The Savings & Loan Crisis had Michael Milken. The dotcom charade had Bernie Ebbers, Kenneth Lay, and Jeffery Skilling. These men have been selected as the scapegoats to distract the public away from the real criminals that caused each crisis. And now, the world’s largest real estate and banking crisis – much larger than all previous heists combined – has Bernie Madoff. He will serve the same purpose.
Michael Milken was certainly involved in the S&L crisis, but he wasn’t the only villain. After only serving a couple of years (for good behavior) at Club Fed, he returned to society a very wealthy man. What other type of behavior besides “good” is possible at Club Fed? Milken was certainly a scapegoat of the S&L crisis, but he certainly was not innocent. Yet, he is like many scapegoats from white collar crimes who manage to get off easy. One reason is because they have big money to buy their way out. But another reason is because white-collar crime is deemed to be relatively benign in America. This mentality must change now. Americans must demand it.
If you are arrested for a major drug crime, the government seizes all of your assets for a variety of reasons. For starters, the DEA assumes the money was made illegally through drug trade so it must be confiscated. But they also seize the assets in order to stop the drug operation. Why don’t they do this with guys committing huge white collar crimes on Wall Street? Sure, they seized Madoff’s assets, but only to ensure the maximum recovery of investment funds. I’m talking about seizing all compensation that was earned during their period of fraud.
Because white-collar crime is most frequently perpetrated by wealthy individuals, they usually get off very easy. If they are not wealthy when they begin these crimes, they are usually very wealthy by the time they get caught. Yet, in many cases (depending on the specific crime) they get to keep much of what they received by illegal means. And of course, they use their wealth to buy their way out of prison. In the worst of circumstances they buy a lenient sentence. What this means is that crime pays in America; as long as it’s white collar crime.
If a person murders another they can get the death penalty. But if a banker is responsible for fraud causing trillions of dollars of losses, affecting millions of people, the bankers claim ignorance. And they not only get to keep their bonuses that were collected illegally, but they aren’t charged with any criminal activity. Only in America will you see this. This isn’t allowed in Japan, Canada, or Europe. And it certainly isn’t allowed in China.
Perhaps many of you have forgotten the dotcom charade. I certainly haven’t. Thousands of people should be in prison, from Wall Street analysts and bankers involved in irresponsible IPOs, to executives and others involved in insider trading. But only a few were indicted. Most likely, this current crisis will share a similar fate because the media will continue to distract attention away from the real criminals and focus on Madoff and Stanford. But remember, neither had anything to do with the banking crisis.
Today, when Forbes lists Milken in its annual 500 richest Americans, they never mention his involvement in the S&L Crisis. Instead, they describe him as a philanthropist. That tells you more about Steve Forbes and the media than it does Milken.
Remember, it was the dotcom bubble that caused most of the pain during the 2000-2003 period. Today, we still see the effects of this painful period. During the peak of the dotcom bubble, there were dozens if not hundreds of high-tech stocks with triple-digit PE ratios, many with triple-digit stock prices to boot.
Former WorldCom CEO Bernie Ebbers had nothing to do with the dotcom bubble, nor did Dennis Koslowski (former CEO of Tyco). And as big as Enron’s scam was, Lay and Skilling didn’t cause the dotcom bubble to collapse. They had no involvement in it whatsoever. But the media focused on them because they served as distractions from the real criminals who escaped with billions of dollars. Now we see the same thing playing out with Madoff. He is providing the media a person to distract from the bigger criminals.
We need to take a step back and ask the following question. Given the grand scheme of things, are Madoff’s crimes as vile as those committed by the Wall Street and banking executives? How about former Secretary of Treasury Paulson, Alan Greenspan, Christopher Cox, Tim Geithner and Ben Bernanke?
Surely, what Madoff did was utterly irreprehensible. He destroyed the retirement savings of hundreds if not thousands of individuals. But we must not forget that the executives of the banking industry have done far worse because they have destroyed the retirement savings of millions. Arguably, they have caused severe financial and economic distress to billions of people around the globe.
I find it odd how Madoff and Stanford are the only ones being blamed for a Ponzi scheme when the banks did the same thing on a much larger scale. You need to ask yourself why the media isn’t going after the villains responsible for the largest Ponzi scheme in world history – that created by Wall Street and mortgage executives.
Even the SEC has not suggested any of these executives would be faced with charges. Instead, the SEC is now focusing on Ponzi schemes using their typical “reactive” approach. Obama appointed Mary Shapiro as the new SEC Chairman to replace Christopher Cox.
The problem is that you shouldn’t expect any real changes from Shapiro because she is from the Wall Street club. And you shouldn’t expect any changes from Obama because he is America’s biggest puppet president ever. The real decisions are being made by the Federal Reserve and their buddies like Summers and Geithner. You people need to realize what’s going on.
The SEC works not for you, but for Wall Street, similar to the FDA-drug company partnership. Until true outsiders are selected to head these organizations, things won’t change. How Obama can speak of “accountability” is a mystery. Calling the $18 billion in Wall Street bonus last year “shameful” is by no means a way to make the case that you plan to hold bankers accountable.
If Obama wants to demonstrate that he understands the definition of the word, he must swiftly go after the banking executives. But he must also confiscate their compensation from the past several years. Thus far, Obama has been nothing short of hypocrisy and I don’t expect anything to change. Please understand these views are not the result of my political ideas. Anyone who knows me understands that I do not criticize policies based on a political philosophy, but rather an economic, common sense and moral one. I did not vote during the recent election because I could not find any capable candidates.
The Ponzi scheme of focus should be that created by the banks and Wall Street. But the financial media has continued to stray away from this topic because their bills are paid by the financial industry. After all, they intentionally created earnings they knew were not valid. But they were valid enough to pump their stock price up and earn record bonuses; bonuses they still have.
It’s shocking to see how the media has been able to distract all attention away from the criminals that destroyed the global economy. And Madoff has been a big help. The media is relieved that Madoff and Stanford were exposed when they were because it allows them to protect their financial sponsors, the financial industry. This is the reality most fail to recognize.
The Madoff situation is surely great news for the financial media. For now, they have someone to distract away from the guilt of the bankers despite the fact that what Madoff did had nothing to do with the destruction of the global economy. Those directly affected by Madoff see him as the worst of evils. Can you blame them? Likewise, those affected by this economic mess should view Wall Street and banking executives in the same light. Perhaps you or someone you know had their retirement savings or net worth destroyed by the dotcom bubble shenanigans a few years ago. Yet, Mary Meeker, Jack Grubman, Henry Blodget and the other analysts are alive and well; and quite wealthy I might add.
In fact, Blodget now has his own propaganda company called Cluster Stock which he promotes in a partnership with Yahoo! as Tech Ticker. Blodget is desperately bowing down to link up with the mainstream media’s propaganda machine while attempting to disguise his site as being one “on your side.”
As you might agree, CNBC uses the same tactic and we know their results. If you happen to waste time on this site, you might notice the guests interviewed by this crew of failed journalists are the same bozos from the mainstream media. I’ll get back to Yahoo! in the future.
Yahoo! Management is too stupid to realize this is one reason why they are a sinking ship. People are sick of trash. It was valuable content that made Yahoo! so successful in the past. Today, Yahoo! has very little valuable content because they have partnered with mainstream media. Only an idiot would partner with a dying industry. It’s remarkable to see Blodget complain about the crooks on his show, as if he did nothing wrong; as if he is an honest guy. The facts point to different conclusions.
The reality is that the timing of Madoff’s Ponzi scheme bodes well for those behind the economic collapse, as well as their financial media cheerleaders. Madoff will be used as a scapegoat, as will Allen Stanford, and a few hedge fund managers from Bear Stearns and Credit Suisse. The real criminals who destroyed the lives of millions will not only go free, but they will be smiling as they sit back and try to figure out how to spend more of your money.
I am certainly not here to defend Madoff. But I think it is important for everyone to keeping mind that we still have not seen any of the real villains of this crisis be brought to justice. Until the banking executives are sent to prison for many years, justice will not be served. For some, nothing short of the death penalty will satisfy their definition of justice.
What we are seeing today in America will be written about and discussed for decades, if not centuries; from the apocalyptic destruction, to the villains who went unpunished and finally, those in Washington and the Federal Reserve. When unbiased historians look back and study this period, the truth will be revealed. Until then, the media will continue to portray things in a misleading manner. These things are always done for specific reasons. Big money is always the primary factor. And when you fail to see others point out these issues as I have and continue to, you might want to consider them in the same league as the guys responsible for this economic mess, because they are intentionally keeping quiet, hoping to remain in good graces with the media so they can market themselves to the sheep who watch financial shows.
Copyright © 2009. Mike Stathis. All Rights Reserved.
More On Media Deception