We’re so used to financial shenanigans that we’ve reached the “So what else is new?” stage. From “The Spreading Scourge of Corporate Corruption,” Eduardo Porter, NYT:
“Perhaps the most surprising aspect of the Libor scandal is how familiar it seems. Sure, for some of the world’s leading banks to try to manipulate one of the most important interest rates in contemporary finance is clearly egregious. but is that worse than packaging billions of dollars worth of dubious mortgages into a bond and having it stamped with a Triple-A rating to sell to some dupe down the road while betting against it? Or how about forging documents on an industrial scale to foreclose fraudulently on countless homeowners?
“The misconduct of the financial industry no longer surprises most Americans. Only about one in five has much trust in banks, according to Gallup polls, about half the level in 2007. … Sixty-two percent of Americans believe corruption is widespread across corporate America.
“The inexorable rise of income inequality is also likely to encourage fraud, fostering resentment and undermining trust in capitalism’s institutions and rules. Economic research shows that participants in contests in which the winner takes all are much more likely to cheat. And the Unites States is becoming a winner-takes-all economy.”
“In 1989, the chief executives of the seven biggest banks in the country made about 100 times the income of the typical American household, on average. On the eve of the crisis, in 2007, they made more than 500 times the median.
“Economists know there is a point after which more lending stops helping and starts hurting growth. One study puts it at about 110 percent of gross domestic product. On the eve of the crisis, credit to the private sector in the United States reached 213 percent of G.D.P., up from 96 percent in 1982. And all we got was a mass of busted residential mortgages.”
Eduardo Porter, “The Modest Worth to Society of Those Big Banks,” NYT
Asked about the Occupy protestors, Mitt told CBS in Charlotte, NC that “a lot of young folks haven’t had the opportunity to really understand…why we have banks and what banks do.”
I think what the Occupy people, and the American people, don’t understand is why the banks are still doing the same crap that caused the meltdown — like J. P. Morgan’s $2 billion loss in credit default swaps.