“absolutely out of control”

“I meet a lot of these people on Wall Street on a regular basis right now…I am going to put it very bluntly: I regard the moral environment as pathological. And I am talking about the human interactions . . . I’ve not seen anything like this, not felt it so palpably…They have no responsibility to pay taxes; they have no responsibility to their clients; they have no responsibility to people, to counterparties in transactions…They are tough, greedy, aggressive and feel absolutely out of control in a quite literal sense, and they have gamed the system to a remarkable extent.”

The above comes from a no-holds-barred talk Jeffrey Sachs gave that literally stunned the crowd at a recent conference focused on fixing the financial system.

There are many industry insiders and watchers who agree with Mr. Sachs that things are more disgusting than ever, thanks in part to the de facto guarantee that none of the surviving institutions post-crisis are going to be touchable for new offenses. The government has admitted as much with their brand new Too Big To Prosecute mentality. Yes, this exists, in recent congressional testimony from Eric Holder, US Attorney General, the following incredible comment was given a public airing (but then The Voice came on that night and we all forgot about it):

“I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if we do prosecute — if we do bring a criminal charge — it will have a negative impact on the national economy, perhaps even the world economy,” Mr. Holder told the Senate Judiciary Committee. “I think that is a function of the fact that some of these institutions have become too large.”

I see this attitude creeping back along with the fund flows and the major stock market averages. Everyone on The Street can feel it. The thing is, most people are someone’s payroll or are benefitting from the new Niagara Falls of legal and investment fees to some extent. They have no incentive to open up the way Jeffrey Sachs does here. The politicians on both sides are similarly silent, having taken in more than a quarter of a billion from The Street during the last election year.

Business as usual and the music’s playing once again – we’re all dancing.

Sources:

Influential economist says Wall Street’s full of ‘crooks’ (New York Post)

Realities Behind Prosecuting Big Banks (DealBook)

Read Also:

It would be hilarious if it weren’t so frightening. (TRB)