The government has opened 20 criminal investigations into the TARP program. Bankers screwing people out of money? I never thought I’d see the day!
Snark aside, honestly, what else would you expect? It was a large amount of money being dispensed with in a short time in a period of national emergency; it’s very easy to take advantage of that sort of situation, hence the perennial popularity of war profiteering. This just illustrates something which should be pretty basic: absorbing the value-neutral (what a quainter age used to call “amoral”) utility-maximizing ethos of modern economics turns you into a value-neutral utility-maximizer (what a quainter age used to call a “crook”). Obviously bankers inculcated in that belief system are going to rip off an essentially unlimited supply of public money. They obviously believed the government wouldn’t catch on (and I’m sure this round of investigations is the tip of the iceberg), and what else would stop them? Civic spirit in a crisis? If bankers had a civic spirit, they wouldn’t be bankers.
Possible solution? I’d say pick the bank that looks most corrupt, take the senior executives and board members and any traders implicated, and seize all of their assets. It’s pursuant to an ongoing criminal investigation, and is moreover the product of ill-gotten gains. This is called asset forfeiture, and we do it on a daily basis to drug dealers. Why not people who’ve done far more harm to the public? It requires no conviction, and could be done tomorrow. It’s all legal, and would send a strong message to the financial sectors that the government is not f*cking around. It’s also without question what law enforcement would do if the amount of money involved was several orders of magnitude smaller…so why not show we’re taking this seriously?
Okay, one more snark. The former foremost proponents of capitalism are now not only welfare wards, but welfare cheats.