Applying “Broken Windows” Theory to Wall Street
Obama’s quick, decisive use of his Executive Authority to provide a short-term, partial fix for millions of people who don’t have legal status to be here will undoubtedly improve the lives of those who have been living in fear. The president promised to act, and he delivered. I’m sure some Democrats are hoping Republicans go berserker with impeachment fever. That will certainly help Tester raise fear-cash for senatorial candidates in 2016.
There also seems to be more movement with prisoners held, some without charge, at GITMO. A Saudi prisoner was just released back to Saudi Arabia. Is Obama trying to make good on one of his first presidential promises? Is this a part of crafting his legacy?
A significant part of Obama’s legacy will be his unwavering fealty to Wall Street. The latest betrayal by the Obama administration has Senator Warren saying Enough is Enough:
Sen. Elizabeth Warren is not pleased that President Obama, once again, has called on a longtime Wall Street insider—especially one who has played a prominent role in controversial corporate “inversion” deals that allow U.S. companies to shed their nationality in the wake mergers—to take a powerful post at the Treasury Department.
Warren’s ire was raised by Obama’s nomination last week of Antonio Weiss, head of global investment banking for the financial giant Lazard, to become Under Secretary for Domestic Finance in his adminstration and the senator from Massachusetts said almost immediately that she would oppose the nomination. On Wednesday night, however, Warren made her disappointment—and not a little outrage—known in a piece published on the Huffington Post, saying that though she’s tried to “give deference” to the president over his choices for the economic team this latest choice goes too far. “Enough is enough,” she wrote.
Obama may be fixing the immigration status of millions living here illegally, lifting the cloud of fear hanging over their heads, but the people he picks to oversee economic policy ensures that the opportunities people who immigrate are seeking will remain unreachable for too many.
This is the result of failing to effectively punish the criminal behavior of top executives; this is the result of the Obama regime’s policy of too big to jail.
Regulators still need to appear to be doing their job, though, so there are low hanging fruit being picked off here and there. Alexis Goldstein, a former Wall Street cog turned activist, has a fascinating new post asking this question: Why Is a Wall Street Regulator Embracing “Broken Windows” Theory?
As it applies to regulating the financial sector, Broken Windows keeps regulators busy with petty stuff while the real sharks and wolves continue their gluttonous predation. From the link:
If you look at the Securities and Exchange Commission’s (SEC) list of recent enforcement actions, it reads like a laundry list of small-time offenders. From penny stock promoters, to “pump and dump” schemers, to an unregistered broker in Tampa, everyone seems to be targeted by the SEC. Everyone, that is, except executives.
That’s because, under the leadership of Mary Jo White, the SEC has adopted a controversial enforcement strategy known as “broken windows.” The theory argues that if one broken window goes unrepaired, soon all windows will be broken, because letting petty crimes go unpunished will evidence that the community doesn’t care about disorder. But the strategy — traditionally employed in the policing of street crime — has shown itself over the years to be incredibly controversial.
White took over the SEC in April 2013, entering the agency at a time when many had lost confidence in their capacity and will to pursue financial crisis-era violations. In fact, given her background as a prosecutor, many held out hope that White’s tenure would usher in a new era where the agency would be tough-on-crime, with the incoming Chair promising Senators a “bold and unrelenting” focus on enforcement, should she be confirmed.
In the intervening time, White appears to have fulfilled her “bold and unrelenting” promise in a peculiar way: instead of prosecuting widespread, systemic frauds at the nation’s largest financial institutions, the SEC has instead embraced a persistent focus on low-level offenders. Given how harshly the SEC has been criticized for their failure to hold elites accountable, why would the agency use a failed and racially coded approach to securities law enforcement?
Good question, Alexis. As Obama begins crafting his legacy in earnest, will the economic tune remain the same?