more about prosecutors lacking guts (and political will) than it is any shortcoming of jurors, but complexity is a problem.
- wavefunction 12y ago
  I am pretty sure I could do that. The more accurate answer is that rich and connected people are rarely held to account for their heinous crimes against the rest of us.
- robot22 12y ago
  I would agree with you if there were a history of difficulties prosecuting white collar crime.
- claytonjy 12y ago
  I wanted to say "but that's why they get a jury of their peers, people that know what means!" but then I remembered not only would that not happen, but even if it did, those same peers would likely have a tribe mentality and seek to protect their own.
- wppick 12y ago
  Teachers have much less money to spend on lawyers. If you steal/scam/cheat billions of dollars you can then afford a great team of lawyers
  - happyscrappy 12y ago
    Well that would usually be the teachers unions but they are not going to go on a suicide mission to defend these teachers.
- grej 12y ago
  In order to explain that to a jury, you have to actually charge someone with a crime.
- 2close4comfort 12y ago
  Plus if you give enough money to the right people you never even get indicted so there you dont have to get involved with juries and mess stuff like that.
- kaa2102 12y ago
  A regulator or prosecutor needs to first be willing to charge a bank or Wall Street executive before anything can get to a jury.
  - deleted 12y ago
    [deleted]
- Zigurd 12y ago
  Tax dodges, like straddles, are hard to explain, yet they get prosecuted.
  - rayiner 12y ago
    In a tax case, the legality of the conduct can be proven almost entirely on the papers. Everything relevant to the prosecution is in a formal financial document somewhere. In a financial fraud case, the evidentiary problem is much harder. The difference between a legal transaction and an illegal one is often what was in the person's head, not just things you can deduce from a paper record. Sometimes you have emails or the like to fill in the blanks, but often you don't.
    - anigbrowl 12y ago
      Not to mention that the volume of discovery materials is so huge that it costs a fortune in both hourly wages and time to comb through it, and lack of resources has often been a problem at the DoJ; plus, with such a huge volume of evidence to sift through, the procedural arguments over what is admissible and so on and can be strung out for years on end. I think a lot of commenters here don't appreciate that prosecuting a large bank involves sifting through literally tens of millions of documents looking for patterns of intentionality, which as you say is very hard to prove, and where the subjects of the investigations in question know it's hard to prove. Nobody gets anywhere in the financial industry without a very good knowledge of securities law, whereas it's highly unlikely the teachers in Atlanta didn't cover up their malfeasance very effectively and their defense could almost be summed up as 'what's the big deal?'. That said, I think the lack of prosecutions was partly political. If the administration had gone nuclear on Wall Street as soon as it came into office (which was when anti-financial sentiment was at its peak) then it would have laid waste to the US financial industry and could have caused a far worse financial and economic collapse than the one we experience. It's no good pointing to things like the S&L crisis as many people do; that was a different, and much stricter regulatory environment. The reason (IMHO) that the financial crisis was so severe was that we deregulated the financial industry heavily in the late 1990s, and so a great many of the systemically risky activities that eventually proved unsustainable were not illegal. It was assumed when Glass-Steagall was dismantled that the market would flush out excessively risky players because too much risk is bad for business. But in a classic case of the market remaining irrational longer then any one participant can remain solvent, the big banks became so leveraged, and their retail and investment arms so entangled, that allowing market forces to operate in late 2008 would have meant the collapse of the payments system. A similar problem obtained after the Great depression; hardly anyone went to jail because although everyone agreed it was a massive disaster, it was a product of hubris rather than malice. See http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/untouchables/were-bankers-jailed-in-past-financial-crises/ http://www.pbs.org/wgbh/pages/frontline/business-economy-fin... for a simple overview of the situation. There was a lot of bloodletting in the government - not in terms of people going to jail, but in terms of agencies being dismantled or massively reorganized. Agencies like the Office of Thrift Supervision, whose income derived entirely from regulatory fees and so had every incentive to keep as many banks in existence as possible, were shut down completely. Instead we have the Consumer Financial Protection Bureau, and a mass of new investment compliance requirements under the Dodd-Frank legislation...a bit like the way national security was massively reorganized after the 9/11 incident so that we got the Department of Homeland Security and a ton of new anti-terrorism legislation. Unfortunately I don't think these reorganizations have made us significantly safer; they were well-intentioned but IMHO simply shifted the risk around and substituted elaborate and very expensive compliance regimes for true structural reform. With hindsight, it would have been a lot better if Obama's administration had a) siezed the political momentum that swept him into office to reinstitute the relatively simple Glass-Steagall regulatory regime, b) required the megabanks like Citi, BofA etc. to demerge their retail and investment arms in short order, and c) encouraged large numbers of bankers to take early retirement and leave ethe industry forever or expect 4 years of legal harrassment - and no, I don't think the last suggestion is good law, but it might nevertheless have been an appropriate exercise of political power. The thing is, if you look at how the industry has been treated from a right-wing standpoint, the administration is engaged in an apparently never-ending shakedown of Wall Street motivated by the President's ardent desire to destroy capitalism. There are lots of people out there who think the financial crisis was just good capitalism and so what if a lot of people wound up losing their homes, they didn't deserve them anyway because they were losers - asin Rick Santelli's (in)famous rant fromt he floor of the Chicago Mercantile Exchange that's often credited with launching the Tea Party movement: http://opinionator.blogs.nytimes.com/2009/02/20/rick-santelli-tea-party-time/ http://opinionator.blogs.nytimes.com/2009/02/20/rick-santell... Let's not forget that this was in February 2009, after Obama had been in office less than a month. His administration has faced angry and arguably militant opposition towards its reform efforts from the very beginning, because there's a large reactionary contingent that considers the Democratic party in general and Obama in particular as agents of communism (there's a kind of reactionary foolishness on the left too, that thinks it's OK to just jack up taxes, confiscate wealth, and hold show trials - but IMHO that's a smaller and less powerful demographic). So arguably, the current regulatory regime is the result of an attempt to minimize political as well as fiscal instability.
bko 12y ago
I think prosecutors would rather fine the banks tens of billions of dollars rather than throw people into jail. For instance, the JPM $13 billion settlement (summarized): - $2 billion to the Justice Department, which will then deposit the money into a fund at the United States Treasury. - $7 billion, will flow to a range of government authorities, some more obscure than others - JPMorgan agreed to make a “lump sum payment” of $4 billion “payable to Freddie Mac and Fannie Mae, divided between them,” - The National Credit Union Administration, the federal agency that regulates credit unions, said it would collect a $1.4 billion share of the $7 billion pie “for losses incurred by corporate credit unions as a result of the purchases of the faulty securities.” - $515 million goes to FDIC - $613 million to NY Attorney General (expand homeowner assistance programs) etc, etc, etc... [0] http://dealbook.nytimes.com/2013/11/20/where-does-jpmorgans-13-billion-go/?_r=0 http://dealbook.nytimes.com/2013/11/20/where-does-jpmorgans-...
tokenadult 12y ago
This could be taken to mean that society (correctly, in my opinion) considers the work of schoolteachers to be more crucial for the future of our society than the work of "Wall Streeters." With a more important role in society comes higher responsibility and just possibly greater accountability. The Answer Sheet opinion blog, from which this post commenting on a Jon Stewart Daily Show is kindly submitted for our discussion, basically has a theme of decrying any public policy that makes schoolteachers accountable for actually teaching something to the learners in their care. That's a defensible policy position, I suppose, if you think that employment in the public school system is a jobs program for graduates of teacher-training programs. But I think it is also a defensible policy position to agree that spending money on schools is good, good for society in general, but especially so if the schools actually help learners learn. If learners are not learning well in school, and similarly disadvantaged learners in other schools are learning better, let's learn from the schools that are doing better how they are succeeding, and emulate their practices. That doesn't sound very radical to me. Right now in the United States, the school-to-school variance in learning results of pupils is not very large, not even particularly large between poor and rich neighborhoods (by international comparisons).[1] But the teacher-to-teacher variance in teaching effectiveness within any one school is quite large, and one of the best things schools could do to become more effective rapidly is simply to hire the best available teachers, and let the lowest few percent of teachers (by teacher effectiveness) seek other occupations more suited to their abilities.[2] Other measures to improve teacher quality will also be helpful for schools and the learners in their care.[3] Teachers who cheat on tests used in part to gauge the effectiveness of teachers cheat all of society out of having better teachers. [1] http://educationnext.org/when-the-best-is-mediocre/ http://educationnext.org/when-the-best-is-mediocre/ [2] http://hanushek.stanford.edu/sites/default/files/publications/Hanushek%202009%20Teacher%20Deselection.pdf http://hanushek.stanford.edu/sites/default/files/publication... http://hanushek.stanford.edu/publications/valuing-teachers-how-much-good-teacher-worth http://hanushek.stanford.edu/publications/valuing-teachers-h... [3] http://hanushek.stanford.edu/sites/default/files/publications/Hanushek%202014%20Koret%20ch2.pdf http://hanushek.stanford.edu/sites/default/files/publication...
- s73v3r 12y ago
  "This could be taken to mean that society (correctly, in my opinion) considers the work of schoolteachers to be more crucial for the future of our society than the work of "Wall Streeters." " If that were true, wouldn't we pay them more and treat them better?
godgod 12y ago
There are rules for us and then there are rules for them.
scelerat 12y ago
Stewart's comparisons remind me of Eddie Izzard's riff on mass murderers. Small numbers of crimes, committed by a small number of people: easy to grasp and easy to prosecute; large numbers of crimes committed systemically: the mind boggles; medals more likely than punishment. Izzard (NSFW): https://www.youtube.com/watch?v=Bk_pHZmn5QM https://www.youtube.com/watch?v=Bk_pHZmn5QM
jessaustin 12y ago
If we really cared to prevent "financial crises" like the one under discussion, we wouldn't be wringing our hands about whom to imprison. Instead, when firms went bust, we'd leave them that way. When all the money is gone, shareholder lawsuits will punish corrupt and incompetent executives more than prosecutors ever dreamed. EDIT: for those who've forgotten what actually happened, Taibbi has a good primer: http://www.rollingstone.com/politics/news/secret-and-lies-of-the-bailout-20130104 http://www.rollingstone.com/politics/news/secret-and-lies-of...
2close4comfort 12y ago
Jail is for people who can't afford to get out of it.
- jodah 12y ago
  Apathetic, but true. In the case of teachers versus bankers, it's more about the institutions than the individuals, and the protections that come with working for those institutions.
- smackfu 12y ago
  OTOH, the teachers who got a jail sentence are the ones who didn't take a deal, even after being found guilty. Not really about money more than principles.
- damian2000 12y ago
  I was thinking that when watching a doco about western tourists to Thailand who get caught with small amounts of a drug on them. They get shaken down by the local police for a few thousand dollars, up to whatever they can afford. Those who can't pay get put in jail for a while. Not sure if it was bribery or what, but it seemed accepted by everyone involved.
  - tsotha 12y ago
    That's not really an apples-to-apples comparison. Places with lots of tourists usually go pretty easy on them whenever it's possible. You don't want to scare your meal ticket into going somewhere else.
falsestprophet 12y ago
Jon Stewart's thesis is that teachers are punished for crimes and "Wall Street" is not. In this segment he singularly cites the actions of loan officers soliciting incorrect information comparing their actions to teachers falsifying test results. First of all, loan officers are hardly "Wall Street" fat cats. They are low level employees who are paid an average of $50,000 [1] and do not work for "Wall Street" firms like investment banks. Secondly, loan officers operate throughout the United States rather than actually on Wall Street or in Manhattan and, as a group, are subject to the jurisdiction of the federal government, 50 states, and 3,144 counties each with independent prosecutors (elected state's attorneys, district attorneys, etc.). If none of the thousands of entities who could have brought cases have done so, either there is conspiracy vaster than any other or there are not credible cases to bring. [1] http://www.glassdoor.com/Salaries/loan-officer-salary-SRCH_KO0,12.htm http://www.glassdoor.com/Salaries/loan-officer-salary-SRCH_K...
- malandrew 12y ago
  While I hate the plea bargaining system, this would be a great opportunity to use it to get at those up at the top. Use the $50k a year people to get the managers. Use the managers to get their managers, so on and so forth. Anyone at the very bottom that takes the plea gets off scott-free. As you move up the food chain, you hand greater sentences.
  - agwa 12y ago
    Why is something that you profess to hate suddenly acceptable in this situation?
    - malandrew 12y ago
      Honestly, I would be okay with plea bargaining if the only bargain that could be offer the DA could make is getting off completely, not a lesser sentence. Perhaps a reasonable fine would be okay if it were enough to teach someone the risk isn't worth the reward, but not so high that it screws them for life or bankrupts them. Either way plea bargains shouldn't involve lots of jail time vs less jail time.
15step 12y ago
You don't have to go any farther then the fact that Navinder Sarao might go to jail for 20 years, but Jon Corzine, the CEO of the brokerage Sarao used, continues to walk free as one of the must successful failures ever.
MrZongle2 12y ago
Simple: there are two Americas. The first is the one that is populated by the wealthy and the elite; some people you've heard of, and a lot you've not. They're former Presidents and senators, important political donors, lobbyists, and a cloud of related individuals that orbit trust funds and old money. This America features well-groomed lawns, catered luncheons, executive offices, first-class health care, golden parachutes and custom transportation. The second is where the rest of us live. It features waiting both in lines and on telephones, meals grabbed on the fly, taxation, potential observation and harassment by Federal or local security agencies, wildly varying health care, and advertisements on everything.
- vinay427 12y ago
  It's important to note that there are significant overlaps here, especially in daily life habits. What this boils down to is income inequality and the different lifestyles that result.
- atom-morgan 12y ago
  Example: Petraeus just got a slap on the wrist
rhino369 12y ago
Mortgage loan offices aren't quite "Wall Streeters." These are people in your local communities and they are defrauding the people loaning the money, who are wall street people. So not like Gordon Gecko or Leo in Wolf of Wallstreet. But the guy in the illfitted suit who pesters you about mortgages when you in line to deposit a check. I make this point because these people aren't super rich wall street people above the law. And plenty more than one were caught and jailed for it, I've found 4 examples on the first page of my bing search. Stewart is saying only one bank exec went to jail, but bank execs weren't the ones doing this mortgage fraud. Some "Wall Street" banks do sell mortgages directly and would employ these mortgage offices, but a lot banks don't like Goldman Sachs, the former Lehman Bros. The question is whether big commercial banks were complicit in the fraud of their lower level employees. You'd need to find an email or someone willing to testify that the banks knew that the loan offices in podunk were encouraging fraud. That is an extremely tough case to prove without solid evidence. Also, this kind of document fraud was only a minor part of the financial collapse. The big mistake, which Stewart briefly touched on, was that the rating agencies massive fucked up. The financial risk model they used didn't work.
- ConfuciusSay 12y ago
  The big financial institutions were demonstrably complicit in the fraud of the underwriters and loan officers. There are emails, and plenty of people willing to testify. The problem is that the SEC and DOJ never pursued those investigations. A while back, Frontline did their own investigation on this very topic, and interviewed multiple underwriters and loan officers who said that the higher ups on Wall Street were literally directing everyone to not abide by their own standards. You can watch the entire documentary here: http://www.pbs.org/wgbh/pages/frontline/untouchables/ http://www.pbs.org/wgbh/pages/frontline/untouchables/ Lanny Breuer from the DOJ was interviewed in this documentary, and his attempt to explain why the DOJ did not pursue any charges on executives was so laughable, and the evidence presented from Frontline's cursory investigation was so damning, that Mr. Breuer resigned days after the program was aired. After not prosecuting any banking executives, he then of course went on through the revolving door to make $4M/year by taking a position at a corporate law/lobbying firm that defends financial institutions. This is NOT a "tough case" - the solid evidence is there. This is a case of a captured regulatory system. Also, to say that ratings agencies simply "fucked up" is disingenuous. They were totally and knowingly complicit as well. The way the system was set up, the more they gave good ratings to crap, the more money they made. That's not just a "fuck up". To the main point of the rant, aside from the regulatory capture, the difference between teachers and Wall Street is that Wall Street is very good at setting up a system where there's plausible deniability for executives, massive lobbying efforts to garner political influence, and if needed, gigantic legal teams to fight for every inch.
_yosefk 12y ago
You know who never goes to jail? Regulators. Madoff, for instance, moved from Wall Street into a cell where he belongs, refuting the above headline. His regulators, however, weren't even charged with anything AFAIK. That despite their inaction for many years being either criminal negligence or the result of being bribed. (From http://www.bloombergview.com/articles/2014-01-07/jpmorgan-pays-for-shorting-madoff-without-telling-anyone http://www.bloombergview.com/articles/2014-01-07/jpmorgan-pa... - "The government regulators, led by the Securities and Exchange Commission, also didn't catch Bernie Madoff, even though they were his regulators and that was literally their job. And while yes JPMorgan ignored some red flags, so did the SEC. Like, the many many credible letters they got to the effect of "Bernie Madoff is a big ol' Ponzi scheme." Should the SEC be paying an even bigger penalty than $1.7 billion?")
- Lawtonfogle 12y ago
  >You know who never goes to jail? Regulators. Are they paid enough for that increase in risk? I don't know what they make, but other government positions are already underpaid compared to their private sector equivalents. Making them come with a risk of jail time for failing ones job too badly will only result in even less qualified people filling those positions.
  - tapp 12y ago
    I've often thought that we should pay financial regulators competitively with what they could make in the private sector AND in conjunction institute some kind of sweeping moratorium (e.g. you may not take any corresponding job in the private sector for at least 10 years after your government service ends.) I'm sure this would be politically untenable. Headlines would cry about absurd salaries being given to government employees. However I'm equally confident it would save us money in the long run. The current system seems almost designed to create toothless regulators and a revolving door.
    - Lawtonfogle 12y ago
      I dare say the majority of government waste and other problems are simply a case of 'you get what you pay for'.
pg_is_a_butt 12y ago
children are what's up, moron.
brohoolio 12y ago
Seriously.
Animats 12y ago
This is perhaps the biggest failure in the aftermath of the 2008 financial collapse. There should have been many more criminal prosecutions on Wall Street. It didn't help that the Secretary of the Treasury at the time came from Goldman Sachs. Criminal convictions of CEOs are useful. They're very effective in changing CEO behavior. Sending a few low-level drug dealers to jail for a year does little to change drug dealer behavior in the neighborhood. Sending a few Fortune 500 CEOs to jail for a year tends to result in substantial CEO behavior modification. There was a famous example of this in 1961, when executives of GE, Westinghouse, and Allis-Chalmers were found guilty of price-fixing and sent to jail. That changed corporate anti-trust behavior for a generation.
- crazy1van 12y ago
  > Criminal convictions of CEOs are useful. Yes, if they actually committed a crime and there is evidence to prove it beyond a reasonable doubt. A drug dealer who gives all his money to feed the poor is morally good but legally a criminal. A CEO who lays off a chunk of his company to upgrade his yacht is a slimeball but not a criminal. Being morally repugnant is not the same as being a criminal. The urge to ignore the letter of the law and obey the will of the mob turns us into a nation of men instead of a nation of laws.
  - eli_gottlieb 12y ago
    There's not much point being a nation of unjust laws, so they should probably be rewritten to criminalize the really severe harms and impose less penalty on less-severe harms.
- jsprogrammer 12y ago
  People should not be punished soley to 'make an example' or for large-scale 'behavior modification'. Punishment should only be doled out for actual wrongdoings and only proportional to that individual's actions.
  - anigbrowl 12y ago
    You're assuming that the CEOs cited in the example were not actually guilty.
suprgeek 12y ago
Politically connected & Rich people do not go to Jail for White-collar crimes. Think about the revolving door between Wall street and the Obama/Bush/Clinton administrations. Would you put your "buddy" in Jail if it meant that the political contributions would dry up and your opponent is going to get a war chest to fight you? Of course not! But an educator? These people cheated to keep their jobs and get (minor) pay raises - by definition they cannot fight back so the full weight of the Criminal Justice system (Racketeering Laws - typically used against Mafia figures) was used to toss some of them in Jail for upto 20 years! Let's face it - the American Criminal justice system basically preys on those least able to protect themselves from its abuses.
- MaysonL 12y ago
  Charles Keating was fairly well connected: remember the "Keating Five"? (US Senators who tried to influence regulators to go easy on Keating) He spent over four years in federal prison after being convicted of white collar crimes.
xmlblog 12y ago
It's called money.
jrockway 12y ago
Privileged Wall St. firms can afford better lawyers than schoolteachers in Atlanta? I had no idea...
crimsonalucard 12y ago
Black people get shot up by police, white people don't. What's up?
- tzs 12y ago
  White people get shot by police. You have to look to find the cases, though, because they don't generally make the national news. Here are a few. http://wreg.com/2014/11/25/salt-lake-cop-cleared-in-shooting-of-unarmed-white-man/ http://wreg.com/2014/11/25/salt-lake-cop-cleared-in-shooting... http://wreg.com/2015/04/22/family-of-unarmed-white-man-killed-by-police-to-be-paid-3-million/ http://wreg.com/2015/04/22/family-of-unarmed-white-man-kille... http://www.washingtontimes.com/news/2014/nov/27/white-teen-gilbert-collar-killed-by-black-cop-trev/?page=all http://www.washingtontimes.com/news/2014/nov/27/white-teen-g... In fact, more white people than black people are shot by police in the US. The rate for blacks getting shot is higher, but not the number.
  - kakkou 11y ago
    Yet these stories don't make it onto the national news? They aren't plastered all over CNN? Where are the riots for these deaths?
- tsotha 12y ago
  What's up is it's national news when a black person gets shot by a white cop, and when it's a white person taking the bullet the story stays on the local crime blotter.
  - dragonwriter 12y ago
    Its national news when unarmed people are shoot by cops and eyewitness reports or other early evidence suggests there is no good cause for the shooting, which for some reason happens more often when white cops shoot black people than any other combination.
    - tsotha 12y ago
tomohawk 12y ago
I would hope that adults entrusted with the care of our children and betraying that trust would be punished much more severely than wall streeters engaged in some sort of shenanigans.
- jgoewert 12y ago
  I would hope that adults entrusted with the care of our children would be paid more to get the top talent the job requires. Even a 1% change in a students learning is an immeasurable sum of profit to an organization and someone who can eek that out should get the compensation due.
goldfeld 12y ago
What about those teaching cheaters?
heisenbit 12y ago
There is a huge cultural problem and the teachers and MBS scandals are just the tip of the iceberg. When it is acceptable that results count no matter what the means. When it is acceptable that results are measured by a single number. When conflicts of interest are ignored by regulators Then you get: - inflated grades - inflated assessments of property values but also: - inflated arrests by policeman chasing quotas instead of helping citizens (in other parts of the world police are reluctant to arrest people due to dislike of paperwork) - inflated claims by prosecutors turning a blind eye to weak evidence (in other parts of the world prosecutors don't fear for their own job) - inflated money printing - inflated tech stock valuations - prolonged ignorance of default risks - HFT Markets work but there is such a thing as externalized costs. Regulators have a duty to monitor and step in when the line is overstepped. If they don't the benefits accrue to the powerful who cheat and the cost are born by the powerless. It is a good thing that the "regulator" stepped in and stopped the teachers grade inflation. However the way the regulator did this here is another example of single minded black and white thinking. Just because the grade inflation problem is bad it does not mean one can fix it with a single blow of a heavy hammer. Fear of rare random enforcement actions will only intimidate the people but won't stop further crimes. Hard real life problems need well planned, consistently implemented and balanced measures.

307 points by grej 12y ago

Because it's easy to understand why cheating on tests is wrong, and easy to explain to a jury what people did that was wrong. Try to explain LIBOR manipulation to a jury and explain why it's wrong.

mjgoins 12y ago
Bull fucking shit.
- deleted 12y ago
  [deleted]
- jodah 12y ago
  If you read the rationale for why prosecutors don't even bother going after a lot of the banking fraud, it's often because of the complexity. This is obviously more about prosecutors lacking guts (and political will) than it is any shortcoming of jurors, but complexity is a problem.
wavefunction 12y ago
I am pretty sure I could do that. The more accurate answer is that rich and connected people are rarely held to account for their heinous crimes against the rest of us.
robot22 12y ago
I would agree with you if there were a history of difficulties prosecuting white collar crime.
claytonjy 12y ago
I wanted to say "but that's why they get a jury of their peers, people that know what means!" but then I remembered not only would that not happen, but even if it did, those same peers would likely have a tribe mentality and seek to protect their own.
wppick 12y ago
Teachers have much less money to spend on lawyers. If you steal/scam/cheat billions of dollars you can then afford a great team of lawyers
- happyscrappy 12y ago
  Well that would usually be the teachers unions but they are not going to go on a suicide mission to defend these teachers.
grej 12y ago
In order to explain that to a jury, you have to actually charge someone with a crime.
2close4comfort 12y ago
Plus if you give enough money to the right people you never even get indicted so there you dont have to get involved with juries and mess stuff like that.
kaa2102 12y ago
A regulator or prosecutor needs to first be willing to charge a bank or Wall Street executive before anything can get to a jury.
- deleted 12y ago
  [deleted]
Zigurd 12y ago
Tax dodges, like straddles, are hard to explain, yet they get prosecuted.
- rayiner 12y ago
  In a tax case, the legality of the conduct can be proven almost entirely on the papers. Everything relevant to the prosecution is in a formal financial document somewhere. In a financial fraud case, the evidentiary problem is much harder. The difference between a legal transaction and an illegal one is often what was in the person's head, not just things you can deduce from a paper record. Sometimes you have emails or the like to fill in the blanks, but often you don't.
  - anigbrowl 12y ago
    Not to mention that the volume of discovery materials is so huge that it costs a fortune in both hourly wages and time to comb through it, and lack of resources has often been a problem at the DoJ; plus, with such a huge volume of evidence to sift through, the procedural arguments over what is admissible and so on and can be strung out for years on end. I think a lot of commenters here don't appreciate that prosecuting a large bank involves sifting through literally tens of millions of documents looking for patterns of intentionality, which as you say is very hard to prove, and where the subjects of the investigations in question know it's hard to prove. Nobody gets anywhere in the financial industry without a very good knowledge of securities law, whereas it's highly unlikely the teachers in Atlanta didn't cover up their malfeasance very effectively and their defense could almost be summed up as 'what's the big deal?'. That said, I think the lack of prosecutions was partly political. If the administration had gone nuclear on Wall Street as soon as it came into office (which was when anti-financial sentiment was at its peak) then it would have laid waste to the US financial industry and could have caused a far worse financial and economic collapse than the one we experience. It's no good pointing to things like the S&L crisis as many people do; that was a different, and much stricter regulatory environment. The reason (IMHO) that the financial crisis was so severe was that we deregulated the financial industry heavily in the late 1990s, and so a great many of the systemically risky activities that eventually proved unsustainable were not illegal. It was assumed when Glass-Steagall was dismantled that the market would flush out excessively risky players because too much risk is bad for business. But in a classic case of the market remaining irrational longer then any one participant can remain solvent, the big banks became so leveraged, and their retail and investment arms so entangled, that allowing market forces to operate in late 2008 would have meant the collapse of the payments system. A similar problem obtained after the Great depression; hardly anyone went to jail because although everyone agreed it was a massive disaster, it was a product of hubris rather than malice. See http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/untouchables/were-bankers-jailed-in-past-financial-crises/ http://www.pbs.org/wgbh/pages/frontline/business-economy-fin... for a simple overview of the situation. There was a lot of bloodletting in the government - not in terms of people going to jail, but in terms of agencies being dismantled or massively reorganized. Agencies like the Office of Thrift Supervision, whose income derived entirely from regulatory fees and so had every incentive to keep as many banks in existence as possible, were shut down completely. Instead we have the Consumer Financial Protection Bureau, and a mass of new investment compliance requirements under the Dodd-Frank legislation...a bit like the way national security was massively reorganized after the 9/11 incident so that we got the Department of Homeland Security and a ton of new anti-terrorism legislation. Unfortunately I don't think these reorganizations have made us significantly safer; they were well-intentioned but IMHO simply shifted the risk around and substituted elaborate and very expensive compliance regimes for true structural reform. With hindsight, it would have been a lot better if Obama's administration had a) siezed the political momentum that swept him into office to reinstitute the relatively simple Glass-Steagall regulatory regime, b) required the megabanks like Citi, BofA etc. to demerge their retail and investment arms in short order, and c) encouraged large numbers of bankers to take early retirement and leave ethe industry forever or expect 4 years of legal harrassment - and no, I don't think the last suggestion is good law, but it might nevertheless have been an appropriate exercise of political power. The thing is, if you look at how the industry has been treated from a right-wing standpoint, the administration is engaged in an apparently never-ending shakedown of Wall Street motivated by the President's ardent desire to destroy capitalism. There are lots of people out there who think the financial crisis was just good capitalism and so what if a lot of people wound up losing their homes, they didn't deserve them anyway because they were losers - asin Rick Santelli's (in)famous rant fromt he floor of the Chicago Mercantile Exchange that's often credited with launching the Tea Party movement: http://opinionator.blogs.nytimes.com/2009/02/20/rick-santelli-tea-party-time/ http://opinionator.blogs.nytimes.com/2009/02/20/rick-santell... Let's not forget that this was in February 2009, after Obama had been in office less than a month. His administration has faced angry and arguably militant opposition towards its reform efforts from the very beginning, because there's a large reactionary contingent that considers the Democratic party in general and Obama in particular as agents of communism (there's a kind of reactionary foolishness on the left too, that thinks it's OK to just jack up taxes, confiscate wealth, and hold show trials - but IMHO that's a smaller and less powerful demographic). So arguably, the current regulatory regime is the result of an attempt to minimize political as well as fiscal instability.

bko 12y ago

I think prosecutors would rather fine the banks tens of billions of dollars rather than throw people into jail. For instance, the JPM $13 billion settlement (summarized): - $2 billion to the Justice Department, which will then deposit the money into a fund at the United States Treasury. - $7 billion, will flow to a range of government authorities, some more obscure than others - JPMorgan agreed to make a “lump sum payment” of $4 billion “payable to Freddie Mac and Fannie Mae, divided between them,” - The National Credit Union Administration, the federal agency that regulates credit unions, said it would collect a $1.4 billion share of the $7 billion pie “for losses incurred by corporate credit unions as a result of the purchases of the faulty securities.” - $515 million goes to FDIC - $613 million to NY Attorney General (expand homeowner assistance programs) etc, etc, etc... [0] http://dealbook.nytimes.com/2013/11/20/where-does-jpmorgans-13-billion-go/?_r=0 http://dealbook.nytimes.com/2013/11/20/where-does-jpmorgans-...

tokenadult 12y ago

This could be taken to mean that society (correctly, in my opinion) considers the work of schoolteachers to be more crucial for the future of our society than the work of "Wall Streeters." With a more important role in society comes higher responsibility and just possibly greater accountability. The Answer Sheet opinion blog, from which this post commenting on a Jon Stewart Daily Show is kindly submitted for our discussion, basically has a theme of decrying any public policy that makes schoolteachers accountable for actually teaching something to the learners in their care. That's a defensible policy position, I suppose, if you think that employment in the public school system is a jobs program for graduates of teacher-training programs. But I think it is also a defensible policy position to agree that spending money on schools is good, good for society in general, but especially so if the schools actually help learners learn. If learners are not learning well in school, and similarly disadvantaged learners in other schools are learning better, let's learn from the schools that are doing better how they are succeeding, and emulate their practices. That doesn't sound very radical to me. Right now in the United States, the school-to-school variance in learning results of pupils is not very large, not even particularly large between poor and rich neighborhoods (by international comparisons).[1] But the teacher-to-teacher variance in teaching effectiveness within any one school is quite large, and one of the best things schools could do to become more effective rapidly is simply to hire the best available teachers, and let the lowest few percent of teachers (by teacher effectiveness) seek other occupations more suited to their abilities.[2] Other measures to improve teacher quality will also be helpful for schools and the learners in their care.[3] Teachers who cheat on tests used in part to gauge the effectiveness of teachers cheat all of society out of having better teachers. [1] http://educationnext.org/when-the-best-is-mediocre/ http://educationnext.org/when-the-best-is-mediocre/ [2] http://hanushek.stanford.edu/sites/default/files/publications/Hanushek%202009%20Teacher%20Deselection.pdf http://hanushek.stanford.edu/sites/default/files/publication... http://hanushek.stanford.edu/publications/valuing-teachers-how-much-good-teacher-worth http://hanushek.stanford.edu/publications/valuing-teachers-h... [3] http://hanushek.stanford.edu/sites/default/files/publications/Hanushek%202014%20Koret%20ch2.pdf http://hanushek.stanford.edu/sites/default/files/publication...

s73v3r 12y ago
"This could be taken to mean that society (correctly, in my opinion) considers the work of schoolteachers to be more crucial for the future of our society than the work of "Wall Streeters." " If that were true, wouldn't we pay them more and treat them better?

godgod 12y ago

There are rules for us and then there are rules for them.

scelerat 12y ago

Stewart's comparisons remind me of Eddie Izzard's riff on mass murderers. Small numbers of crimes, committed by a small number of people: easy to grasp and easy to prosecute; large numbers of crimes committed systemically: the mind boggles; medals more likely than punishment. Izzard (NSFW): https://www.youtube.com/watch?v=Bk_pHZmn5QM https://www.youtube.com/watch?v=Bk_pHZmn5QM

jessaustin 12y ago

If we really cared to prevent "financial crises" like the one under discussion, we wouldn't be wringing our hands about whom to imprison. Instead, when firms went bust, we'd leave them that way. When all the money is gone, shareholder lawsuits will punish corrupt and incompetent executives more than prosecutors ever dreamed. EDIT: for those who've forgotten what actually happened, Taibbi has a good primer: http://www.rollingstone.com/politics/news/secret-and-lies-of-the-bailout-20130104 http://www.rollingstone.com/politics/news/secret-and-lies-of...

2close4comfort 12y ago

Jail is for people who can't afford to get out of it.

jodah 12y ago
Apathetic, but true. In the case of teachers versus bankers, it's more about the institutions than the individuals, and the protections that come with working for those institutions.
smackfu 12y ago
OTOH, the teachers who got a jail sentence are the ones who didn't take a deal, even after being found guilty. Not really about money more than principles.
damian2000 12y ago
I was thinking that when watching a doco about western tourists to Thailand who get caught with small amounts of a drug on them. They get shaken down by the local police for a few thousand dollars, up to whatever they can afford. Those who can't pay get put in jail for a while. Not sure if it was bribery or what, but it seemed accepted by everyone involved.
- tsotha 12y ago
  That's not really an apples-to-apples comparison. Places with lots of tourists usually go pretty easy on them whenever it's possible. You don't want to scare your meal ticket into going somewhere else.

falsestprophet 12y ago

Jon Stewart's thesis is that teachers are punished for crimes and "Wall Street" is not. In this segment he singularly cites the actions of loan officers soliciting incorrect information comparing their actions to teachers falsifying test results. First of all, loan officers are hardly "Wall Street" fat cats. They are low level employees who are paid an average of $50,000 [1] and do not work for "Wall Street" firms like investment banks. Secondly, loan officers operate throughout the United States rather than actually on Wall Street or in Manhattan and, as a group, are subject to the jurisdiction of the federal government, 50 states, and 3,144 counties each with independent prosecutors (elected state's attorneys, district attorneys, etc.). If none of the thousands of entities who could have brought cases have done so, either there is conspiracy vaster than any other or there are not credible cases to bring. [1] http://www.glassdoor.com/Salaries/loan-officer-salary-SRCH_KO0,12.htm http://www.glassdoor.com/Salaries/loan-officer-salary-SRCH_K...

malandrew 12y ago
While I hate the plea bargaining system, this would be a great opportunity to use it to get at those up at the top. Use the $50k a year people to get the managers. Use the managers to get their managers, so on and so forth. Anyone at the very bottom that takes the plea gets off scott-free. As you move up the food chain, you hand greater sentences.
- agwa 12y ago
  Why is something that you profess to hate suddenly acceptable in this situation?
  - malandrew 12y ago
    Honestly, I would be okay with plea bargaining if the only bargain that could be offer the DA could make is getting off completely, not a lesser sentence. Perhaps a reasonable fine would be okay if it were enough to teach someone the risk isn't worth the reward, but not so high that it screws them for life or bankrupts them. Either way plea bargains shouldn't involve lots of jail time vs less jail time.

15step 12y ago

You don't have to go any farther then the fact that Navinder Sarao might go to jail for 20 years, but Jon Corzine, the CEO of the brokerage Sarao used, continues to walk free as one of the must successful failures ever.

MrZongle2 12y ago

Simple: there are two Americas. The first is the one that is populated by the wealthy and the elite; some people you've heard of, and a lot you've not. They're former Presidents and senators, important political donors, lobbyists, and a cloud of related individuals that orbit trust funds and old money. This America features well-groomed lawns, catered luncheons, executive offices, first-class health care, golden parachutes and custom transportation. The second is where the rest of us live. It features waiting both in lines and on telephones, meals grabbed on the fly, taxation, potential observation and harassment by Federal or local security agencies, wildly varying health care, and advertisements on everything.

vinay427 12y ago
It's important to note that there are significant overlaps here, especially in daily life habits. What this boils down to is income inequality and the different lifestyles that result.
atom-morgan 12y ago
Example: Petraeus just got a slap on the wrist

rhino369 12y ago

Mortgage loan offices aren't quite "Wall Streeters." These are people in your local communities and they are defrauding the people loaning the money, who are wall street people. So not like Gordon Gecko or Leo in Wolf of Wallstreet. But the guy in the illfitted suit who pesters you about mortgages when you in line to deposit a check. I make this point because these people aren't super rich wall street people above the law. And plenty more than one were caught and jailed for it, I've found 4 examples on the first page of my bing search. Stewart is saying only one bank exec went to jail, but bank execs weren't the ones doing this mortgage fraud. Some "Wall Street" banks do sell mortgages directly and would employ these mortgage offices, but a lot banks don't like Goldman Sachs, the former Lehman Bros. The question is whether big commercial banks were complicit in the fraud of their lower level employees. You'd need to find an email or someone willing to testify that the banks knew that the loan offices in podunk were encouraging fraud. That is an extremely tough case to prove without solid evidence. Also, this kind of document fraud was only a minor part of the financial collapse. The big mistake, which Stewart briefly touched on, was that the rating agencies massive fucked up. The financial risk model they used didn't work.

ConfuciusSay 12y ago
The big financial institutions were demonstrably complicit in the fraud of the underwriters and loan officers. There are emails, and plenty of people willing to testify. The problem is that the SEC and DOJ never pursued those investigations. A while back, Frontline did their own investigation on this very topic, and interviewed multiple underwriters and loan officers who said that the higher ups on Wall Street were literally directing everyone to not abide by their own standards. You can watch the entire documentary here: http://www.pbs.org/wgbh/pages/frontline/untouchables/ http://www.pbs.org/wgbh/pages/frontline/untouchables/ Lanny Breuer from the DOJ was interviewed in this documentary, and his attempt to explain why the DOJ did not pursue any charges on executives was so laughable, and the evidence presented from Frontline's cursory investigation was so damning, that Mr. Breuer resigned days after the program was aired. After not prosecuting any banking executives, he then of course went on through the revolving door to make $4M/year by taking a position at a corporate law/lobbying firm that defends financial institutions. This is NOT a "tough case" - the solid evidence is there. This is a case of a captured regulatory system. Also, to say that ratings agencies simply "fucked up" is disingenuous. They were totally and knowingly complicit as well. The way the system was set up, the more they gave good ratings to crap, the more money they made. That's not just a "fuck up". To the main point of the rant, aside from the regulatory capture, the difference between teachers and Wall Street is that Wall Street is very good at setting up a system where there's plausible deniability for executives, massive lobbying efforts to garner political influence, and if needed, gigantic legal teams to fight for every inch.

_yosefk 12y ago

You know who never goes to jail? Regulators. Madoff, for instance, moved from Wall Street into a cell where he belongs, refuting the above headline. His regulators, however, weren't even charged with anything AFAIK. That despite their inaction for many years being either criminal negligence or the result of being bribed. (From http://www.bloombergview.com/articles/2014-01-07/jpmorgan-pays-for-shorting-madoff-without-telling-anyone http://www.bloombergview.com/articles/2014-01-07/jpmorgan-pa... - "The government regulators, led by the Securities and Exchange Commission, also didn't catch Bernie Madoff, even though they were his regulators and that was literally their job. And while yes JPMorgan ignored some red flags, so did the SEC. Like, the many many credible letters they got to the effect of "Bernie Madoff is a big ol' Ponzi scheme." Should the SEC be paying an even bigger penalty than $1.7 billion?")

Lawtonfogle 12y ago
>You know who never goes to jail? Regulators. Are they paid enough for that increase in risk? I don't know what they make, but other government positions are already underpaid compared to their private sector equivalents. Making them come with a risk of jail time for failing ones job too badly will only result in even less qualified people filling those positions.
- tapp 12y ago
  I've often thought that we should pay financial regulators competitively with what they could make in the private sector AND in conjunction institute some kind of sweeping moratorium (e.g. you may not take any corresponding job in the private sector for at least 10 years after your government service ends.) I'm sure this would be politically untenable. Headlines would cry about absurd salaries being given to government employees. However I'm equally confident it would save us money in the long run. The current system seems almost designed to create toothless regulators and a revolving door.
  - Lawtonfogle 12y ago
    I dare say the majority of government waste and other problems are simply a case of 'you get what you pay for'.

pg_is_a_butt 12y ago

children are what's up, moron.

brohoolio 12y ago

Seriously.

Animats 12y ago

This is perhaps the biggest failure in the aftermath of the 2008 financial collapse. There should have been many more criminal prosecutions on Wall Street. It didn't help that the Secretary of the Treasury at the time came from Goldman Sachs. Criminal convictions of CEOs are useful. They're very effective in changing CEO behavior. Sending a few low-level drug dealers to jail for a year does little to change drug dealer behavior in the neighborhood. Sending a few Fortune 500 CEOs to jail for a year tends to result in substantial CEO behavior modification. There was a famous example of this in 1961, when executives of GE, Westinghouse, and Allis-Chalmers were found guilty of price-fixing and sent to jail. That changed corporate anti-trust behavior for a generation.

crazy1van 12y ago
> Criminal convictions of CEOs are useful. Yes, if they actually committed a crime and there is evidence to prove it beyond a reasonable doubt. A drug dealer who gives all his money to feed the poor is morally good but legally a criminal. A CEO who lays off a chunk of his company to upgrade his yacht is a slimeball but not a criminal. Being morally repugnant is not the same as being a criminal. The urge to ignore the letter of the law and obey the will of the mob turns us into a nation of men instead of a nation of laws.
- eli_gottlieb 12y ago
  There's not much point being a nation of unjust laws, so they should probably be rewritten to criminalize the really severe harms and impose less penalty on less-severe harms.
jsprogrammer 12y ago
People should not be punished soley to 'make an example' or for large-scale 'behavior modification'. Punishment should only be doled out for actual wrongdoings and only proportional to that individual's actions.
- anigbrowl 12y ago
  You're assuming that the CEOs cited in the example were not actually guilty.

suprgeek 12y ago

Politically connected & Rich people do not go to Jail for White-collar crimes. Think about the revolving door between Wall street and the Obama/Bush/Clinton administrations. Would you put your "buddy" in Jail if it meant that the political contributions would dry up and your opponent is going to get a war chest to fight you? Of course not! But an educator? These people cheated to keep their jobs and get (minor) pay raises - by definition they cannot fight back so the full weight of the Criminal Justice system (Racketeering Laws - typically used against Mafia figures) was used to toss some of them in Jail for upto 20 years! Let's face it - the American Criminal justice system basically preys on those least able to protect themselves from its abuses.

MaysonL 12y ago
Charles Keating was fairly well connected: remember the "Keating Five"? (US Senators who tried to influence regulators to go easy on Keating) He spent over four years in federal prison after being convicted of white collar crimes.

xmlblog 12y ago

It's called money.

jrockway 12y ago

Privileged Wall St. firms can afford better lawyers than schoolteachers in Atlanta? I had no idea...

crimsonalucard 12y ago

Black people get shot up by police, white people don't. What's up?

tzs 12y ago
White people get shot by police. You have to look to find the cases, though, because they don't generally make the national news. Here are a few. http://wreg.com/2014/11/25/salt-lake-cop-cleared-in-shooting-of-unarmed-white-man/ http://wreg.com/2014/11/25/salt-lake-cop-cleared-in-shooting... http://wreg.com/2015/04/22/family-of-unarmed-white-man-killed-by-police-to-be-paid-3-million/ http://wreg.com/2015/04/22/family-of-unarmed-white-man-kille... http://www.washingtontimes.com/news/2014/nov/27/white-teen-gilbert-collar-killed-by-black-cop-trev/?page=all http://www.washingtontimes.com/news/2014/nov/27/white-teen-g... In fact, more white people than black people are shot by police in the US. The rate for blacks getting shot is higher, but not the number.
- kakkou 11y ago
  Yet these stories don't make it onto the national news? They aren't plastered all over CNN? Where are the riots for these deaths?
tsotha 12y ago
What's up is it's national news when a black person gets shot by a white cop, and when it's a white person taking the bullet the story stays on the local crime blotter.
- dragonwriter 12y ago
  Its national news when unarmed people are shoot by cops and eyewitness reports or other early evidence suggests there is no good cause for the shooting, which for some reason happens more often when white cops shoot black people than any other combination.
  - tsotha 12y ago

tomohawk 12y ago

I would hope that adults entrusted with the care of our children and betraying that trust would be punished much more severely than wall streeters engaged in some sort of shenanigans.

jgoewert 12y ago
I would hope that adults entrusted with the care of our children would be paid more to get the top talent the job requires. Even a 1% change in a students learning is an immeasurable sum of profit to an organization and someone who can eek that out should get the compensation due.

goldfeld 12y ago

What about those teaching cheaters?

heisenbit 12y ago

There is a huge cultural problem and the teachers and MBS scandals are just the tip of the iceberg. When it is acceptable that results count no matter what the means. When it is acceptable that results are measured by a single number. When conflicts of interest are ignored by regulators Then you get: - inflated grades - inflated assessments of property values but also: - inflated arrests by policeman chasing quotas instead of helping citizens (in other parts of the world police are reluctant to arrest people due to dislike of paperwork) - inflated claims by prosecutors turning a blind eye to weak evidence (in other parts of the world prosecutors don't fear for their own job) - inflated money printing - inflated tech stock valuations - prolonged ignorance of default risks - HFT Markets work but there is such a thing as externalized costs. Regulators have a duty to monitor and step in when the line is overstepped. If they don't the benefits accrue to the powerful who cheat and the cost are born by the powerless. It is a good thing that the "regulator" stepped in and stopped the teachers grade inflation. However the way the regulator did this here is another example of single minded black and white thinking. Just because the grade inflation problem is bad it does not mean one can fix it with a single blow of a heavy hammer. Fear of rare random enforcement actions will only intimidate the people but won't stop further crimes. Hard real life problems need well planned, consistently implemented and balanced measures.