When you hear Mitt Romney and his fellow-Republicans calling for deregulation of Wall Street, do you wonder just who they want to deregulate?
Surely, you don’t imagine that the financial industry is peopled entirely by distinguished gentlemen in pinstriped suits (and a few elegant ladies) who lead irreproachable lives?
Surely you realize that anyone – as in ANY one – with the money can join the game?
And surely you know that Organized Crime figured out long ago how to make more money dealing stocks than robbing banks?
The way I see it, deregulating Wall Street would be like repealing the Criminal Code.
There’s an intriguing piece in the current edition of Rolling Stone, by Matt Taibbi, that supports my point of view. Titled “The Scam Wall Street Learned From the Mafia,” the article describes a recent financial corruption case involving three Wall Street “bit players.”
According to Taibbi:
Someday, it will go down in history as the first trial of the modern American mafia.
Yes, I know, you’re rolling your eyes. That’s what Sandra does when I muse out loud about the possibility of the Mafia infiltrating America’s – and the world’s – major institutions. But consider this: the Mafia has been raking in billions – make that trillions – over the past several decades. So what do you think they’ve been doing with it? If it were me, I would have bought myself a bunch of politicians, invested in real estate development and moved in on Wall Street – among other lucrative and legitimate enterprises.
Isn’t that what you would do? So what makes you think we’re smarter than they are?
And, in case you still think I’m crazy, the Rolling Stone article reports that “the reigning American crime syndicate … now operates not out of Little Italy and Las Vegas, but out of Wall Street.”
Taibbi cites the conviction of the three Wall Street scam artists as a case in point. He writes:
The defendants in the case – Dominick Carollo, Steven Goldberg and Peter Grimm – worked for GE Capital, the finance arm of General Electric. Along with virtually every major bank and finance company on Wall Street – not just GE, but J.P. Morgan Chase, Bank of America, UBS, Lehman Brothers, Bear Stearns, Wachovia and more – these three Wall Street wiseguys spent the past decade taking part in a breathtakingly broad scheme to skim billions of dollars from the coffers of cities and small towns across America. The banks achieved this gigantic rip-off by secretly colluding to rig the public bids on municipal bonds, a business worth $3.7 trillion. By conspiring to lower the interest rates that towns earn on these investments, the banks systematically stole from schools, hospitals, libraries and nursing homes – from “virtually every state, district and territory in the United States,” according to one settlement. And they did it so cleverly that the victims never even knew they were being cheated. No thumbs were broken, and nobody ended up in a landfill in New Jersey, but money disappeared, lots and lots of it, and its manner of disappearance had a familiar name: organized crime.
In fact, stripped of all the camouflaging financial verbiage, the crimes the defendants and their co-conspirators committed were virtually indistinguishable from the kind of thuggery practiced for decades by the Mafia, which has long made manipulation of public bids for things like garbage collection and construction contracts a cornerstone of its business. What’s more, in the manner of old mob trials, Wall Street’s secret machinations were revealed during the Carollo trial through crackling wiretap recordings and the lurid testimony of cooperating witnesses, who came into court with bowed heads, pointing fingers at their accomplices. The new-age gangsters even invented an elaborate code to hide their crimes. Like Elizabethan highway robbers who spoke in thieves’ cant, or Italian mobsters who talked about “getting a button man to clip the capo,” on tape after tape these Wall Street crooks coughed up phrases like “pull a nickel out” or “get to the right level” or “you’re hanging out there” – all code words used to manipulate the interest rates on municipal bonds. The only thing that made this trial different from a typical mob trial was the scale of the crime.
So that’s how those financial “masters of the universe” act when they think they can get away with it. And those are the people Romney and his allies in Congress want to deregulate.
Give me a break!