Jim Chanos, well-known short seller of stocks in his hedge funds, commented on a number of topics in a recent interview. He commented that not one person in the financial sector was punished for crimes leading to the 2008 financial crisis.
Imagine, in that crisis, about $63 TRILLION of wealth was wiped out, an all-time record. We warned ahead of time how and why a crisis would occur in our book, PRELUDE TO MELTDOWN, written in 2007.
In the years following the crisis, we sometimes commented on the person in the Obama justice department, who was charged with the prosecution of those financial crimes. This person said in several interviews in the national media that he just “couldn’t find enough evidence of intent.”
He added that even if there were such evidence, prosecution of a major financial firm carried the risk of producing another crisis. Predictably, he is now working at a major law firm whose clients are some of the same large financial companies. And that is how the system works.
Jim Chanos comments on the crisis and mentions that person’s name:
On these issues, I’d rather have Bush any day of the week than Obama. Both Eric Holder and Lanny Breuer of Obama’s Justice Department said in TV interviews and testimony that they factored in non-judicial aspects as to whether to mount prosecutions.
I think that this had political costs to the Democrats. The crony capitalism still bothers people — the idea that Wall Street got off scot-free and they are still struggling. That lack of justice applied equally under the law was corrosive, not necessarily for Obama personally, but certainly for the party following him.
Informed people know the people named. But how many have heard of Lanny? He is the one who couldn’t find the evidence.
And that is why the next crisis may be worse than the last one. Nothing was learned, no one was punished, and the same people are still in charge in most cases.
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