Question
Occupy Wall Street: With protestors calling for the arrests of negligent financial leaders responsible for the economic crisis, who specifically should be arrested, and why?
Answer
Unfortunately, the answer, in round numbers, is "nobody." Anything achievable within the letter of the law wouldn't be able to hit any of the real villains, or serve as a warning/deterrent to anyobody.
On the other hand, if you could get some hyper-activist judge to sign off on the arrest of anybody significant without sufficient cause, you could make a mockery of rule of law and due process, and start a process of eroding trust in the justice system.
Is that worth doing? I'll get to that, but first, let's see if there are grounds within the law to act.
Acting Within the Letter of the Law
I am not a lawyer or cop, but I don't believe it would be possible to gather sufficient evidence to demonstrate intent to break any laws for the most part. A costly investigation might make a minor dent, but that's it.
At best, in 90% of the cases, you would be able to demonstrate violation of the spirit of the law rather than the letter. In the remaining 10% where you might be able to obtain grounds for action, you would likely end up arresting and indicting some poor clueless schmuck who was drawn into complicity by bigger criminals in the background, and propped up to take the fall at the last minute. The real moral criminals are already out of reach of the law.
To arrest anyone, you'd need to provide proof to back up specific charges, such as insider trading, fraud, collusion, criminal negligence etc. That was possible in the Bernie Madoff case, so he was arrested.
Maybe such evidence exists in other cases. I doubt it. If it ever existed (the smartest villains operate under an impenetrable cover of plausible deniability), it was probably destroyed very soon after the first signs of the collapse.
Wall Street is not dumb. I'd guess that 90% of the damage was done within the law, not outside of it. Even making the most plausible charge of criminal negligence stick would be hard: you'd have to prove that they were smart enough to govern better, but chose not to.
Wall Street has been smart enough to make the financial system illegible and ungovernable, partly as an insurance policy against criminal negligence charges. Go arrest the "invisible hand" if you must.
The calls to indict people like Greenspan and Bush are particularly laughable. I didn't hear anyone calling for Greenspan's head or screams of criminal negligence back in the day, when he was the darling of the 90s boom economy.
Bush? He may have had his flaws, but criminal negligence in economic matters isn't among them.
Hey, why not indict Bill Clinton too. He got all that political credit for the illusory wealth created in the nineties by Greenspan. Oh wait, we all love that lovable little rascal. We only want to indict the guys who don't look very charming on TV.
Which brings me to...
Acting Within the Spirit of the Law
Okay, so if we cannot achieve much by acting within the law, what about going outside it, or bending it? How about translating moral outrage into moral indictments for violating the spirit of the law?
In other words, make the court of public opinion the real court. Justice by lynch-mob.
The problem is: who gets to define "spirit"? It doesn't matter who does. You've opened a can of worms.
There is a reason the courts only pursue people for violating the letter of the law, rather than the spirit. Once you start prosecuting people for violating the spirit of the law, you are at the start of a slippery slope towards corrupt kangaroo courts, and a return to subjective he-said-she-said conflict resolution mechanisms that start with words and end with guns. It is a world of unenforceable contracts and a general, spreading contagion that makes all state institutions venal and kills the economy.
At that point you are just one step removed from armed civil unrest undermining the legitimacy of the state. It's a crappy state you say? I'll give you crappier: deregulation of the state's monopoly on armed violence.
Do you know what that's like?
When States Fail
Unless you are good with a gun, like Ryan Lackey, you probably don't want your world to go the kangaroo court route, as people who have lived in places with poor/non-existent rule of law can testify. Such places are worse for non-elites, not better. Breakdown of rule of law makes the unprincipled elites stronger, not weaker. You may lynch a few, but you'll arm the rest with worse weapons, and lose your own already-dubious claims to the moral high ground.
Moral corruption within the letter of the law at high levels may be bad, but it is still better than endemic moral and actual corruption at all levels and a completely broken state machinery.
While most of India has reasonable rule of law, I had the dubious privilege of growing up in the then worst-governed state, Bihar. Ironically, within a small island of civil order maintained by a large corporation (Tata Steel), within an otherwise generally Hobbesian state of war, with bankrupt and completely venal state machinery, Maoist insurgents, an armed separatist movement, internecine clan and caste warfare amongst armed militias and periodic religious riots. For a while as a small child, I lived through a state-declared emergency period, when law and order was restored at the expense of brutal stomping on civil liberties (I was too young to remember those years). Then two Prime Ministers were assassinated during my teen years.
I am not trying to put on a bad-ass facade here. I was safely cocooned away from all this. The chaos began a few miles outside my town. It was merely a somewhat horrifying spectator sport for me. And no, this doesn't make me an apologist for corporations. I happened to live under the protective umbrella of a fairly benevolent one, but I don't believe all or even most corporations are benevolent. Not even the one that secured my own childhood, the Tatas.
Trust me, you do not want to live in such conditions. In an attempt to take away financial weapons of mass destruction from Wall Street, please don't hand them physical weapons of mass destruction. You do not want the private armies operating in Iraq moving stateside, or a return to the 1870s when Robber Baron mining magnates had union leaders gunned down (one of the early use cases for Mr. Gatling's famous invention).
Let's keep American firepower, clandestine support for kangaroo-court regimes and client states where it belongs: in third world countries and middle eastern kleptocracies, securing oil and sweatshops, for the benefit of hybrid-driving hippies and hummer-driving rednecks alike.
Other Options
Are there other options?
You could always close the stable door after the horse has bolted, and plug old loopholes. Wall Street will merely find new ones, and our financial system will get even clunkier and less able to craft agile responses to the next crisis.
Or you could rethink some fundamentals.
For example, you could try some parts of Roger Martin's prescription in Fixing the Game. http://www.ribbonfarm.com/2011/0...
Or you could ponder Nova Spivack's idea of separation of Corporations and State.
http://www.novaspivack.com/best-...
What is clear is that we need political evolution. Traditional 18th century democracy is obsolete, we need to invent Democracy++. Among the things that need to be abandoned are blunt-instrument collective action, guillotines, and other such delightful things.
Political evolution via popular revolution and civil unrest is the messiest way to go about it. Can be done, but basically all the currently living generations would pay a huge cost.
I don't know about you, but I'd like to try evolutionary measures first. What are the right ones? We won't know until we stop ranting and start thinking.
If they don't work, I'll move to Costa Rica, and you guys can break out the guillotines.
On the other hand, if you could get some hyper-activist judge to sign off on the arrest of anybody significant without sufficient cause, you could make a mockery of rule of law and due process, and start a process of eroding trust in the justice system.
Is that worth doing? I'll get to that, but first, let's see if there are grounds within the law to act.
Acting Within the Letter of the Law
I am not a lawyer or cop, but I don't believe it would be possible to gather sufficient evidence to demonstrate intent to break any laws for the most part. A costly investigation might make a minor dent, but that's it.
At best, in 90% of the cases, you would be able to demonstrate violation of the spirit of the law rather than the letter. In the remaining 10% where you might be able to obtain grounds for action, you would likely end up arresting and indicting some poor clueless schmuck who was drawn into complicity by bigger criminals in the background, and propped up to take the fall at the last minute. The real moral criminals are already out of reach of the law.
To arrest anyone, you'd need to provide proof to back up specific charges, such as insider trading, fraud, collusion, criminal negligence etc. That was possible in the Bernie Madoff case, so he was arrested.
Maybe such evidence exists in other cases. I doubt it. If it ever existed (the smartest villains operate under an impenetrable cover of plausible deniability), it was probably destroyed very soon after the first signs of the collapse.
Wall Street is not dumb. I'd guess that 90% of the damage was done within the law, not outside of it. Even making the most plausible charge of criminal negligence stick would be hard: you'd have to prove that they were smart enough to govern better, but chose not to.
Wall Street has been smart enough to make the financial system illegible and ungovernable, partly as an insurance policy against criminal negligence charges. Go arrest the "invisible hand" if you must.
The calls to indict people like Greenspan and Bush are particularly laughable. I didn't hear anyone calling for Greenspan's head or screams of criminal negligence back in the day, when he was the darling of the 90s boom economy.
Bush? He may have had his flaws, but criminal negligence in economic matters isn't among them.
Hey, why not indict Bill Clinton too. He got all that political credit for the illusory wealth created in the nineties by Greenspan. Oh wait, we all love that lovable little rascal. We only want to indict the guys who don't look very charming on TV.
Which brings me to...
Acting Within the Spirit of the Law
Okay, so if we cannot achieve much by acting within the law, what about going outside it, or bending it? How about translating moral outrage into moral indictments for violating the spirit of the law?
In other words, make the court of public opinion the real court. Justice by lynch-mob.
The problem is: who gets to define "spirit"? It doesn't matter who does. You've opened a can of worms.
There is a reason the courts only pursue people for violating the letter of the law, rather than the spirit. Once you start prosecuting people for violating the spirit of the law, you are at the start of a slippery slope towards corrupt kangaroo courts, and a return to subjective he-said-she-said conflict resolution mechanisms that start with words and end with guns. It is a world of unenforceable contracts and a general, spreading contagion that makes all state institutions venal and kills the economy.
At that point you are just one step removed from armed civil unrest undermining the legitimacy of the state. It's a crappy state you say? I'll give you crappier: deregulation of the state's monopoly on armed violence.
Do you know what that's like?
When States Fail
Unless you are good with a gun, like Ryan Lackey, you probably don't want your world to go the kangaroo court route, as people who have lived in places with poor/non-existent rule of law can testify. Such places are worse for non-elites, not better. Breakdown of rule of law makes the unprincipled elites stronger, not weaker. You may lynch a few, but you'll arm the rest with worse weapons, and lose your own already-dubious claims to the moral high ground.
Moral corruption within the letter of the law at high levels may be bad, but it is still better than endemic moral and actual corruption at all levels and a completely broken state machinery.
While most of India has reasonable rule of law, I had the dubious privilege of growing up in the then worst-governed state, Bihar. Ironically, within a small island of civil order maintained by a large corporation (Tata Steel), within an otherwise generally Hobbesian state of war, with bankrupt and completely venal state machinery, Maoist insurgents, an armed separatist movement, internecine clan and caste warfare amongst armed militias and periodic religious riots. For a while as a small child, I lived through a state-declared emergency period, when law and order was restored at the expense of brutal stomping on civil liberties (I was too young to remember those years). Then two Prime Ministers were assassinated during my teen years.
I am not trying to put on a bad-ass facade here. I was safely cocooned away from all this. The chaos began a few miles outside my town. It was merely a somewhat horrifying spectator sport for me. And no, this doesn't make me an apologist for corporations. I happened to live under the protective umbrella of a fairly benevolent one, but I don't believe all or even most corporations are benevolent. Not even the one that secured my own childhood, the Tatas.
Trust me, you do not want to live in such conditions. In an attempt to take away financial weapons of mass destruction from Wall Street, please don't hand them physical weapons of mass destruction. You do not want the private armies operating in Iraq moving stateside, or a return to the 1870s when Robber Baron mining magnates had union leaders gunned down (one of the early use cases for Mr. Gatling's famous invention).
Let's keep American firepower, clandestine support for kangaroo-court regimes and client states where it belongs: in third world countries and middle eastern kleptocracies, securing oil and sweatshops, for the benefit of hybrid-driving hippies and hummer-driving rednecks alike.
Other Options
Are there other options?
You could always close the stable door after the horse has bolted, and plug old loopholes. Wall Street will merely find new ones, and our financial system will get even clunkier and less able to craft agile responses to the next crisis.
Or you could rethink some fundamentals.
For example, you could try some parts of Roger Martin's prescription in Fixing the Game. http://www.ribbonfarm.com/2011/0...
Or you could ponder Nova Spivack's idea of separation of Corporations and State.
http://www.novaspivack.com/best-...
What is clear is that we need political evolution. Traditional 18th century democracy is obsolete, we need to invent Democracy++. Among the things that need to be abandoned are blunt-instrument collective action, guillotines, and other such delightful things.
Political evolution via popular revolution and civil unrest is the messiest way to go about it. Can be done, but basically all the currently living generations would pay a huge cost.
I don't know about you, but I'd like to try evolutionary measures first. What are the right ones? We won't know until we stop ranting and start thinking.
If they don't work, I'll move to Costa Rica, and you guys can break out the guillotines.