February 1, 2013

Senators Demand that Banks Be Punished – but Not the Fed

Senators Call Out Attorney General For Treating Banks Like They Are "Too Big To Jail" Like many Americans, Senators Charles Grassley (Iowa) and Sherrod Brown (Ohio) think federal investigators have given banks a mere slap on the wrists for their part in the economic collapse and other misdeeds. So in a letter to U.S. Attorney General Eric Holder, the pair wonder if banks are being viewed by the DOJ as "too big to jail." In the letter, the senators say that even though banks have already paid out billions in civil and regulatory penalties, these settlements are nothing compared to the scope of the damage done, the money banks made before the economy went kaplooey, and the taxpayer investment in the TARP bail-outs. "Unfortunately, many of the settlements between large financial institutions and the federal government involve penalties that are disproportionately low, both in relation to the profits which resulted from those wrongful actions as well as in relation to the costs imposed upon consumers, investors, and the market," reads the letter. – Consumerist

Dominant Social Theme: Bring these banksters to justice.

Free-Market Analysis: But not the good, gray men of central banking.

We are not surprised. The power elites are deathly frightened, in our view, that their control over central banks is in jeopardy. They will sacrifice the entire financial infrastructure to make sure central banks are not attacked.

They are trying to do this any way they can.

They are trying to set up neo-Pecora hearings to focus on Wall Street and the securities industry in general. There will be similar attacks in Europe and Britain. Maybe in China and Japan too, who knows? Search the 'Net for "Neo-Pecora" and "Daily Bell" for more.

Back in the 1930s, Franklin Delano Roosevelt brought in the cigar-chomping Ferdinand Pecora to regulate Wall Street and make it safe for the consumer.

Eighty years later, consumers are right back where they started – or ended.

In the 1930s, after the Great Crash of 1929, savings were wrecked, retirements ruined and people decided they didn't trust the stock market.

The Pecora hearings were seemingly an elite psy-op intended to further establish the legitimacy of regulation generally and the idea that specific regulations could substitute for "market failure."
Of course, the failure of the markets was evidently and obviously because of their artificially induced centralization. In fact, it was only after a precipitating event – and at least seven decades after the Civil War – that the power elites could assert their control over the blossoming securities industry.
The US securities industry, specifically, was never meant to be – or not in its current size and shape. It is like an elephant standing in the intersection of major capital flows. The entirety of US industrial securitization has been shaped to travel past the behemoth which needs merely to extend its trunk to feed.

Every law and regulation passed merely contributes to further centralization and additional control. A very few people at the top of the pyramid can see the entire picture and pull the levers as necessary. The levers actually are pulled at the behest of the Federal Reserve, which is the main vehicle of control for the power elite itself.

What ought to be clear to people who want to understand more fully what is taking place is that the top elites are perfectly willing to sacrifice the mechanical device that distributes the Fed super money. What they are NOT willing to do is sacrifice the source of that money – the Fed itself.
The system has been built to fail and thus further centralize money power in the hands of the few. In order to confuse an increasingly maddened public, the powers-that-be created the dominant social theme of government regulatory competence.

The idea was that central banks and governments – being responsible parties – would rule over the private sector, which was inherently disorganized and not to be trusted as it was prone to "market failure."

This is the meme that has been operative for the past century or so. But it is failing now because it has been seen (over and over with increasing emphasis) that regulation doesn't work. Thus the powers-that-be are reduced to the argument that regulations on the books were not adequately enforced and that more and different regulation is called for.

In other words, a tougher and better cop on the beat is necessary – and he or she must be equipped with more powerful weapons as necessary. Sound familiar? Here's some more from the article above:

Grassley and Brown voice their concerns that prosecutors' treatment of the bank has left the impression with Americans that "Wall Street banks enjoy a favored status, in statute and in enforcement policy." [They] then proceed to ask AG Holder the following:

1. Has the Justice Department designated certain institutions whose failure could jeopardize the stability of the financial markets and are thus, "too big to jail"? If so, please name them.
2. Has the Justice Dept. ever failed to bring a prosecution against an institution due to concern that their failure could jeopardize financial markets?
3. Are there entities the Justice Dept. has entered into settlements with, in which the amount of the settlement reflected a concern that markets could be impacted by such a settlement? If so, for which entities?

The letter also asks Holder to identify all outside experts consulted by the DOJ with regard to any prosecutorial decisions involving a financial institution with more than $1 billion in assets.
... "Our markets will only function efficiently if participants believe that all laws will be enforced consistently, and that violators will be punished to the full extent of the law," write the senators. "There should not be one set of rules that apply to Wall Street and another set for the rest of us."

This last paragraph is most notable because of the number of assumptions involved. First of all, it assumes that laws CAN be enforced consistently. Second, it demands that violators be punished to the "full extent" of the law – which seems to be an attempt to seize control of the process from the judiciary. Finally, it argues that there should not be two different "sets of rules."

We have long argued that the meme of Western "justice" will be the last elite meme to fall in this era of the Internet Reformation. But it WILL fall, and it is actually happening, in our view. We see signs.
Kim Dotcom, under attack for copyright violations, has found a sympathetic public hearing; most recently gun confiscation has aroused such a furor in the US that elites who want to see citizens disarmed in that great country have backed away.

Yes, this is an Internet related phenomenon, in our view. Of course, it is one that will occur on a macro scale and will not, ultimately, be available for scrutiny on an individual basis.

Laws, people will decide, cannot be enforced consistently because they are inherently unjust.

Demanding that violators be punished to the full extent of the law is also likely useless because it is merely enforcing the meme that modern Western law is enforceable to begin with. It is not. At this point, given the number of laws and often their ludicrousness, the "law" is entirely discretionary and is used as a weapon to silence certain individuals and groups.

The Senators' letter also gets the "rules" wrong. There are not "different rules for rich and poor." There are different rules for those who support the government (and the controlling elites by extension) and those who do not.

Many people in the West are involved with various kinds of crimes today. A law, at this point, is whatever "officials" say it is. Because there are so many laws, enforcement has the luxury of enforcing what it wishes to enforce.

As a result, law enforcement in the West tends to focus on harassment style enforcement – arrests for drunk driving or drug use – and also on various kinds of crime, including white-collar crime that poses a challenge to the state itself.

This is surely why little government crime is prosecuted. This is, in fact, why Congress itself can break laws with impunity and excuse itself from laws aimed at the general populace. Only certain kinds of white-collar crime are prosecuted. "Criminals" often escape punishment.

The current zeal to catch and jail Wall Streeters performs three functions, however. It shows the general populace that a certain "criminal" element is being prosecuted. It removes central banking from the line of fire. Finally, it WEAKENS the market itself – and financial transactions – by bringing yet more of them under the watchful eye of government control. As the elites control government, this last point is especially beneficial.

Conclusion: If it seems too good to be true that the US Congress is insisting that the "public" receive deserved justice, that's because it probably is.

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