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Chapter
1 (an excerpt)
WHERE
WE ARE NOW
MANY
BOOKS HAVE ALREADY been written about the financial crisis, but there are two
reasons why I decided that it was still important to write this one.
The
first reason is that the bad guys got away with it, and there has been
stunningly little public debate about this fact. When I received the Oscar
for best documentary in 2011, I said: “Three years after a horrific
financial crisis caused by massive fraud, not a single financial executive
has gone to jail. And that’s wrong.” When asked afterward about
the absence of prosecutions, senior Obama administration officials gave
evasive nonanswers, suggesting that nothing illegal
occurred, or that investigations were continuing. None of the major
Republican presidential candidates have raised the issue at all.
As of
early 2012 there has still not been a single criminal prosecution of a senior
financial executive related to the financial crisis. Nor has there been any
serious attempt by the federal government to use civil suits, asset seizures,
or restraining orders to extract fines or restitution from the people
responsible for plunging the world economy into recession. This is not
because we have no evidence of criminal behavior. Since the release of my
film, a large amount of new material has emerged, especially from private lawsuits, that reveals, through e-mail trails and other evidence,
that many bankers, including senior management, knew exactly what was going
on, and that it was highly fraudulent.
But
even leaving this crisis aside, there is now abundant evidence of widespread,
unpunished criminal behavior in the financial sector. Later in this book, I
go through the list of what we already know, which is a lot. In addition to
the behavior that caused the crisis, major U.S. and European banks have been
caught assisting corporate fraud by Enron and others, laundering money for
drug cartels and the Iranian military, aiding tax evasion, hiding the assets
of corrupt dictators, colluding in order to fix prices, and committing many
forms of financial fraud. The evidence is now overwhelming that over the last
thirty years, the U.S. financial sector has become a rogue industry. As its
wealth and power grew, it subverted America’s political system
(including both political parties), government, and academic institutions in
order to free itself from regulation. As deregulation progressed, the
industry became ever more unethical and dangerous, producing ever larger
financial crises and ever more blatant criminality. Since the 1990s, its
power has been sufficient to insulate bankers not only from effective
regulation but even from criminal law enforcement. The financial sector is
now a parasitic and destabilizing industry that constitutes a major drag on
American economic growth.
This
means that criminal prosecution is not just a matter of vengeance or even
justice. Real punishment for large-scale financial criminality is a vital
element of the financial re-regulation that is, in turn, essential to
America’s (and the world’s) economic health and stability.
Regulation is nice, but the threat of prison focuses the mind. A noted
expert, the gangster Al Capone, once said, “You can get much further in
life with a kind word and a gun than with a kind word alone.” If
financial executives know that they will go to jail if they commit major
frauds that endanger the world economy, and that their illegal wealth will be
confiscated, then they will be considerably less likely to commit such frauds
and cause global financial crises. So one reason for writing this book is to
lay out in painfully clear detail the case for criminal prosecutions. In this
book, I demonstrate that much of the behavior underlying the bubble and
crisis was quite literally criminal, and that the lack of prosecution is
nearly as outrageous as the financial sector’s original conduct.
The
second reason that I decided to write this book is that the rise of predatory
finance is both a cause and a symptom of an even broader, and even more
disturbing, change in America’s economy and political system. The
financial sector is the core of a new oligarchy that has risen to power over
the past thirty years, and that has profoundly changed American life. The
later chapters of this book are devoted to analyzing how this happened and
what it means.
From: Predator
Nation: Corporate Criminals, Political Corruption, and the Hijacking of
America by Charles H. Ferguson
![](http://www.24hgold.com/24hpmdata/articles/2012/07/img/20120718ELS117.jpg)
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