Risk Latte - “Economic Holocaust” and the Nuremberg Trials for Bankers

“Economic Holocaust” and the Nuremberg Trials for Bankers

Team Latte
February 14, 2009

When bankers and investment bankers sold CDOs and other exotic financial derivatives to their institutional clients and millions of small investors across the United States, and indeed across the whole wide world, presumably no law was broken. When these bankers gave away loans to the deprived sections of the society or those with inadequate capacity to payback these loans only to see them eventually default on them and get even poorer, presumably no law was broken. When these very same bankers took hundreds of millions of dollars in annual bonuses while at the same time burning their shareholders’ money, presumably no law was broken.

Now, as the actions of these bankers have crippled the global economy causing mass layoffs, corporate and individual bankruptcies and have eventually impoverished millions across the world certainly no law has been broken. It’s just economics. Talk about Keynesian theory, monetary hocus pocus, stimulus plans, op ed articles by Nobel Laureates, the Davos bullshit and all this pain and misery is going to go away; well, some day for sure.

And if no law is broken, no crime is committed then no one should be prosecuted.

But there is a crime of another kind. If a man willingly and knowingly, driven by sheer greed and hedonistic desire, acts in a manner that puts the livelihoods of millions of others in jeopardy then he commits a crime. If he puts personal gain above the greater good of the society to such an extent that he drives his brethren and the masses to destitution and poverty then he commits a crime. Never mind the courts and the legal jurisprudence. He commits a crime in the eyes of the humankind.

The House Financial Services Committee hearing on Thursday where the Committee Chairman Barney Frank and others scolded and belittled the CEOs of the top banks in the United States, berated and railed against them will go down as a unique event, a watershed that perhaps puts an end to the era of greed, irresponsibility and calculated financial criminality of our generation.

Listening to the Massachusetts Representative Michael Capuano talk about the hope and possibility of prosecuting these top bankers some of us could have been forgiven for thinking that this was our Nuremberg, which is metaphorically speaking, of course. It was not just the sound bites that reverberated in your ears but what he said that stayed in your head after you switched off your TV or the YouTube broadcast; the substance of his speech was overwhelming. It wasn’t a courtroom but it was still a trial. It was a trial of the entire banking system of the United States, a trial of a group of men in suits who were little more than high way robbers, a trial of a handful of megalomaniac and greedy leaders who have misled their shareholders, their depositors and above all poisoned a generation of young men and women with their infectious hedonism and greed. It was a trial of a chosen few who through their grossly irresponsible and unethical acts have caused the biggest “economic holocaust” in modern times.

Maybe we need our own Nuremberg Trials.

How else do we define this moment? This moment of complete awareness about what was really happening on Wall Street and banking boardrooms for decades, this moment of utter pain and misery of the masses all around, this moment of total shock and disbelief at the behaviour of a group of men who would wreck the lives of so many across the world.

Maybe we need our own Nuremberg Trials where a justice of a different kind is meted out to these CEOs and many others who carried out their orders. Perhaps they should be incarcerated in their banks and made to work for no bonus and a dollar a month for the next twenty years; perhaps, we should confiscate eighty percent of all their bonuses and salaries for the last ten years; we don’t know exactly what to do or what would be an appropriate punishment but this much should be obvious. We need our Nuremberg Trials.

Historical Note:

The Nuremberg Trials that opened in October 1945 to try the Nazi war criminals after World War II signified the transition of our world. It would be remembered for what it achieved, a world making peace with itself. Staring at the face of death and destruction, at Nuremberg, Europe finally resolved to move on and never fight, to build a peaceful society where human dignity counted above all else.

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