We’re coming up on the 10th anniversary of the Lehman Brothers collapse, which heralded a financial crisis so deep that this racist country actually turned to a black man to fix it. As we come up on the anniversary, this seems like a good time to point out that: none of the thousands of rich assholes more or less responsible for the financial crisis were ever even prosecuted, much less jailed, the laws erected to protect Americans from a similar crisis have largely been eviscerated, and in fact the rich assholes have gotten together to prop up an openly bigoted white supremacist so he can transfer wealth from the government directly into their pockets.
The financial crisis broke our economy, but our inability and unwillingness to hold financial frauds and hucksters to account is going to break our republic. Donald Trump is not the cause of anything. He is the result of American racism. He is the result of American misogyny. And he is the result of smash and grab capitalism that will trade it all for a little more. Trump’s constituency is entirely made up of people who are racist, people who are sexist, and people who are totally cool with racism and sexism if it helps them make a freaking buck.
That is the context that I bring to the table when I read Shane Ferro’s article: “America’s Problem Is Not Too Few White-Collar Prosecutions.”
Her argument is, basically: we live in an over-criminalized society –> we mainly catch low-level financial criminals –> we don’t catch high-level people because their crimes are baked into the system and called “not crimes” –> we need more taxes and less jail time.
It’s possible to agree with all of Ferro’s presumptions, and still arrive at a radically different conclusion. Watch.
* Yes, we live in an overly prosecutorial country… FOR POOR PEOPLE. We know this because every time an upper-middle-class or rich person gets treated like a poor person, we see a RAFT of articles like this bemoaning the aggressive tactics of law enforcement. WELCOME TO THE PARTY, assholes. This goes to one of my overarching points in life: white people could not handle being treated like non-white people for TEN DAYS before crying uncle and demanding systemic change. But if you are going to cry about the gestapo tactics used against Michael Cohen and Paul Manafort, you need to START by addressing the far greater plight of the poor and politically unconnected. Put another way, I’m fresh out of f***s to give about the government’s strong armed tactics with financial criminals when any other type of criminal can be choked to death in broad daylight by the NYPD. You’re going to talk to me about over-criminalization? LET’S GET SOME TRIAGE UP IN HERE FIRST. Ferro wants me to care about some plastic straws when the EARTH IS BAKING in carbon dioxide emissions. Priorities, people.
* Yes, we mainly catch low-level, desperate financial criminals, because they are the dumbest and easiest to catch. They are weak and don’t have political and social connections to help grease the wheels on their illegalities. Like any predator, law enforcement naturally goes after the weakest, slowest members who can be separated from the herd. Look how hard it’s been to “catch” Trump. The man is both dirty and sloppy, but look at how many people have to be caught, charged, and flipped to even get close to him. As I wrote before, in a normal criminal fraud scheme, Allen Weisselberg would be the target. Law enforcement is simply not incentivized to go all the way to the top. Our (corrupt) system favors nabbing the functionaries as opposed to holding the boss accountable. We’ve set it up that way. We could set it up a different way if there was any will to actually prosecute rich people.
* Yes, we need more taxes. Except the oligarchs we’re after would probably literally rather risk harsher jail sentences than pay more taxes. They will fight to the last against taxes. More on this later.
* Finally, yes, most of the “crimes” we’d want to prosecute people for are not actually “crimes.” With the help of lobbyists and completely useless politicians, white-collar criminals have been able to legislate most of their crimes as “not-crime,” so they can continue to conduct criminal business with impunity. This is a bug, not a feature. And it is WHY there are too few white-collar prosecutions, because too few acts of fraud and manipulation are considered “real” crimes. Elon Musk, for instance, just manipulated the entire market by pretending to take his company private (SPOILER: he’s not). WILL HE SPEND A DAY IN SPACE JAIL? No. He won’t even be prosecuted for the FRAUD he just boldfaced committed in public. He falls into the category of “America’s problem.”
Ferro isn’t the only person aboard the “prison is not the answer for rich white people” train. The first time I heard this argument was from Bloomberg View columnist Matt Levine. Levine unleashed on Twitter this weekend, over the issue. The full thread is worth a read, but here is a part of the argument that trips up progressives from time to time:
Again, the underlying presumption is not wrong. We live in a deeply racist society and if you don’t understand that your views on law enforcement are pretty much useless. Every single thing you can do to ratchet up pressure on rich white people will result in more and harsher prosecution of poor non-white people because that’s just how America goes. My response to this salient point is twofold.
1. So the f**k what? If we’re going to be entirely beholden to the truth (and it is truth) that laws will be read to punish non-whites more than white, then that’s pretty much an argument for having no laws. Non-whites are stopped for freaking traffic violations more than whites, and our penalties for those violations include death. But you won’t hear me say “abolish all traffic laws.” Seat belts are good. Drunk driving is bad. As the man once said: take this, all of you, and drink it. It is the chalice of my black blood and will be poured for you so that nobody can go 55mph in a school zone.
If you have a plan for dealing with the systemic racism in our criminal justice system, I’m here for that. But what you’re not going to do is to tell me that we can’t prosecute more rich white people because of systemic racism against non-white people. You’re not going to USE the racism against non-white people as JUSTIFICATION for under-penalizing financial criminals. Yes, we’d catch more Wesley Snipes than Manaforts. But we’d also catch more Manaforts. That’s a freaking start.
2. If you are going to tell me that more enforcement isn’t the answer, then I’m going to tell you that maximum penalties are. I’m not normally in favor of the death penalty, precisely because of the unfair and racially biased application of capital punishment (I also, you know, have a moral center). BUT… since the death penalty is here and doing its work of killing black people already, why not put that in play for financial crimes as well?
When we talk about penalties, finance types always want to limit liability to the profits of the illegal scheme. Even relatively “hardcore” people on the financial crimes front want to talk about disgorgement of the profits of the illegal behavior and leave it at that.
The problem is that financial criminals are usually pretty good at math. They can calculate the probability of getting caught, against the potential profits if they get away with it, and if the expected value is over “X” they can make a pretty rational calculation that the fraud is worth the risk of whatever penalty and sentence to Club Fed they may get if they’re caught.
We need to change their calculus: If you get nailed with a financial crime, the penalty has to be so harsh that it could not have been worth it commit the crime in the first place. I come from the Trading Places school of thought: “it occurs to me that the best way you hurt rich people is by turning them into poor people.” If we catch you, we should take all of your money. ALL OF IT. Even that money you are hiding in your kids’ trust fund. Financial criminals should come out of prison — if they get out of prison — like Jean freaking Valjean. They should need to be issued an EBT card to make it on the outside.
We make sex offenders put up signs on Halloween warning people not to come ask them for candy. Similarly, I’d be happy to see financial criminals BRANDED and disallowed from so much as operating the register at Whole Foods.
I’m not being facetious. The logical conclusion from Ferro’s and Levine’s points isn’t to continue to let these financial criminals get away with it because “omg, prison is mean.” It’s to ratchet up the penalties so hard on the few we catch that others know they are taking their very lives into their hands when they tell their son about some hot, non-public information.
And when we get a big one: I mean the Enron people should be on death row… if we’re going to have a death row, which we shouldn’t.
See, it’s actually the finance bros who act like having money and making money is so important that it makes you a more important form of human than everybody else. Fine. Since that’s how they act, I say that we punish them when they steal money like it’s a moral violation of humanity. That’ll learn them.
Earlier: Judge’s Proposal For Criminal Justice System Is Far Too Sensible For Anyone To Actually Implement
Elie Mystal is the Executive Editor of Above the Law and the Legal Editor for More Perfect. He can be reached @ElieNYC on Twitter, or at elie@abovethelaw.com. He will resist.
If We’re Going To Have Capital Punishment, We Should Use It On Financial Criminals curated from Above the Law
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