The Grand Illusion
Last week in Utah, Tim DeChristopher was sentenced to two years in federal prison and fined $10,000 for trying to defraud the government. It was not, as I noted in an earlier blog, exactly the normal case of fraud. DeChristopher is an environmental activist who bid on federal oil and gas leases on federal property without having the funds to pay for those leases. He made the bids because he felt that the BLM had illegally opened the lands for bidding. A federal judge later ruled that the process was illegal and voided the leases awarded, but the federal government still decided to prosecute DeChristopher, and in March he was convicted.
The judge who issued the sentence indicated that DeChristopher might well have avoided jail time if he had not been so publicly outspoken, even though DeChristopher was always polite in his statements and did not incite anyone to violence or public protests, but merely tried to explain why he had acted as he did. So the judge punished him for exercising his first amendment rights as well.
Now… if I understand all this, DeChristopher got no money or gain from his acts, and the government didn’t lose any, either, because a federal judge had already declared the lease sale void. But, if DeChristopher loses his appeal, he’ll go to jail for two years for trying to stop something that the courts eclared illegal, if many months after DeChristopher’s illegal protest bid.
At the same time, roughly, not a single one of the Wall Street bankers and real estate securitization wizards has been charged with a single crime. These were the “wizards” who created bundled securitized high risk mortgages and fraudulently sold them as prime low-risk securities… and created the largest financial meltdown in U.S. history.
Obviously, Tim DeChristopher broke the law, and some penalty should be exacted, but it ought to be more on the line of 30 days in jail or time served or the like, especially compared to the “justice” [or lack thereof] meted out on those upstanding investment bankers… who, by the way, are still using practices that have been declared less than perfectly legal to foreclose on mortgages of delinquent homeowners.
What amazes me is the depth of public support for the politicians who not only bailed out the bankers and their overpaid managers, but who refuse to change the tax laws on compensation so that hedge fund managers and the like pay, by law, only 15% in federal income taxes on the bonuses they received for effectively defrauding the government and the American people. [And no, as an author, I don’t get that kind of favorable tax treatment, and in fact, as a self-employed one, I end up paying both halves of Social Security taxes.]
All this suggests to me, and likely not just to me, that the legal structure we’ve built in recent years has strayed far from justice and is more a question of creating a form of legal financial and taxation discrimination in favor of the obscenely wealthy… and to a lesser degree, to those who are not truly poor, but who manage to exploit the “safety-net” of programs designed for the truly needy.
Meanwhile, a man who protested an illegal lease sale, if his appeal is refused, will serve more time in jail than those who destroyed billions of dollars in savings and investments, as well as millions of jobs.
I am just a little curious about the judge who stated DeChristopher could have avoided jail time if he had not been outspoken. If the judge happened to be a member of the Latter Day Saint faith, it might in part explain his discouraging of outspoken behavior. The Church has a very authoritarian view on leadership and the policies made by leadership which discourages outspoken criticism or questioning. This is all well and fine in my view if it were just within the Church… but it tends to bleed over into other aspects of members lives as well, to the point of discomfort of those not of their faith.
I only mention this because I hope that this judge’s decision reflects a regional trend/culture, rather than a reflection of the nation as a whole.
As a side note, I am reading through the book, ‘Justice,’ by Michael J. Sandel that explores several of the issues brought up in your post today.
It’s very much the same over here. In the past couple of years, we’ve had an expenses scandal involving our MPs. Only a very few were punished beyond having to repay the money they got by abusing the expenses system. One MP was jailed for 16 months, but was recently released after serving just 4. A couple of months later, those same MPs were talking about and condemning the people on benefits (Unemployment, etc) who shouldn’t be on them, and I’ve little doubt that those who are caught have to serve a longer punishment.
I think it’s a case of there’s laws for us, and a law for them. The bankers on both sides of the pond have brought many countries to their knees, to the point where it looks like Greece is in very, very serious trouble. I think only a few countries, such as Germany, are doing OK out of all of this.
For the little guys, like myself and you, there’s big punishments for little acts. You could steal stuff worth, say, £2000 and get locked up for a year. The people in the big banks bring a country to its knees, with damages ranging from millions to billions of pounds or dollars, and they still get their cushy jobs with their flash cars, expensive suits and millions-per-annum in bonuses.
It’s amazing, isn’t it? Our economists, our bankers, our financiers, they all seem to have absolutely no clue. It’s worrying that so many people managed to allow this to happen.
So that’s my view. The guy in question got punished, and rightly so, but it begs the question of why those who caused such ruin and hardship haven’t been brought to justice.
I don’t think appropriate free speech is wrong, period. So if the judge really said that, they messed up, and should be overturned. OTOH, applying for something one has neither intent nor ability to pursue is wrong, regardless of whether the option having been offered is also wrong.
As for financial institution involvement in the meltdown, the government not only bailed them out, it had long encouraged them to make risky loans in the name of making loans available to those not traditionally served by loans – alleged to be a codeword for discrimination, which it no doubt sometimes was, but far more often, the only discrimination was against inability to repay the loan under anything short of ideal conditions. So the government encourages making riskier loans, with the threat of being demonized if one doesn’t. And the short-term rewards are good – higher volume, etc., causing quarterly-report oriented management to do what makes _them_ look good, and pile it on. A bunch of risky loans made means a bunch of risky derivatives will be unloaded. By the time the whole house of cards falls apart, most of the hit-and-run managers will have made their fortune, and moved on.
Private executives were complicit, but so were elected and unelected government officials of both parties, and populists of all stripes, whether of the left or of the misguided “compassionate conservatism” mantra.
Government has no business being compassionate. It needs to enforce a relatively small set of rules consistently – and being _able_ to do so consistently _requires_ that the set be small, both because there’s not enough people on the planet to enforce a large set of rules uniformly, and because the more rules, the more opportunity for corrupt relationships between regulators and regulated.
…and of course the most important reason of all that government should be less intrusive, even if that means not attempting to guarantee outcomes for individuals: every expansion of government power equals a loss of liberty.
Sorry, the weird comment-submitting process toasted my first reply. Several economists here (don’t know much about there) have been talking about this and predicting many of the consequences for at least the last 6 years — as well as the economic consequences of increasing income inequality. Paul Krugman (Princeton), Joseph Stiglitz (Yale?), Brad deLong (Berkeley), and maybe Jeffrey Sachs (Harvard), Peter Diamond (MIT), and more recently, to some extent, Robert Shiller (Yale). They have usually been viewed by those who disagree as biased by partisan politics.
My theory is that attempts by anything other than _voluntary_ charity to redistribute wealth actually _increase_ income inequality, by encouraging the unproductive skill of gaming the system.
If people’s best chance of having what they want is to do what’s in everyone’s best interests (something productive), I expect most people will choose to survive and prosper, even if it’s a hard road to get to where they can do so effectively.
As someone on a disability pension I’m glad that my country – Australia – has the infrastructure in place to support people like me.
Yes there are people who game these systems but generally they are a minority and there are people who game charities as well.
My mum recently started volunteering at a charity that gives out free grocery hampers once a week. While most of the people who come in for a hamper are obviously needy she mentioned one person who was fairly well dressed and apparently gainfully employed who came in regularly for a hamper each week. She made particular note of this person because they complained about what was in their hamper on one occasion.
Another point against charities as opposed to government welfare infrastructure is reliability. Charities rely on donations and donations fluctuate. Perhaps some people would donate more to charity if they were taxed less but no doubt many wouldn’t.
Even a capitalist society can have some socialist policies without turning into a communist one.
I’m not saying absolutely zero government assistance, although in some ways I think that would not be worse than too much. I _am_ saying means test the heck out of it – nobody able to meet their own needs should be using the government to take from others.
Justice should not be dependent on the free speech activity of the defendant. Why should bankers and mortgage brokers who encouraged fraudulent loans and were dishonest about assets be treated more leniently than Mr. DeChristopher? That indicates serious problems with our society’s justice system, and an emphasis on profit motives over free speech supporting protest.
The comment verification process for this discussion threw me. Although I realize a process may be necessary to eliminate spammers, I was disconcerted to find my last “verification” request was to drag a knife to shower stall with the sillouhette of woman. Huh?? Shades of Psycho! This time it asked me to drag a flower to a bouquet, and other requests have been likewise innocuous.
I aplogize for the comment verification process, but under milder, earlier,antispan protections, I was still getting over 300 spam comments a day, and even quickly eliminating them was eating up too much time.
Sorry for going off-topic here, but I thought that as it’s mentioned, I’ll just say something. I’m finding that the verification process sometimes doesn’t register the choices correctly.
Believe me, as an old software programmer and designer, I appreciate why things like spam filters can act the way they do. My beef, frankly, is with the programming managers who err too much on the side of getting the job done and not enough on the side of user-testing the user interface — or just ensuring the design reflects how first-time users will use it.
The top three corporate employers of individuals donating to Barak Obama and Co. were Goldman Sachs, Citigroup and JP Morgan. Also big contributors were UBS AG, Lehman Brothers, Morgan Stanley, Bank of America, Merrill Lynch, and Credit Suisse Group.
http://www.politico.com/news/stories/0109/17643.html
http://www.opensecrets.org/pres08/contrib.php?cycle=2008&cid=n00009638
Any questions as to why there have been no prosecutions nor rule changes for bailed out bankers and Wall Street robber barons?