|It's not nothing, say critics, but the U.S. government's announced $16.65 billion settlement with Bank of America announced on Thursday—so far the largest associated with the Wall Street-fueled mortgage malpractice that led to the 2008 financial meltdown—is more stage-acting than justice and more business-as-usual than real punishment.
Presented to the public as a victory for the Justice Department who negotiated the deal on behalf of the government, details of the BofA settlement—as with previous high-profile agreements with Citibank and JPMorgan—offer a clear view of how large banks have avoided responsibility for the behavior that sent the global economy into a tailspin just six years ago. Much of the money—as much as $7 billion of it—is not paid in cash as a fine, but is instead included as "soft money" in which banks are credited for writing down existing mortgages. Other large portions of the settlement are allowed to serve as business expenses which allows the banks to exploit them as tax write-offs.
Speaking with The New York Times about the settlement, Phineas Baxandall, an analyst with the public advocacy group U.S. PIRG, said, “The American public is expecting the Justice Department to hold the banks accountable for its misdeeds in the mortgage meltdown. But these tax write-offs shift the burden back onto taxpayers and send the wrong message by treating parts of the settlement as an ordinary business expense.” […]
Critics of both the banks and the government's effort to go after them in the wake of the crisis have repeatedly said that criminal prosecutions--including the threat of prison sentences for individual bankers and executives--would be the strongest and best response to activities that have unleashed so significant and widespread pain across society.
Dean Baker, an economist and director of the progressive Center for Economic & Policy Research, in a post this week titled, Prosecutors Could Send Bankers to Jail, argued: "Knowingly packaging and selling fraudulent mortgages is fraud. It is a serious crime that could be punished by years in jail. The risk of jail time is likely to discourage bankers from engaging in this sort of behavior." Absent such a threat, Baker suggests, there is little to dissuade these banks, and those who work for them and make decisions, from acting differently.
Blast from the Past. At Daily Kos on this date in 2008—Big Business Goes After Unions to Defeat Democrats:
|As we all know, this November brings major opportunities for Senate pick-ups. And if we get enough Democrats in the Senate, there's a lot of legislation we might be able to get passed that seemed like pipe dreams just two years ago. That's precisely one of the reasons some business groups will be fighting tooth and nail to prevent Democrats from picking up Senate seats.
The Employee Free Choice Act is one of the most important such bills -- and practically every competitive Senate race is being targeted by anti-union groups with millions of dollars in funding from undisclosed sources:
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