Robbing Hoods

On the flight back to India I watched ‘Inside Job’ - a documentary about the 2008 financial crisis. For those with even a remote interest in financial markets, it is a must-watch.

The one startling fact I took away from the film was the contrast that after the Savings and Loans crisis of the late 1980s, when investment bankers used small investors savings to speculate and lost it all, 1000 persons were prosecuted on criminal charges for fraud and 800 of them were convicted.

After the 2008 financial crisis, there have been fines imposed on the big Wall Street banks but no criminal charges filed. Not one person has been convicted.

The film appears to imply that this is because of the immense lobbying power of the financial services industry. The very people who fought hard against any regulation and oversight of the derivatives market were the very people who were appointed as advisors by the Bush Administration to help resolve the crisis. These people had clear vested interests in the Wall Street Machine and they were given the right to use tax-payer money to bail out the big banks.

These are the new Robbing Hoods – the guys who stole from the poor to give to the rich – themselves.