Why Aren’t They In Prison? #Greed

Driving up to the mountain where we will hike to Upsala GlacierThis is a question I have often asked myself about many different businesses and people in their employ.

Let’s start with the car companies. Today Toyota agreed to $1.2 Billion in fines and accept full responsibility. The new CEO at GM was quoted as saying regarding safety and recalls “there is something very wrong here.” When people have died because companies put profit over safety that should be a criminal act and they should be tried for murder. What’s $1.2B to Toyota when they made $5.7B last quarter alone? Fines alone are not enough. Whomever it is in these companies that makes the decision to keep things quiet should be tried in court on first degree murder charges. If people knew they personally could go to jail they might be less likely to cover things up.

This brings me to pharmaceutical companies, Vioxx in particular. I don’t remember which of the Big Pharma companies that made the drug, but that company knew of serious potential problems with it before it went to market. When it did go to market there were a number of deaths. But, the number was probably 1% so they did nothing about it. I don’t remember how many people did die, I think it was thousands. The drug was taken off the market and the company paid fines. Again, just like with the car companies, whomever it is that makes that decision to take the risk, put peoples lives in danger, and put the drug on the market should not just have money taken away. They need to be on death row like any other common criminal.

The Big Banks who are now paying massive fines, in the 10s of Billions of dollars I see as also in this same boat. If they were doing things that were not legal and were putting their clients money in danger they should also be tried as criminals. It doesn’t do much good to fine JPMorganChase $12Billion when that is a drop in the bucket for them. The big shots there still have their fancy offices, huge salaries and bonuses. The clients? They’ve lost their homes. Their homes are underwater in their mortgages. The crash of 2008, the 20 million longterm unemployed people it’s all on the backs of the banks and their shady lending practices. The decision makers, whether they be the CEO or traders, should be tried in a court of law. Also lose any kind of ability to stay in banking, any licenses they earned.

I would go harder against corporate illegal behavior, so called white collar crime, than I would common criminals. Why am I coming down so hard on them? Because the hasher the penalty the less likely is it that people will repeat the behavior. Maybe they will do more testing on that drug that’s about to be released. Maybe car companies will take safety recalls more seriously. If the people themselves thought they would be in a maximum security prison.

Choosing profit over peoples lives is not only unacceptable, it’s criminal.

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14 thoughts on “Why Aren’t They In Prison? #Greed

  1. Andrew, good piece. Another feature of this problem is that when the government fines these companies, the government keeps the money. This makes government seem complicit in the damage done to people by the drugs, cars, banks, or whatever. The companies profit, the government profits, and regular Americans lose, again. Thanks for highlighting this problem.

  2. So the people who took the mortgage they new they couldn’t afford don’t have any responsibility? The loans Chase were fined for were loans Chase didn’t even originate. They were bought by Chase when WaMu went under (at the request of the gov’t).

    1. Yes, people have responsibility for purchasing things they can’t afford. However, a lot of people don’t understand paperwork and details and I am not sure they knew what they were getting into. Doesn’t alleviate their responsibility. But, you do have to ask, why were reputable banks offering the no downpayment, ARMS?

      1. Because politicians in low income areas wanted to help their people own homes. Many were able to qualify the conventional way. Ultimately it hurt everyone.

  3. The difference between your first two example & the last is the american people had no idea the cars were faulty to the drugs were bad and would have no way of knowing. But when you buy a house w/no $ down and can’t document your income, you’re aware you can’t afford it.

    1. Again, I’d ask banks why they were offering this. When I bought my Brownstone in 2005 I knew by instinct that I wanted a consistent amount of money I’d have to pay monthly, no ARMS, so I went with 30 year fixed. And when I put down 20% CitiMortgage said to me, you do know you can put down less.

      No money down is too good to be true. I didn’t fall for it, others did. I wouldn’t place the blame completely on them though.

      1. Yes, but the biggest % of ppl who went into foreclosure took “stated income loans”. If you make $35k/yr but still insist on buying a $500k home, you are not smart enough to own a home..

  4. Lastly, if you don’t allow Toyota to build cars, Merck to make drugs or JP Morgan Chase to give loans they all go under. Putting hundred of thousands out of work. How does that solve the problem? The same Americans you want to protect are the same people who work in those industries.

    1. If I wasn’t clear about this in the piece I apologize. I didn’t mean shutting the company down. I meant whomever was found guilty, those individuals, should not be able to work in banking/autos/pharma as party of their penalty.

      Btw, thanks for reading and taking the time to respond!

      1. Do you just throw the CEO in jail? What about CFOs, EVPs, and down? What about board members? How far down the chain do you go? Every industry has “rule breakers” but to prosecute?

      2. I enjoy a good debate as well. The overall point of the piece is that peoples lives should be put ahead of profits and greed. I said whomever is responsible for the decision making should be the one to face criminal charges. They’d have to find that out by doing an investigation. If Toyota knew for years that their floor mats were causing sudden acceleration and deaths, whomever decided to not have an immediate recall should be tried; not just a slap on the wrist of taking some money away. You make good points about the housing crisis. But, what bank approves a mortgage for someone earning $35k to live in a $500k home?

        Today there was another example of what I am talking about. I haven’t been following the case that much, but some general in the army was charged with multiple sexual misconduct for many years with many victims. He paid a fine and no jail time. To me, if you are raping people for years you should be behind bars, not just paying a fine.

  5. Because sexual hassment isn’t a crime. Neither is giving a loan to someone who really shouldn’t get one. Politicians pushed for more flexible guidelines and banks gave in and the gov’t backed them.

  6. And the banks didn’t know the borrower really made $35k. It was states income. Borrower stated they made more than they did. So the BORROWER knew they couldn’t afford it first and foremost. Personal responsibility has gone out the window..

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