I read in the papers that lawyers face a really tough job market these days.
It makes me wonder: with the stimulus bill aimed at sectors like construction and healthcare, are we really doing enough for the lawyers?
I am, perhaps, the first to ask this question.
But I do so because there would be a great way to stimulate the job market for lawyers that would align with the public interest (please consider below the fold).
Now the economy is currently being held hostage by global financiers who drank a little too deeply of that old debunked ideology (i.e. Reaganism, which taught that you get something for nothing if you click your heels together three times and say "there's nothing like deregulation!"), and who then stayed out at the Predatory Lending / Collateralized Debt Obligation / Credit Default Swap casino a bit too late.
(After months of this hostage situation, prominent government officials seem to be showing Stockholm syndrome.)
One would think that - after pushing the global financial system to the edge of collapse, and spreading deep infection into the "real economy" of goods and services, resulting in tens of millions of layoffs globally - that these financiers might be a bit chastened.
One would think these financiers would be earnestly working to try to stabilize the financial system and to work with government officials to undo the damage.
One would think that they would recognize that their outsize compensation for the last decade was a direct artifact of a massive financial fraud - that they would recognize their "skills" are unexceptional and that they added no real value to the economy while they were destroying it (which is kind of axiomatic).
But one would be wrong.
On the presumption financiers would 1. recognize the devastation they've wrought, 2. would feel chastened, and 3. would act cooperatively, the government has been leaving a lot of them in place and focusing most of its energy on trying to solve the problems, leaving questions of assigning blame and criminal liability on the slow track.
But its looking increasingly obvious that our creative class of financiers (and boy were they creative!) is really getting in the way. From an OpEd in yesterday's NY Times by Simon Johnson and James Kwak:
The lesson of all this is that when insiders have broken a financial institution, the most direct remedy is to kick them out. Traders are hardly in short supply, and you don’t need to rely on the ones who made the toxic trades in the first place. Companies must always plan around the potential departure of even their star traders, or they are certain to fail. A.I.G. does not need to keep all of its traders, especially since it takes far fewer people to unwind a portfolio than to build it up.
[snip]
Any grain of truth in these arguments [that only the perpetrators can understand the complexity] must be weighed against the costs of allowing discredited insiders to manage institutions after they have blown them up. Even if the conclusion is that a few experts need to be retained, offering guaranteed bonuses to virtually the entire operation is hardly the way to achieve the desired results. We should not let people think that the best way to guarantee job security is to lose lots of money in a really complicated way.
Which brings me back to my modest proposal. The situation, in sum:
The labor market has too many idle lawyers, we have too many obstructive banksters.
Let's bring them together.
Why not create a new, temporary corps of special prosecutors, say 5,000, to ramp up the process of assigning appropriate blame? To avoid overwhelming the courts, we would also probably need a temporary judicial arm (maybe 400 judges with 7 year appointments) to process the huge volume of cases. The emphasis in the prosecutions should be on recovering personal assets from the banksters (from the top of the corruption chain-to-bottom) and returning those assets to the US treasury.
Managers under indictment would be required to step aside, and many others would leave to work on preparing their criminal defenses.
Those that stayed might be more cooperative.
And, to be sure, prosecutors should show some of the creativity of the bankers and look outside traditional financial industry regulation and securities law - e.g., consider statutes like RICO among their tools. There was surely a lot of organized illegal activity going on to create such a huge disaster. (Even after accounting for the previously criminal activity that Phil Gramm and friends legalized with the Commodity Futures Modernization Act.)
Perhaps in enabling legislation we could also add an additional category to the various sex offender registries around the country -- "Financial Fraudster".
We could call supporting state legislation in each state "Phil's Law." Every bankster convicted would be required to register.
That might slow them down in trying to cherry pick new fortunes out of the rubble they created.
Just a modest proposal.
What do you think?