What Great Recession? Wall Street Remains Unoccupied By Ethics

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Nearly seven years after the American economy foundered under the worst global recession since World War II, it seems nothing much has changed with regard to the behavior of those that brought us collectively to the brink. While the nation’s bankers and mortgage lenders were certainly assisted in their shenanigans by the middle and working class-looting policies of George W. Bush, which resulted in a 35 percent decline in median household wealth, Bush 43 has long since been shuffled into retirement. Meanwhile according to report this week from The New York Times writer Andrew Ross Sorkin, Wall Street malfeasance is alive and well.

In Many on Wall Street Say It Remains Untamed, Sorkin mines new data from a joint survey conducted by The University of Notre Dame and Labaton Sucharow LLP. The project, entitled The Street, The Bull and The Crisis: A Survey of the US & UK Financial Services Industry, engaged “1,200 traders, portfolio managers, investment bankers and hedge fund professionals both in the United States and Britain” in an effort to find out how the culture has changed in the wake of the Great Recession.

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The results, for the overwhelming majority of us who would like to avoid such painful, debilitating economic calamities in the future, are not encouraging. Ross summarizes the Notre Dame/Labaton report as follows, “Rather than indicating that Wall Street has cleaned itself up, it suggests that many of the lessons of the crisis still haven’t been learned. And the mind-boggling settlement numbers, as well as stringent new rules, like the of Dodd-Frank regulatory overhaul in 2010, appear to have had little deterrent effect.”

Among the data highlights of the survey:

  • A third of Wall Street workers who earn more than $500,000 annually self-report that they “have witnessed or have firsthand knowledge of wrongdoing in the workplace.”
  • “Nearly one in five respondents feel financial service professionals must sometimes engage in unethical or illegal activity to be successful in the current financial environment.”
  • Almost half of the over $500,000 crowd shared that law enforcement and regulatory bodies are ineffective “in detecting, investigating and prosecuting securities violations.”
  • A third of respondents “believe compensation structures or bonus plans in place at their company could incentivize employees to compromise ethics or violate the law.”

Though America has voted itself a much more competent and empathetic POTUS in Barack Obama versus the reckless mismanagement of “compassionate conservative” George W. Bush, the data from the study makes clear that the conditions are ripe for a crisis similar to the subprime mortgage scandal to occur. It’s only a matter of time. The unchastened criminals, having suffered nothing personally as a result of their misbehavior, are going about business as usual. As Sorkin writes, “Wall Street is…risk-taking and those who seemingly do it most successfully find that edge of the line and get as close to it as possible without crossing it.”

But as we know, the experts have crossed that line and in a culture where power, money and recklessness have a sexy image, in a regulatory climate where repercussions rarely go beyond a light wrist slap, there is little reason to reform.

But perhaps all hope is not lost. After all, thanks to Bernie Sanders, the 2016 Presidential campaign conversation includes ideas for balancing the “all gimme while the working man suffers” imbalance between Wall Street and the proletariat. Our own Jason Easley wrote Bernie Sanders Plans To Make College Free By Raising Taxes On Wall Street this week. She quotes Sanders as saying, “At a time when the wealthiest people in this country have made huge amounts of money from risky derivative transactions and the soaring value of the stock market, this legislation would impose a Wall Street speculation fee on Wall Street investment houses and hedge funds.”

Wall Street looted the country by operating in the shadows, conducting transactions so complex and murky that most lay people couldn’t understand them. Meanwhile, the Republican political establishment of the Bush II years was all too happy to look the other way. Discourse and study are not synonymous with action of course. But they offer an enormous advantage versus the willful ignorance of the early aughts.

7 Replies to “What Great Recession? Wall Street Remains Unoccupied By Ethics”

  1. And all such malfeasance is PERFECTLY FINE to folks like Robert and other Rxxxxxxd Republicans.
    They’ll take away your pension money- and the pensioners will Blame Obama.

  2. Only because it’s easier to blame the current guy in the White House then the last guy, who was around when it all went to hell.

    To me, the blame is, and will always be, misplaced because they don’t want to hear the truth. To them, the truth is like garlic or holy water to a vampire.

  3. The Republicans want to turn social security over to the private sector to watch over. If the economy crashes again all the old people of America will be living on the streets eating cat food. Is this what Americans want?
    Wall Street needs to be reined in. Although Democrats haven’t taken reform far enough, Republicans will let Wall Street be a free for all!

  4. Exactly, they want to turn it over to the 1%ers who consistently try to impoverish the other 99%. So you can kiss the money you’ve been paying into goodbye, the Kochs need it more than Grandma.

  5. First of all Becky says it was Sarah who wrote the linked article to Bernie wanting free college for everybody, it was actually Jason who wrote it if you click the link.

    Second, when you say this:

    “But perhaps all hope is not lost. After all, thanks to Bernie Sanders, the 2016 Presidential campaign conversation includes ideas for balancing the “all gimme while the working man suffers” imbalance between Wall Street and the proletariat.”

    Do you really mean all hope is lost if Bernie didn’t mention it?

    I have seen many columns with footnotes and direct quotes to a certain other person who has not only given hope but had accomplishments in the real world, and they say she took up all these topics long before many of her “she is a shill” critics.

    All hope is not lost. Despite misinformation running amuck from a few left wing fringe people.

    The hope is alive. Just look around.

  6. This is why another stock market crash is inevitable. The Wall Street bankers have learned nothing from last time because it just wasn’t devastating enough. The only thing that will rattle these institutions to the core is a crash that leads to a depression. Only then will we get substantial reform that leads to long term change for the better. It takes the threat of upheaval by the masses to change the tune of our lawmakers for the better. That’s how history has shown us that things change. It will repeat itself sooner rather than later.

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