Monday 19 April 2010

Going for Goldmans

A great and ‘gleeful’ feeding-frenzy on the Goldmans scandal over at Alpha- ville and elsewhere – and why not? The accusations get to the heart of one of the lasting critiques of capitalism: that few great fortunes are built without recourse to exploitation of dominant market positions or privileged information (‘monopoly’ and ‘insider trading’ are ugy words …)

So will prosecutions follow ? The lack of punitive actions
has been a feature of the Crisis– imprisoning Madoff, a mere con artist, hardly counts – in stark contrast to the readiness of the US authorities to lock up everyone in sight after the Enron debacle, and finish Andersens into the bargain. Safety in numbers ? It’s being suggested that there aren’t enough lawyers or courts in the land to go after them all, nor auditors to go around if another of the Big Boys were to be taken down..

That’s to miss the point. Making a salutary example of a small number of egregious CEO-level offenders will have most of the effect that’s wanted. And Fabulous Fabrice could do with the smile wiping off his face, while we're at it. Very few nice middle-class people went to spend any time in the cells at all, and every generation should have its sharp reminder.

And of course this might be quite popular. In Mid-Term Year …



CityUnslicker said...

The best thing will be that maybe the banks that got scammed, i.e. the failed ones, will start to sue the banks that did the scamming.

There is a good case that can be made that Goldmans and JP Morgan actively took down Bear Stearns and Lehman Bros.

Collateral damage accounted for many European banks, our own hubristic RBS included.

Steven_L said...

We need a good old fashioned inquisition Nick, that'd sort 'em out!