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TV Review: The Untouchables

Last night I watched the Frontline documentary The Untouchables that I wrote about yesterday that explored the question of why, more than four years after the financial debacle involving widespread mortgage fraud, not a single high-level Wall Street executive has faced criminal prosecution. All that has happened is a bunch of very low-level people being charged and a series of civil prosecutions resulting in plea bargains in which some banks have paid fines that seem large but are puny compared to the scale of the fraud, and which the bank executives can simply write off as the cost of doing business while they continue to enrich themselves with high salaries and bonuses. The program covers some of the same ground as that excellent 2010 documentary Inside Job that I reviewed here

The film shows how people down in the trenches actually reading the mortgage applications knew that the whole structure was rotten to the core and warned those above them that huge numbers of mortgages were being issued based on wildly implausible information. The people at the top of the Wall Street banks knew it but sold this junk to their clients anyway, while reaping the profits. It was the collapse of this house of cards that precipitated the latest recession.

So why is it that no one at the top is even facing the threat of going to jail? Two people shown in the program illustrate the problem.

One of them is Robert Rubin. He symbolizes everything that is corrupt about the system. He has a high-level Democratic connections, having served from 1995 to 1999 as Bill Clinton’s Treasury Secretary where, among other Wall Street-friendly measures, he was instrumental in getting rid of the Glass-Steagall Act that placed a wall between retail and investment banks. That removal was what resulted in banks acting like casinos using other people’s money and contributed mightily to the crisis. Before that government stint he was head of Goldman Sachs and after that he went to Citigroup, two institutions at the heart of the scandal. He epitomizes the cozy relationship between the government and Wall Street and the revolving door through which they use their government positions and connections to benefit banks and themselves.

The other person is Lanny Breuer, the head of the criminal division of the Justice department in the Obama administration, second to attorney General Eric Holder, whose job it was to prosecute fraud but whose main talent seemed to be finding reasons why he could not prosecute high-level Wall Street executives. The day after the Frontline program was broadcast, it was announced that he was resigning.

But don’t cry for him. As Buzzflash observes, he too is a heavy user of the government-Wall Street revolving door. Before coming to the justice department he and Holder worked in the high-powered law firm of Covington & Burling which has several big investment banks as clients. You can be sure that he (and Holder) will return to that or another similar firm and reap the gratitude of those Wall Street firms and executives that he found reasons not to prosecute. They look after their own.

Rubin and Breuer are just two of the many people who use government to benefit themselves and their private sector employers. They are the poster children of the government-Wall Street complex.

Comments

  1. says

    I can see ripping off 5, 10 million bucks and then hitting the beach or spending the rest of my life going to concerts and eating fine food. But how much do these @$*!(*$!&(! need?

  2. Leander says

    It’s stuff like this that has caused my gradual shift to the left of the political spectrum to accelerate to the point where I think I might have become a radical. There is no justice in this world! The few people fighting for “the right things” are either ignored or actively vilified…
    On some days I think it would just be better to burn the whole system down than to try to salvage it.

  3. Mano Singham says

    I have wondered about that myself. I think that for the very rich, money becomes a way of keeping score more than satisfying actual needs, so the one who earns more is the ‘winner’.

    It used to be that corporate CEO pay was not widely available but was suspected to be high. As a result of financial reforms in the mid-20th century, the compensation of their top executives became public knowledge. The idea behind this, apparently, was to shame them into getting less. The actual consequence was that CEOs demanded from their boards that they be paid more than their rivals and executive compensations started skyrocketing as they leapfrogged over one another.

  4. says

    It’s really bizzare to me. So the idea is to die with a humongous bank balance, which you then shovel (tax-deferred) onto your children, ensuring that they grow up to be useless, stunted assholes? I suppose it’s a form of “parenting” but, really, why?

  5. Mano Singham says

    The prime motive may not necessarily be to pass on to their children though they do do that. It may well be that they simply want to ‘win’, i.e., be the richest in their circle while alive. It is similar to guys who compete among their peers in sports or other things. It is a weird psychology when you are outside looking in.

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