Facing up to the truth that America has lost its core ethics is painful, but true nonetheless. Evidence?
- One after another bank scandal in which no one is held accountable-much less punished
- The total evisceration of GOP political morals and
- The accelerating extinction of the once-mighty, but now endangered American middle-class
By any standard of morality, the (LIBOR) bank scandal is an extraordinary example of the 1 percent stealing from the 99 percent.
The latest scandal to erupt in the world of finance involves the little-known London Interbank Offered Rate, or LIBOR. Data submitted by major banking institutions is collected, calculated and used as a benchmark to determine interest rates for interbank loans, as well as $350 trillion worth of consumer products such as credit cards, private student loans, auto loans and adjustable-rate mortgages. Investigations in the United Kingdom and the U.S. have uncovered evidence that LIBOR interest rates have been intentionally manipulated by banks over a period of years.
While some of the LIBOR rate manipulation may have been motivated to falsely project the financial health of banks in the period around the recent global financial meltdown, other manipulation appears to be linked to individual traders’ goal of gaining short-term profits. In either case, however, the bottom line of this scandal is that large amounts of money have been systematically and intentionally stolen from average people all around the world, while enriching a small circle of bankers and financial brokers.
There are those that confuse the Prime Rate and LIBOR, but there is a huge difference and we should know and care about that difference.
Prime Rate vs LIBOR
Prime Rate and LIBOR are indices that financial institutions use to set their interest rates.
- The Prime Rate can be found in the Wall Street Journal and is the base rate that is available to non-bank borrowers with the best credit history and credit score. 75% of the 30 largest banks use this as the base rate.
- LIBOR, which stands for the London InterBank Offer Rate, is the rate banks charge each other to borrow funds. LIBOR are short term rates that can range from overnight to one year. The rates are set by the British Bankers Association and released each day at 11 a.m. London time.
Where is The Outrage?
Maybe the concept that has caused the current LIBOR scandal is too complex or bewildering for Americans. Maybe it’s not juicy like Katie and Tom’s divorce. Maybe it won’t fit on the cover of PEOPLE magazine. Maybe Americans are simply tired of hearing about banksters* who cheat and lie–yet go unpunished by the court system, are rewarded by the banking system, and are pandered to by soulless GOP politicians. Consider:
- If it were Pretty Boy Floyd that broke into the Nassau County Treasurer’s Office on New York’s Long Island and stole $13 million, outrage and calls for prosecution would be harsh and widespread.
- If the same Pretty Boy Floyd stole millions from the City of Baltimore or any other struggling municipality, this failure of consumer protection would be an issue in this fall’s presidential campaign.
- If it were Pretty Boy Floyd that perpetrated these frauds he would be behind bars, not on the once fair and informative Meet the Press, which has turned into a love-fest for the monopolistic/anti-capitalism/pro-Republican entertainment-mecca; rather than the respected Sunday-morning political question-and-answer session it was under the steady and competent countenance of Tim Russertt.
Also troubling is that for American consumption, the scandal is emerging in bits and pieces. Listening to a little slice of the truth here and there is apparently having a minimization effect so that the full scope of the rip-off is not being explained (wonks understand it, but few others will) and the public has yet to grasp the seriousness.
But regardless of how, the middle class is being victimized, vandalized, cheated and spoon-fed lies. There is virtually no mention of it in the televised media, and therefore less protest…the media is simply doing its typical lousy job of reporting news that their chosen demographic WANTS to hear (and with which they agree) rather than what they NEED to hear.
Scope of the LIBOR Scandal
It is hard to overstate the significance of this LIBOR point of reference, which is used to value some $360 trillion in loans and financial contracts worldwide. It affects lending to governments, businesses and consumers, and even student loan and credit card rates.
Last month, the British bank Barclays agreed to pay $453 million to American and British authorities to settle allegations that it manipulated key interest rates for profit between years 2005 and 2009, specifically the LIBOR. American and British investigators are now examining whether traders at a dozen other banks – including the “too-big-to-fail” U.S. banks JPMorgan, Citibank and Bank of America – also manipulated rates.
So Barclays’ victims weren’t just other banks and traders. They included taxpayers in hundreds of sectors who are believed to have paid millions, possibly billions more in interest than they should have at the height of the 2008 Lehman/Housing Bubble financial crisis.
Thousand of teachers and other public and municipal employees may have been laid off, billions in unnecessary safety-net funds such as unemployment, food stamps, etc., may have been needlessly spent…all because of bankers’ quest of ever-higher profits.
Lawsuits filed by the City of Baltimore and dozens of other parties against Barclays, and the same players in America who survived the 2008 crisis, JP Morgan, Bank of America, Citibank and Deutsche Bank, have been merged into a single case in a New York federal court. Banks (SURPRISE!!) are denying any wrongdoing, and the true scope of the losses and the responsibility of American banks is expected to come into a much clearer view in the complex legal battles ahead.
Stealing, whether the person responsible for the theft is dressed in a business suit or hooded mask, is still stealing. It is against the law, and justice should be meted out in the harshest, albeit most appropriate way. I STILL cannot believe that not a single Wall Street Banker is serving time for the 2008 financial collapse.
We Cannot Blame Wall Street Alone on This One
America’s ethical decay is not confined to Wall Street either. It has become acceptable “business” behavior if the thieves and liars are wearing white collars. After all, laws (the GOP-dreaded “regulations” they claim are “job-killers”) are supposed to keep the unknowledgeable and therefore vulnerable citizens from falling prey to unscrupulous and fraudulent practices. The GOP, with brazen openness, routinely declares that it’s the law that’s hurting business. Well sure it is…why shouldn’t they be able to lie, cheat and steal? It’s the New American Way. All’s fair in war and business, right?
In short order, and taking full advantage of a populous rocked back on its heels by the Housing crisis that wiped out entire towns and the families living there, The GOP has attempted to seize more and more power, blame everyone else, and strip away long-held rights of minorities, women, immigrants and children. It spans whole sectors of the economy, industries and political parties.
To name just a few more instances of the growing acceptance of unethical acts by anyone as long as they are rich or wear a white collar:
- In April, organized, structured, efficient, and well-planned bribery by executives of Wal-Mart, the U.S.’s second-largest company, was reported across all of Mexico.
- In June, American sports officials accused cyclist Lance Armstrong of engaging in a massive doping conspiracy.
- And Jesse Jackson Jr. appears to be the fifth member of Congress to be embroiled in an ethics scandal in two years.
- Voter suppression laws have been unconstitutionally enacted in states where the Democratic base is most vulnerable in an effort to steal the upcoming U.S. presidential /Congressional election.
- Republican governors across the country are callously laying off workers under their purview as quickly as the private sector can hire new employees for the sole purpose of making the economy, and President Obama look bad.
- The 112th Congress, and the House of Representatives in particular, has spent more time in recess than any other Congress in history because their sole aim is to obstruct, not legislate.
- Every Republican Congressman has signed an oath to little Grover Norquist and the Koch billionaires that supersedes their oath to uphold the Constitution.
- Around the world, a globalized economy is creating never-before-seen, galaxy-sized profits while entire populations of workers lose everything they’ve worked a lifetime to save. A May survey by Ernst & Young surveyed 400 CEOs around the world and found that a majority of them were not only willing to pay bribes and falsify their firm’s financial performance, but expected to as loyal, dedicated, leaders to survive the financial downturn.
- The number of chief financial officers who said they would use pay-offs to stay in business grew from 9 percent in 2011 to 19 percent in 2012. And the number who said they would misstate their company’s financial health to get though a downturn rose from 3 percent in 2011 to 8 percent in 2012. And these are just the ones who would admit it.
- A statement issued by Ernst & Young said, “One of the most troubling findings of the survey is the widespread acceptance of unethical business practices.” “It is particularly alarming that respondents are increasingly willing to make cash (untraceable) payments.”
- Corporate boards and other overseers deliberately look the other way. Eighty-one percent of those surveyed worldwide by Ernst & Young said anti-bribery and anti-corruption codes of conduct were in place in their companies, but that those dreaded “JOB-BUSTING, GOVERNMENT REGULATIONS” were unnecessary and just too darn expensive to implement with any degree of certainty.
- In the ongoing Wal-Mart scandal, senior executives tried to conceal internal reports of bribes being paid. Leaders of Congress continue to hand out shamefully light punishments to their peers, including the 2010 censure of New York Representative Charles Rangel.
- The current presumptive nominee of the Republican Party, Willard Mitt Romney, appears either incapable of telling the truth or simply cannot tell the difference. He has told conflicting accounts of so many policies, practices, beliefs, stances, opinions, etc., that it’s impossible to keep up with them all.
How about, “We, as an electorate, simply must do more”?
- Families need to share responsibility for the decline of the Public School System
- We the people must hold our leaders accountable for their actions
- We must insist on reinstating consumer protections enacted after the Great Depression like Glass-Steagall or be prepared for a repeat that is closer than 99% of Americans realize
- We must remove any elected official from office who owes more allegiance to an arm-twisting oath from slick, wanna-be, political power-brokers than their oath to uphold the Laws of the Land and the good of all Americans
- We must stop the disintegration our business ethics and demand accountability from our elected officials who are supposed to serve the population not herd them like cattle
A liberal, capitalist democracy with a healthy, growing middle class can only prosper in a way of life where:
- ALL members participate in the cost of society
- The rule of law is respected and obeyed
- Information is reliable and accurate rather than what a targeted audience wants to hear and
- The playing field is as level as possible.
If we abandon ANY of the items above, we lose much more than self-worth.
We undermine a way of life and squander all that we have achieved since America’s inception on the world stage.