“Now at this time of peril to your class and to your tribunal, when men are ready to attempt by speeches, and by the proposal of new laws, to increase the existing unpopularity of the senate, Caius Verres has been brought to trial as a criminal, a man condemned in the opinion of every one by his life and actions, but acquitted because of the enormousness of his wealth.

I have undertaken this cause as prosecutor with the greatest good wishes and hope on the part of the Roman people, not in order to increase the unpopularity of the senate, but to relieve it from the discredit which I share with it as a member of that class.

For I have brought before you a man, in whose case you have an opportunity by acting justly of retrieving the lost reputation of your judicial proceedings, of regaining your standing with the Roman people, and of giving satisfaction to foreign nations; a man, the embezzler of the public funds, the petty tyrant of Asia and Pamphylia, the thief who deprived the city of its rights, the disgrace and ruin of the province of Sicily.

And if you come to a decision about this man with severity and a proper respect for your oaths, that authority which ought to remain in you will cling to you still; but if that man’s vast riches shall break down the sanctity and honesty of the courts of justice, at least I shall achieve this, that it shall be plain that it was honest judgment that was lacking to the republic…

But now men are on the watch-towers; they see how every one of you behaves himself in respecting justice and observing of the laws. They see that, ever since the passing of the law for restoring the power of the tribunes, only one member of your class, and he, too, a very insignificant one, has been condemned.”

Cicero, First Oration Against Verres, 70 B.C.
There is a disturbing trend in the US where corporate executives are able to commit serious crimes such as money laundering and outright theft (does MF Global ring a bell) and escape criminal prosecution and even personal fines by hiding behind the personhood of the corporation and a wall of implausible deniability.

You can fine a corporation, even by levying a very large penalty when judged by individual terms. But that is just a cost of doing business for the company that is absorbed by the system and the shareholders that sustain it.  And in the case of the TBTF banks, they are being supported by an ongoing government subsidy of cheap money from the public.  And the management that actually committed the crimes is allowed to continue on without serious personal penalty.

This is a ‘live and let live’ attitude amongst the privileged class, a type of professional courtesy. This is the ‘CEO Defense’ in which managers are paid enormous, outrageous compensation for their skills, but when criminal activity is exposed, they claim to know and do very little for that pay, and in fact claim to be barely involved with the business that they manage. This is not capitalism, this is corporatism, a form of organized crime.

This is the moral hazard of the credibility trap. Because there is little doubt that HSBC management has done things for and with other very important people that makes them truly above the law.

This is the menace of entitlement and privilege. And what is most discouraging is how easily they can turn the righteous anger of the people at this injustice into an attack on the weak, the elderly, the children, the ‘other.’ And this is our shame, and our own complicity.

As a reminder from history, the privileged Senatorial class did not engage in serious and meaningful reform. And within ten years they saw the rise of powerful men like Julius Caesar and Pompey, who sought in every way to subvert the laws of the Republic and to subvert the good of the people in their favor. And in 49 BC Caesar crossed the Rubicon. And most will remember what followed after.

Is the American republic to be nova Roma, the new Rome?

“At that time many will falter, and betray and despise each other. And false prophets will appear and deceive many people. Because of the increase of wickedness, the love of many will grow cold, but those who stand firm to the end will be saved. And the gospel of the kingdom will be preached in the whole world as a testimony to all nations, and then the end will come.” Matt 24:10-14

HSBC Management’s Criminal Activity Above the Law: Justice for Some

The Fed did something on Wednesday: it announced a new program of open-ended quantitative easing, and it announced that it likely won’t pull back on the new round of monthly asset purchases once the economy begins to recover more strongly, but will keep the purchases going for some indefinite period of time afterward.  After what exactly was left unsaid.  The Fed apparently has a target it intends to overshoot, but hasn’t said exactly what the target is.  But whatever it is, we have been given forward guidance that the reaching of that unspecified target won’t stop the asset purchases – at least not right away.

This announcement has greatly pleased all of those people who have been calling for the Fed to do something.  Critics of Ben Bernanke have been deeply frustrated by the terrible lack of somethings emanating from the Fed.   If only something would be done, the economy would grow and jobs would come back.  The economy has been suffering from a something deficit!  Where is the doing that needs to be done?

Well something has now been done.  Hallelujah.  And many of Bernanke’s critics appear to have undergone a religious experience as a result.  Bernanke has been transfigured in their eyes from diffident nebbish into brave something-doer: an explorer of uncharted monetary territory boldly doing where no Fed has done before.  So the doing has been done – and it’s really something, isn’t it?

Yet when one reads accounts of how these asset purchases are supposed to accomplish their aim of generating a stronger recovery, one gets a lot of conflicting theories.  It’s almost as though the mere doing of something – anything – is thought to be more important than the actual nature of the something that is done.  But there is a common core running through most of these explanatory accounts: expectations.  The economic policy globe, it seems, turns upon the axis of our expectations, and the Fed is the master of those expectations.

Here’s how it works in theory:  Suppose there is something X the Fed would like to see happen. The Fed is supposed to make X happen by announcing that it intends to make X happen and that it is doing some other thing Y that is aimed at making X happen. The hope is then that a significant number of people think that there is a causal connection between Y and X, and that Y causes X.  They thus start to believe, on the basis of the announcement, that Y will in fact make X happen. And as a result of these beliefs, they then start to behave in ways that depend on the expectation that X will happen. And it is their behaving this way that in the end actually makes X happen – if the trick works.

www.nakedcapitalism.com-Shamanistic Economics