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Jon Talton

Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.

September 25, 2014 at 10:19 AM

The Touchables: Holder and the rackets

Wall Street must be relieved by the resignation of Attorney General Eric Holder, its fierce and unstoppable nemesis.

From their prison cells, Kerry Killinger of Washington Mutual, Lloyd Blankfein of Goldman Sachs, Sandy Weill of Citigroup, Stan O’Neal of Merrill Lynch, Hank Greenberg of AIG, Angelo Mozilo of Countrywide, Dick Fuld of Lehman Brothers, credit default swap-meister Joe Cassano, Ian McCarthy whose Beazer Homes violated mortgage regulations with its aggressive tactics, Frank Raines of Fannie Mae, Kathleen Corbet of Standard & Poor’s…and many more.

As they swab floors, serve slop in the penitentiary cafeteria and learn skills for the minimum-wage jobs that await them on the outside, they must be cursing Holder still. Even more so because the “clawbacks” he insisted upon ensured that these executives had to repay the hundreds of millions in compensation they received while setting the table for disaster. Mansions, yachts and expensive cars and jewelry — all sold at auctions.

“If a poor kid had robbed a liquor store of $10, he’d be serving time,” Holder said. “These people robbed the American people and economy of billions. They robbed the American people of hope.”

Holder insisted on applying the rule of law to the financial elite that brought down the economy, impoverishing millions of Americans and costing a trillion or more in lost output. This despite the “banksters,” as he called them, reviving a phrase from the Great Depression, owning the U.S. Congress and putting relentless pressure on President Obama to stop this new Untouchable.

Importantly, Holder and his U.S. Attorneys not only brought successful criminal prosecutions, he also explained to the American people how the hustles had been carried out and how the time bomb had been set that would bring the world economy to the brink of a second great depression. As a result, figures such as Alan Greenspan, Bill Clinton, Phil Gramm, Robert Rubin and former SEC Chairman Chris Cox are disgraced. Congress passed a new Glass-Steagall Act to prevent the criminal rackets that grew out of deregulation.

“Never again will profits be privatized while losses are socialized,” the Attorney General said. “Never again will the public good be held hostage by a gang of oligarchs.”

When Holder brought suit against JPMorgan Chase and Bank of America under the Sherman Antitrust Act, all the Too Big To Fail Banks entered consent decrees to voluntarily break themselves up. TBTF was over, as was the financialization that cost so many American jobs. After Holder, banking became a boring business again, lending money to help create and expand job-creating enterprises, and serving individual customers with integrity.

…Oh, wait.

None of that happened.

They got away with it. Holder’s Justice Department at best extracted wrist-slap fines that are the corporate equivalent of a rich person flashing a wad of cash when being stopped for speeding…and the officer takes the money and lets the perp go.

Next up: Revolving Door Watch. Where will General Holder end up on Wall Street, in a highly paid sinecure? Eric Cantor and a host of others will be waiting for him. Or maybe it will be K Street.

The saddest lesson of Holder’s tenure was that there is indeed a different set of laws for the wealthy and well-connected. The buck stops with President Obama. A “liberal leftist socialist”? No, another neo-liberal status quo leader, enabler of the “quiet coup,” with an even worse record than his predecessor, who oversaw criminal prosecutions of the heads of Enron, HealthSouth, Tyco, etc.


Comments | More in Business scandals | Topics: Eric Holder, Washington Mutual


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