Monday, September 8, 2014

Finally, Wall Street gets put on trial: We can still hold the 0.1 percent responsible for tanking the economy



SUNDAY, SEP 7, 2014 04:00 AM PDT

Finally, Wall Street gets put on trial: We can still hold the 0.1 percent responsible for tanking the economy

Too Big To Fail bailouts let them get away with it. The amazing result of California fraud trial could change that

THOMAS FRANK

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Of course, the result in the Sacramento case might knock those beautiful plans off the track. Up till now it has been covered as a kind of man-bites-dog story, because “an acquittal in Sacramento federal court is rare,” as the Bee put it. But maybe, in the weeks to come, acquittals like this will become more common. Already, says John Balazs, a member of the defense team, he has been contacted by other attorneys arguing similar cases. Maybe lawyers all over the country will soon be reminding juries that a borrower’s alleged misstatements can’t have been “material” to a lender if the lender was a control fraud dealing in liar’s loans. Maybe one day the courts of this land will acknowledge what the public has known for years: That the fraud that wrecked the world actually happened in the offices of the shadow banks and the Wall Street investment firms.
It all depends, says Toni White, one of the defense attorneys in Sacramento, on “if the judge lets it in.”
“This is what happens when defendants get a fair trial,” she continues. “Where are the CEO’s? Why aren’t they here?”
It’s a good question. The government’s near-complete failure to prosecute the true villains of the Great Recession will surely go down as the Obama administration’s grandest disappointment. It has convinced a generation that the fix is always in, that the government patrols some neighborhoods with a finger on the trigger, showing no mercy ever, but that in other precincts a kinder, gentler law prevails. It gets worse when people realize that the officers who ran the subprime lenders before the disaster are back in the mortgage business today. Taken as a whole, the crisis and its aftermath have given the lie to the president’s oft-repeated faith in meritocracy. The people see what’s happened and they get it: there is no meritocracy without accountability. What we’ve got instead is a society dominated by thieves.
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