Friday, April 8, 2016

William K. Black — The Fourth Whistleblowers’ Lemons Award Goes to DOJ for Ignoring Citi’s Criminals

We could, of course, retire the Bank Whistleblowers United’s Lemons title – for ignoring or trivializing elite fraud – by awarding it permanently to the Department of Justice (DOJ). The current award is particularly close to our hearts because it involves DOJ ignoring the sworn testimony of one our founders, Richard Bowen. DOJ did not ignore Bowen’s testimony because it was discredited, but because it was proven accurate – and should have led to the indictment of Citigroup’s top leadership team.…
The Rubin gang again. Top Democratic donors. Is a Democratic administration going to prosecute them?

The problem is the double standard of justice. It's a destructive policy in the long run since it undermines the rule of law by degrading respect for law and authority to enforce the law.

BTW, there is an interesting comparison here with Putin's alleged corruption. I was listening to NPR yesterday. Some ordinary Russians were being interviewed by the Panama papers and the allegations of corruption centering on Putin. The answers were revealing. 

People objected to elite corruption but they gave Putin a pass. As one old "babushka" (grandmother) put it, Putin has the hardest job in the country and he works harder than anyone. Therefore, he should live the best. The business and financial elite did not get the same pass because people perceived them as earning disproportionally more than they contributed to society.

Americans seem to have the opposite view. Business and financial elites are viewed as rewarded meritocratic ally, whereas government is regarded as parasitical. Just the opposite of Russia. 

It's the difference between a liberal state and an authoritarian one. Liberals look at authoritarians as unjust, and authoritarians view liberals as such. Two opposing points of view.

This is problem for US foreign policy based on the assumption that humans are naturally liberal and if a government is overthrown and free elections implemented, the outcome will be spontaneous natural order, which is inherently liberal. It's an erroneous assumption, which has been disconfirmed in experience. The result is not spontaneous natural order but chaos.

That was Patin's meaning in his rhetorical question, Do you realize what you have done?

New Economic Perspectives
The Fourth Whistleblowers’ Lemons Award Goes to DOJ for Ignoring Citi’s Criminals
William K. Black | Associate Professor of Economics and Law, UMKC

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