Getting Away

In this world, everybody kept up the con practically until they were in cuffs. It made financial sense to do so: the money was so big that it was cost-efficient (from a personal standpoint) for executives to chase massive short-term gains, no matter how ill-gotten, even knowing that the game would eventually be up. Because you got to keep the money either way, why not?
~ from Chapter 3 of Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America by Matt Taibbi ~

This quote is in specific reference to the mortgage scam that has gripped this country for the last 5 to 6 years, but it could easily be about ANY of the quasi-legal scams Wall Street has perpetrated on the American people over the last two generations or so. It underscores WHY a new scam is trotted out on the heels of every former scam: for the most part, the grifters get to keep the lion's share of the money!!!

How many times have we seen some financial big wig pulled before Congress to try to explain their part in blowing up the economy? These folks may get yelled at by Congresspeople, be featured in not-so-complimentary reports in the mainstream media and incur public wrath in the form of protests and demonstrations against their companies or themselves personally, but, at the end of the day, they get to walk away with the vast majority of the wealth they have bled from the rest of us.

Average Joes and Janes often feel a sense of righteousness when one of these miscreants is handed a fine of several hundred thousand or even a few million dollars. The numbers look good in newsprint...until you dig below the headline to discover that the "hefty" fine represents a bare smidgen of the ill-gotten gains.

We see this same dynamic at play in the world of professional sports. An athlete, who is pulling in $5 - $10 million per year, is chastised by the governing body of the sport for some misdeed. A big deal is made out of the whole fiasco and, to prove the seriousness of the offense, we're told that a substantial fine will be levied to send a strong message.

And how strong is the message? A $5, $10, $20 or up to a $50,000 fine. To average folks, that sounds substantial. For many of us, we're talking about 1 or 2 years' pay. But a $50,000 fine to someone making $5 million per year is the same as taking one penny from a dollar bill!! It is less than a slap on the wrists.

Whether you are a professional athlete, hedge fund manager or Wall Street financier, if the penalties for being caught engaging in misdeeds is so lax, you most likely will figure this into your calculus. It turns out to be far more lucrative to thumb your nose at the rules and pay the chintzy little fine, IF you get caught at all.