Cleaning Some Of The Garbage Out Of Wall Street's Augean Stables

Jackie Speier is a freshman congresswoman from the mostly working class suburbs just south of San Francisco, Tom Lantos' old district. Last week she told the London Sunday Times, in a story about Joseph Cassano, former head of AIG's financial-products division in London, that he and his cronies "basically took people’s hard-earned money, gambled it and lost everything. And he must be held accountable for the dereliction of his duty, and for the havoc he’s wrought on America. I don’t think the American people will be content, nor will I, until we hear the click of the handcuffs on his wrists.” The Times writer laughed (or snickered) at her.

It was Rolling Stone writer Matt Taibbi who first helped me understand Cassano's role in the global financial meltdown and a few days ago he pointed out how wrongheaded it would be to just blame a few crooks like Cassano instead of the entire moral bankruptcy that pervades the Wall Street/GOP Greed Is Good ethos.

The problem is, at its roots, a profound collapse of morals on Wall Street that would have found its way to financial destruction using any available set of instruments and laws. We are talking about people who sold giant rafts of bullshit mortgages to pensions, who stuck municipalities, innocent taxpayers, with time-bombs of subprime debt. And not just one trader here and there, but thousands of them, with the sober approval of the highest level executives in the biggest firms. On its most basic level what these people did is rip off huge institutional investors-- old people, taxpayers, you and me-- by finding ways to game the system and trick the big institutional fund managers into buying what they thought were safe investments, but were actually financial lemons that could barely make it out of the lot.

...These Wall Street players are enormously compensated, which supposedly means that society highly values their work and is willing to pay them a premium to do it. Having been given that kind of responsibility and trust, these assholes should not then force us to police them as tightly as we police those who we expect to steal from us, like third-rate car salesmen, telemarketers, hookers and three-card monty dealers. With that kind of money they should be setting an example. We are paying them as though they are leaders of society, so they should lead. Instead they ripped us off like common criminals. I mean, the level of morals here is astonishing. In my entire life I’ve never met a drug dealer who would even think about trying half the shit that banks like Goldman Sachs and Citibank pulled during these years.

Like Speier I would like to see them all arrested, tried, and lined up against a wall and shot handcuffed. I doubt any of that's likely to happen but I was still happy to see the crooked Republican bankster Bush saddled AIG with on his way out, Edward Liddy, announce his departure this weekend. AIG and Liddy are being sued by policyholders for "improperly diverting money from its insurance units, exposing policyholders to the risk that their claims might never be paid." Three of the companies board members have decided not to seek re-election next month, Stephen F. Bollenbach, a former chairman and chief executive of Hilton Hotels; Martin S. Feldstein, a Harvard economics professor; and James F. Orr III, chairman of the Rockefeller Foundation.

Wall Street needs a lot more cleansing that a few crooked banksters and board members. More good news came from Morgan Stanley yesterday when they announced that they had fired its head of prime brokerage, Stu Hendel, who ran the bank’s hedge fund service business for the past 3 years. I'd say another hundred or so announcements like these two and we'd be off to a good start.