I'm guessing one of my neighbors hasn't yet mastered the fine art of microwave popcorn.
Last night around 8 we heard a crash and looked out to see a 2-car wreck right outside our terrace. I called 911 to report no injuries, but that cops and a wrecker were needed. Within seconds we had 3 fire trucks, 3 cops, and an ambulance swarming all over us. Turns out they were already on their way to a fire call at our apartments, and the fender bender was just a bonus.
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It seems the new "in" major at university business schools is Grand Larceny. Management, Marketing, Accounting, and all the rest are now so blase. Now "GL" is where it's at.
It has become a daily occurrence for one company or another to admit to doing something illegal and being fined millions....BILLIONS of dollars, even. Yesterday SAC Capital was fined $1.8B for insider trading, in addition to the $616M they were fined earlier in the year.
BP was recently tapped for $4B, GlaxoSmithKline was fined $3B, and even Johnson & Johnson, the baby powder maker (and pharmaceutical company) was fined $2.2B for urging doctors to prescribe some of their meds to treat ailments the FDA hadn't approved them for. And of course JPMorgan Chase has agreed to a $13B settlement related to mortgage fraud, and billions more have been paid for interest rate rigging by all the world's major banks. And there are plenty more I could mention, too, but I don't want to write all day.
I'm a staunch capitalists. "Profit" is a good word. But damn, people, doesn't anyone know how to make money without ripping someone else off in the process? Seems to me we'll continue to have problems like these until we start playing hardball with them.
Let's turn some pinstripes into jail stripes. And/or maybe shutting down and breaking up companies who are serial offenders. Talk about some pissed off stockholders! Maybe then they won't be so insistent on demanding every last penny profit they can by any means possible, legal or not.
Only when the crime costs more than the potential profit will Management be a more desirable degree than Grand Larceny.
S
Scott,
ReplyDeleteDo they ever say where all the money from these fines goes? Do they make restitution to people who were harmed, or does it just go...you know...somewhere? Do I now pay less in taxes? It seems the money goes from GL crooks to politicians...kind of a wash for us.
Excellent point, Big Joe. Maybe we could put them all (crooked politicians AND business people) in the same cell block. Talk about a fun reality show!
DeleteI think if these companies didn't have all these outrageous bonuses for their executives there'd be less of this because execs wouldn't need to fudge numbers to meet quotas so they can get bigger bonuses. The whole stock market system creates this need to create more and more profit and growth to the point where it becomes unsustainable.
ReplyDeleteHere is a quote from Bill Moyers' webpage that reinforces your point that more of these crooks need to be jailed:
ReplyDelete"September 15th marked the fifth anniversary of Wall Street giant Lehman Brothers going into bankruptcy, which precipitated the Great Recession that lingers on today – it remains the largest bankruptcy in U.S. history. To date, no executives have faced prosecution for the widespread mortgage fraud that fueled the bubble." (Joshua Holland; September 17, 2013)
I think these fines as just the price of doing business for these companies. Make the fine big enough to hurt and wipe out the profits from breaking the law and we'll see change. But it's unlikely with the Congress.
ReplyDeleteI loved the headline in the New York Post: HEDGE HOG SAC'D!
ReplyDeleteIt appears nothing was learned by those who can make a change. This looks like 1982, 1999 and 2007 rolled into one. I was shocked to see my bank was heavy invested in D. The phony bets on a kittens color pattern to get a big return from others who missed the bet. Why did not Washington make that against the law?
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