So, since I’ve been railing here about how this administration would not prosecute any Wall Street firms over the various frauds committed during the recent (and continuing) financial meltdown, thought it only fair to point out an exception, a first. I’ve long held that there’s no chance of prosecution because, in a truly fascinating and amazing coincidence, the financial enforcement arms of the government are staffed and lead by people who used to work for Wall Street firms and generally intend to work for Wall Street firms once they’ve put in their 2-3 years of public service making sure nothing untoward happens to their once and future employers.
Well, here’s some news: the financial instrument rating arm of S&P is reportedly getting sued. Let me offer one well contained huzzah. This could be a step in the right direction. I kind of doubt it.
Now, maybe this is the first small step in a bigger plan – maybe the prosecutors have explained to some mid-level lackey at S&P that he could be rooming with Bubba and Vinnie the Neck for the next 10 years, unless he cared to share with them the names of the people involved in making sure that S&P didn’t look too hard at those mortgage-backed securities, but instead gave them the AAA-rating Goldman and others needed them to have in order to sell them to unsuspecting retirement funds. Because there were dozens of people in those rating agencies that knew MBS were some seriously bad stuff well before they started to stink – math & logic insist this is so.
Then, the prosecutors could have a remarkably similar discussion with the people that lackey fingered. Lather, rinse, repeat, until you’re having a little talk with senior execs at Goldman – and at Treasury and the SEC, and maybe (let’s dream a little here) with a few Congressmen. Then – when Wall Street Presidents and CEO are doing time and having their assets seized, Treasury and SEC heads are rolling, and (dreaming again) Barney Frank has his retirement plans changed to live off our tax dollars in an entirely different and more confined way – THEN I’ll admit I was too cynical.
Until then, the more likely scenario is: The government prosecutors are under enormous political pressure to DO SOMETHING about all these Wall Street fat cats having worked the system in order to not just stay out of jail, but to make off with enough tax-payer funded plunder to make Black Beard blush. So, who can they go after, that calms the little people without really bothering the big boys? How about the rating agencies? Yea, because OF COURSE S&P wasn’t under ANY PRESSURE AT ALL to give Goldman and others the ratings on MBS that Goldman and others needed to pull off their scam – it’s not like Goldman pays them for the ratings, after all.
Oh, wait – they do.
So, prosecutors can bag S&P, hit them with a billion-dollar fine, nobody does any time, and everybody else – the real perps from Wall Street to DC – skate, to fund another reelection campaign another day.