The Morality of Financial Crimes

A Complete Lack of Social Conscience

The world suffered a tremendous shock in 2008 and 2009. Greedy and unconscionable financial industry executives did what they always do. They stole as much money from the unsuspecting as they could, and they paid zero attention to the effect of this theft on the societies that allowed them to achieve their great wealth. Their only motivation was greed and a lack of social conscience.

They created fraudulent financial derivatives, created an entire industry based on greed and ignorance, convinced salesmen everywhere to sell these frauds to institutions, embedded stupendous commissions and profits for those that created these fraudulent instruments and those that sold these fraudulent financial instruments, and financially raped the unsuspecting public.

I am a Capitalist
These are strong words from someone that writes a financial blog. Now in case anyone doubts my motives, I am a capitalist. But I hope I am a capitalist with some basic morality. I invest to make money by buying value, by seeing and taking advantage of trends, and by extensive experience and knowledge. I don’t respect those in the financial industry whose only purpose is to sell frauds to the unsuspecting and reap great profits.

I find that much of my writings involve interpreting for the reader what is going on in the world as a result of the financial turmoil and the hardship facing so many people. All of this turmoil comes from the extreme greed and lack of conscience of a few so-called financial people, who used the lax laws of society to wreck financial havoc and ruin, all because of their extreme greed and the lack of society’s will to punish them for their financial misdeeds.

How Did This Happen?

Through a combination of circumstances that were created by both
– Well intentioned people who wanted to allow the poorer people in society to share in the wealth of society by having affordable housing available to all. To solve this dilemma, rules were created to force lenders to give mortgages to those that could not afford them, and
– Ignorant politicians who naively believed that society should not have rules and regulations as such hindrances provided a negative effect on financial growth.

To give money to someone that cannot ever pay the money back breaks one of the basic rules as to how a free society works. When you give a credit worthy individual’s money to someone who will obviously never pay it back, you are stealing from that law-abiding person. This is a travesty of justice imposed upon us by well meaning but ignorant people.

Separation of Financial Pillars of Society

In a similar fashion, the conservative right, starting with the Reagan administration came to power with the mandate that the separation of financial powers built up over so many decades of thought and regulation, were bad for society. That is like saying that we should repeal all laws against bank robbers because in our current enlightened society, no-one would take advantage of this immense new power given to them without restriction.

History, from the start of biblical times, has taught us that there must be competing forces to keep a society stable financially. Banks have to be limited to banking. Insurance companies have to be limited to providing insurance, Brokerages have to be limited to trading and providing facilities for trading, and so on. When all distinctions and separations are removed from the pillars of the financial world, it is as if we let lose a financial plague upon the world. We gave free rein to all the negative emotions that humans naturally have as part of their basic existence. We removed the normal restraints of society that force people to act in a civilized way.

Understanding History. Humans are Greedy and Competitive

There are always those who fail to understand history, which is a polite way of saying that humans have basic emotions that include some rather unpleasant emotions, such as greed, lack of caring about our fellow man, competing in good and in harmful ways against our fellow man, resorting quickly to violence and wars to achieve our intentions regardless of the harm to our fellow man, and so on.. Society has built up many layers of regulation and accepted conduct to minimize those normal but negative aspects of human nature. As we supposedly become more civilized, we in fact merely suppress those bad traits of humans by punishing people for following “less civilized behavior patterns”. We force people to act in a “civilized” and moral way.

Then in our shocking ignorance of history and what humans will do when the normal boundaries and rules of society are removed, we remove these standards of conduct for supposedly altruistic motives. And guess what happens? Humans run amok and devastate the lives of other humans. Why is it that we are so ignorant as to avoid thinking logically?

Understanding Human Emotions

As we become more sophisticated, we must start to understand what human emotions are and how they affect all of us. The difference between now and decades ago, is the speed of communications. Communications allow the unchecked spread of information on an instantaneous basis world wide. This has allowed monumental and instant changes in how we understand human actions. Rules and regulations to govern human behavior are designed in far flung parts of the world, and good ideas spread without delay everywhere in the world.

A good example of this is the regulation regarding something as simple as the prohibition on texting while driving, has spread without delay to many jurisdictions and continues to rapidly spread.

Human rights have become a buzzword worldwide and organizations and people around the world take up causes without delay. Violence meets severe punishment in the world’s courts and judiciary, and people around the world become quickly aware of misdeeds in locations far from where they live.

Why Does Financial Fraud Not Garner the Same Emotion Scorn as other misdeeds?

Financial disaster wrecked by unconscionable persons upon other persons, remains mostly above the law.

Most of those occurrences happen as unconscionable persons use their position in a supposed free society to steal money and freedom from those not protected by outdated laws, or those given free rein of action by well intentioned but naive lawmakers.

We somehow do not regard the harm to person’s economic lives and standard of living with the same disdain as we hold for physical thieves and criminals. Yet a physical theft is only a single event. Wrecking a person’s financial well being is a event that harms people for indeterminable periods. Somehow we hold these thieves who perpetrate these crimes in high regard and allow them to use their ill-gotten gains to gain entrance to the fanciest country clubs, to buy the expensive homes and cars, and to frequent the most expensive restaurants.

It is shocking that we hold these criminals in high regard and allow them to use their ill-gotten gains to hire the most expensive lawyers and use our legal system to take advantage and to allow them to continue their criminal activities.

When people discuss morality, they talk about pornography, or minor crimes, or gambling. It is time to add financial criminals to the class of people that we scorn and that are prosecuted to the full extent of the law.

War Crimes

There is standard of conduct that is imposed on those that engage in war. Civilization has become that sophisticated. No longer is a defense allowed by an accused that permits the accused to say “I was just following orders.”

It is time to recognize a similar standard in our economic lives to bring to justice that who hurt so many innocents, who destroy with abandon the lives of so many of our people, and who bring such financial devastation upon free societies as we are facing today.

A similar standard of conduct must be imposed upon those in our financial community that ill-gotten gains must be confiscated and the perpetrators punished. When a person sells a financial instrument to another person, the person selling the instrument must be held responsible for at least a basic level of due diligence upon the instrument being sold to ensure that instrument is at least reasonable. Installing such minimum standards are similar to saying that one must be responsible for their own actions. If you drink and drive, you are choosing to possibly hurt some innocent party and you will be punished. If you sell a fraud without caring and without due diligence, you should bear the same responsibility.

If you sell it, you must be responsible for it.

Give back your ill-gotten gains and go to jail. That is only reasonable. As a parting thought, look at how almost everyone in the world is currently suffering from these economic misdeeds perpetrated because of greed. Yet no-one is bearing the fault and no-one is being punished.

We seem to be far from what should be considered a sophisticated and moral society.