Why the Goldman Sachs Settlement Is a $5 Billion Sham

Why the Goldman Sachs Settlement Is a $5 Billion Sham, by David Dayen. As Bernie Sanders shouted in the last Democratic presidential debate:

Recently Goldman Sachs reached a settlement with the federal government for $5 billion because they were selling worthless packages of subprime mortgages. If you are a kid caught with marijuana in Michigan, you get a police record. If you are an executive on Wall Street that destroys the American economy, you pay a $5 billion fine, no police record.

Actually it’s much worse, as Dayen explains.

This lack of accountability for Wall Street and the perception of a two-tiered justice system gnaws away at Americans’ trust. But now that the Goldman Sachs settlement Sanders referred to has been finalized, I’m sorry to say that he was wrong. If you are an executive on Wall Street who destroys the American economy, you don’t pay a $5 billion fine. You pay much, much less. In fact, you can make a credible case that Goldman won’t pay a fine at all. They will merely send a cut of profits from long-ago fraudulent activity to a shakedown artist, also known as U.S. law enforcement. …

The upshot: Goldman Sachs and the Justice Department get to divvy up the profits of a fraud scheme perpetrated on the public.

Bottom line: Goldman Sachs ripped people off, the US government now takes a small cut, no bank executives or bureaucrat regulators went to jail, and no politicians were embarrassed. The fine is just a cost of doing business for Goldman Sachs. The big banks have been getting several big fines a year now for several years. And the media yawn or look away.

At that March 9 Democratic debate, Sanders closed his remarks on Goldman Sachs by vowing, “we are going to bring justice back to a broken criminal justice system.” He has no idea how dire that need is. We don’t have a justice system with the courage to convict everyone, regardless of wealth and power. And that ensures that the wealthy and powerful will keep committing crimes.