It was announced today that the Federal government was going to sue Standard and Poor's rating services in civil court for their role in the financial collapse. As the Washington Post reports, the case involves favorable ratings for toxic assets that led to the financial collapse in 2008 especially revolving around residential mortgages. This is good news for moving forward on recovery, but it is not enough. There is no way that we can prevent this from happening again until we start pursuing the leaders of these titans of the financial services companies with criminal charges. As Jim Rokakis has said there was no sheriff watching the store. The only way to clean up after a period of lawlessness is that some people have to go to jail.
So far only a handful of people have gone to jail for the fraudulent loans, fraudulent ratings system, and the fraudulent profits that created the housing bubble. In the aftermath of the savings and loan collapse thousands went to jail, and it fundamentally changed the way those institutions operated. We need a similar number of criminal cases brought on behalf of the American public. We have heard that people cannot go to jail for stupidity, but bankrupting Countrywide Mortgage and all the other companies that had to be bailed out by taxpayers has to be illegal. Destabilizing the global economy has to be illegal. Making billions in profit that went directly in the pockets of the CEOs while millions were thrown out of their houses has to be illegal. Sending a foreclosure hurricane through much of urban America and then walking away has to violate some laws. We need some creative thinking in Washington to start charging CEOs with criminal offenses for past bad behavior. We need jail time so that this does not happen again, and so that the financial industry will come to the table with solutions instead of the constant complaining about modest changes like Dodd-Frank.
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