I would really like to see some statistical studies of this stuff. My impression is prosecutors have always been leery about going after the rich and powerful but things have indeed gone further that way in the last twenty years. So measuring exactly how much seems important here.

The thing is, the "regulatory revolving door", where ex-regulators are appointed to private industry, gives at least a strong proxy measure of intertwined interests of business and US government. It's always hard to be sure what a few even important cases mean.

A cynical view is that if someone is prosecuted, it's proof they're not that powerful.

Real power is of course to write the laws so what you're doing is not a crime to begin with. Ideally it's even subsidized by the government.

Stats would be nice... It's easy to remember a few top executives being prosecuted over 50 years, and hard to remember historical cases from the past 10 years.. because they are not historical yet.

>It's easy to remember a few top executives being prosecuted over 50 years, and hard to remember historical cases from the past 10 years.. because they are not historical yet.

That doesn't make sense.

Cases from the past 10 years should be easier to remember, because "historical" or not (this is a needless distinction here), they are (a) more recent, (b) more likely to have been written about in the news/social media/shows/etc one reads than older cases.

The use of "historical" here is a distinction that confuses more than illuminates. Even if "it's hard to remember historical cases from the past 10 years.. because they are not historical yet", it should be easier to remember big cases from the past 10 years, period.

Okay, I may have confused myself :)

I think the point was events always looks better at a distance..

> The thing is, the "regulatory revolving door", where ex-regulators are appointed to private industry

The usual term for that is “Regulatory capture”.

https://en.wikipedia.org/wiki/Regulatory_capture

Regulatory capture is the term for the regulatory body doing favors to the private industry -- not the term for the exact method for repaying them the parent described (hiring them after they're out of their regulating job).

And of course we will be surprised that highly educated, smart people who get their transactions reviewed by lawyers, and who do not need to do things that are obviously illegal to make money are less prosecuted than the rest of the population. But if they are wealthy it must be because they are dishonest!

Oh indeed,

And quite a few might be further surprised that even in an enterprise which needs to do some illegal things to make money, those at the top insulate themselves from any potential illegal acts and merely hire people to "do the impossible" and are simply happy when money pours in, "as if by magic" not asking exactly how this happens and even accepting assurances that nothing illegal has been done.

One scary side of this is that it appears to have led ordinary people who see the system as rigged to elect an “anti establishment” president who is even more zealously rigging the system. American politics needs profound change and brave new leaders with a new vision.

Is it a logically incorrect choice for many people thought? Say you have the establishment candidate says "tough shit" and you believe them because they are reliable. Then you have the anti establishment candidate says "im going to help you" and you value that at a 0.1% chance of happening because the candidate is incredibly unreliable.

Wouldn't you chose the anti establishment candidate at that point? Yea, he'll probably be just as shitty, but at least there's a chance? I'm against Trump but I'm not surprised at all that large swathes of America voted for him. You can't tell people to follow a system that garuntees their life will be worse in the future and be surprised when they lash out for any sort of improvement

How one can logically come to the conclusion that a guy making billions in highly regulated industry is actually anti-establishment.

Because the other side said they won't help you. It's like a lottery ticket at this point. No one at high levels of government is helping anyone, but you might think the unreliable guy could be the broken clock whose right twice a day.

Is this actually true? I was under the impression the establishment aka Hillary Clinton actually had a thorough report and plan of how to help America’s neediest towns most affected by the closing of blue collar work and factories.

I don't know anything about that report but it is also the same promise people have been hearing over and over for decades. Even if it is something that will actually help, how many people are going to believe it? How many have heard of any details about such a plan and would be able to recognize it's merit over all the bullshit they are usually fed? Im not saying its impossible, but most people do not have the interest level or knowledge to delve in at a deeper level with their own research to back up their political or economic ideas. They expect field experts to distill the information down for them and hear it through news and media.

I'm not saying you're wrong, but that argument is literally the opposite of OP's strawman of,

>Say you have the establishment candidate says "tough shit" and you believe them because they are reliable.

As a poster above alluded to, selling the status quo to people have suffered a loss of economic and social standing, is a losing political argument.

Even though I think the Democrats have more to offer, say, the rural communities in WI, than the Republicans, they cannot change the demographic and technological forces that are at the root of such voters disillusionment. The Democrats, for better or worse, attempt to stay tethered to objective reality.

Trump came along with grandiose promises of restoring the status of rural and working class Americans, and (apparently) some voters were so frustrated and angry that they voted for this imbecile.

Whenever I see “man on the street” style reporting on Trump voters, the voters themselves come across as imbeciles. I’ve seriously wondered if this was some kind of editorializing (maybe unconscious) by liberal news editors to make Trump voters look bad.

Really,they got nothing from Trump. Set aside all the culture war baggage, and the core argument of substance that Trump voters offer is that Trump is somehow going to “bring (good) jobs back.”

In reality, Trump has been a political wrecking ball, and is riding in the success of all the workers who actually keep America functioning. (In government and private sector.)

He had made everything worse that he gets his hands on.

Like half the population in the US, I keep wondering when Trump voters will wake up to see the naked buffoon, stomping on everyone he can as he fights for survival. I’m worried now they won’t, and we will see more people succumb to totalistic conspiracy mongering. (Like the Qanon fiasco.)

In the meantime, elite workers with the opportunity to exploit the system to their own benefit, will simply continue to do so.

CLINTON: If everybody’s watching, you know, all of the back room discussions and the deals, you know, then people get a little nervous, to say the least. So, you need both a public and a private position.

You neglect to mention that this was in the context of her "private position" being single payer healthcare, while her "public position" was more moderate.

Of course they neglect to mention it. It's not like they're arguing in good faith

Plans and such don't really matter to common people when Hillary is dropping lines like "deplorable" people referring to conservatives who hold outdated social views, AKA a lot of blue collar workers.

It's entirely a PR thing, which is something we talk about every day on HN. Your actual plan, while somewhat important, is dwarfed by how much people like and believe you. And the credibility of HRC regarding the welfare of people who hate the establishment was low to begin with and collapsed over the length of the election, mostly due to self-inflicted wounds, but also due to Trump being somewhat savvy in that regard.

It is absurd that we have Trump as president but it's not all that surprising. People shocked by it need to visit the Southeast a bit more and drive around towns.

Of course the not so sweet irony is that the Trump Administration defunded programs started by the Obama Admin to retrain coal (and similar dying sector) workers.

At least two presidents in the last 20 years (Obama and Clinton) were likely elected partly because of their good looks.

When has politics ever been about logic?

Do you have any sources or proof on this?

Judging from their record, that's about the only good thing they brought to the office.

He says it, and even if you don't believe him one bit saying it makes it a little bit true because you have now sent a signal to future candidates that the anti-establishment constituency can't be ignored.

Because his industry is not the only one, and he is just one (not even that big) fish among many. He could very well be unconventional and even anti-establishment.

I'm not saying that he is, but historically there are lots of examples of very rich and powerful people that have been anti-establishment and had fights with the regular elites or the state, etc.

In order to fix the system, first you have to convince everyone that there is a problem. Thanks to Trump, now pretty much all of the US unanimously agrees that there is a problem.

If Hillary had won, then the elites would be thinking that all is well and that the system works. Trump is a loud and clear message that things are not well and they need to change. Communicating that message is totally worth 4 years of bad political leadership.

The establishment media certainly hates him.

You can make an argument that replacing the old set of crooks with a new set is an improvement.

They go after the little guy now because typically he or she can't fight back and is deathly afraid of prison.

Yes. Guaranteed convictions yield inflated statistics, which bureaucrats then tout as evidence of their value and need for (greater) funding.

Paywalled, but excellent paper on this phenomenon: https://scholar.google.com/scholar?hl=en&as_sdt=0%2C10&q=low...

Prosecutors need to be given percentages of the judgments they win for the U.S. government against corporations.

It doesn't even have to be a big percentage, and it ends the revolving door. Let our prosecutors make a fortune by ending criminal corporate behavior. As long as it's decided by a jury, they still won't waste their time with sketchy cases.

If they retire early, so be it - there will be hundreds of people eager to fill the vacant positions.

We have plenty of laws borne out of outrage and a desire to punish the guilty. They usually create even worse outcomes: look no farther than seizure laws created during the War on Drugs for a perfect example.

Law enforcement can take any asset you have based on an allegation of criminality: not against you but the item itself! You get to prove the innocence of the item in court if you hope to reclaim it.

Of course those abusing that law know very well that the defense is far dearer than the item itself, resulting in your abandoning any claim to the item and net profit to law enforcement.

Now you want to reward prosecution with more perverse incentives? We used to say the power to tax was the power to destroy. These days the power to prosecute is the same, and sort of like I look at every piece of code with the idea "How will the cyber security red team abuse this?" we need to look at any potential law for abuse by over zealous prosecution.

The difference is most large corporations that are perceived as the largest problem all have their own legal teams, the average citizen does not and most couldn't afford a decent lawyer if they wanted. The cops win half the time just because they have a legal team and the other side doesn't and can't afford to hire one. If the average person had their own legal council then I don't think civil forfeiture would even be a problem, nobody would dare use it except in ironclad circumstances.

Big business will have no problems shrugging off any legal fuckery mainly because the other side knows how much harder any conviction would be.

Stuff like civil asset forfeiture is a problem because it weakens the due process requirements. Prosecutors would still be required to get a jury to convict before they could reap any rewards, so it would be a much harder system to abuse. (I wouldn't want prosecutors to get a cut from settlements, because then they could abusively intimidate defendants for profit.)

> I wouldn't want prosecutors to get a cut from settlements, because then they could abusively intimidate defendants for profit.

So then prosecutors will refuse to ever settle cases, even when settling is the best choice for all parties except themselves.

Settlements are a problem, though. This would probably be better than what the US has now.

Settlements are the result, not the cause. The problem most people face with the criminal justice system is how expensive it is to have competent representation. Not a dig at people who work as public defenders, they're just way overworked and without enough resources to do the job well.

This is an absolutely terrible incentive. They shouldn't be incentivized to seek criminal prosecutions, this will make them chase low-hanging fruit instead of chasing justice. They will become the equivalent of ambulance chasers.

Pay them very well and have their ability to bring justice be the key to keeping them in their position.

Agreeing with you but they're already incentivized to chase low hanging fruit.

A good prosecutor will dismiss charges when they see there is insufficient evidence of guilt.

What you propose will create the harmful incentive to always try a case. People lose years of their life, and tens of millions of dollars in legal fees, when defending themselves from criminal charges. So even if the person is ultimately acquitted, they will be still be damaged from the process.

And the government wins 93% of cases brought to trial: https://en.wikipedia.org/wiki/Conviction_rate#United_States

So anyone caught on the wrong end of a zealous prosecutor will be in big trouble.

The DoJ already creates harmful incentives by tracking how many convictions it gets, and striving to get more. That creates an institutonal culture that rewards aggressive prosecutors.

> Prosecutors need to be given percentages of the judgments they win for the U.S. government against corporations.

This would be horrible, in my view.

A legal system with selective outrage, fueled by monetary (or other power/political) incentives -- is a sure way to a broken and unfair justice system (which, in turn, would have disastrous consequences).

To make a common person equivalent, in legal power, to a corporation -- (so that a common consumer can fight effectively against a potential injustice),

what simply needs to be done -- is legislating a common contract law framework, so that a corporation cannot choose to a specific/tailored contract terms/escape clauses when providing service/product to a consumer.

(same for environmental accountability).

So that when I buy products (computers, health services, cars, etc) -- The agreement and liabilities I accept, are the same regardless of the business I created the contract with.

This way, reliance on mega bucks lawyers to 'favorably interpret' and to confuse jury -- will be eliminated.

Consumer Protection Laws are many and varies across jurisdictions, they are rather tough in various parts of the globe.

That would be asking for prosecutorial misconduct. They'll make a fortune by prosecuting crimes they invent.

That might not be the best strategy if you’re only compensated for wins. I could see a lot of downsides though — only going after slam dunk cases, hyper-focus on biggest potential payout cases, etc.

Aren't they doing that already to make their numbers look good? (Though of course a monetary incentive would probably shift the distribution from small easy to close cases to most profitable ones.)

I feel like you could just pay higher salaries with the same effect (and maybe less of the downsides of incentive structuring). But I agree on the premise, the revolving door exists because of wildly different compensation levels for the same job class / qualifications.

This has bugged me for a while. America is obsessive with one component of cost, but total cost of ownership suffers all the time because of it.

There's no "revolving door" for prosecutors. Time was that career prosecutors were in the minority (DoJ plus US Atty's offices). That is no longer the case. The result is that there's less experienced new blood and the groupthink of the inevitable bubble.

I agree with this, so many problems can be fixed with proper incentive structures.

The issue is the same as ML: the damn things will figure out how to misinterpret the incentive into something perverse, if given the chance. Even worse, they have the opportunity to influence the incentives, or change them outright, to give themselves the chance; and since the incentives have to change over time, to keep up with changes in the environment, any stable set of incentives is likely to become unstable in due time.

So incentives are alone not the answer; it needs to also somehow be self-stabilizing, and self-correcting, and also not be wrong (because such a structure would be difficult to fix, as its designed to be difficult to edit in the first place !)

So we can have jackpot-style prosecutions, like the jackpot civil lawsuit system we have now?

No thanks.

"The Chickenshit Club" is a good book. The prosecution team head made the point that if a white-collar prosecutor isn't losing some cases, they're not going after the hard ones.

9/11 and the Bush admin. All of a sudden all the feds cared about was terrorism.

This doesn't explain why the Obama administration did not bother persecuting bank executives.

And there was plenty to persecute then for (e.g. laundering money for drug cartels).

The main leverage prosecutors have now days is you are going to be financially ruined trying to defend yourself. Innocent or not it's a lose lose for normal people.

The prosecutor's don't have this leverage over the rich.

> The main leverage prosecutors have now days is you are going to be financially ruined trying to defend yourself.

which is the very epitome of injustice. Prosecution should be about finding out the truth, and finding out parties responsible for a wrong (and force them to make amends somehow).

Gov can have that power over the rich too. Gov will freeze all their assets, claiming they were gotten illegally, and then even rich people can't pay their lawyers. See Kim Dotcom, for example. It's not that gov can't prosecute the rich; they just don't want to.

Yes the Gov prosecutes the rich from time to time, but it typically only happens if one rich guy pisses off a bunch of other richer guys.

As is the case with Kim Dotcom.

The answer according to James Comey was a "chickenshit" culture wherein people were afraid to take on cases that weren't a slam dunk. And it was difficult to make a case that bank executives were guilty thanks to the complex structure involved.

Do you think there could be some semi-legitimate reasons for that behavior, beyond just laziness and cowardice? Cost is a big issue in the justice system. Of course, you should still go after murders (and other serious offenders), even if it's hard and costly.

At least some of the issues in our justice system stem from not having the resources to handle every case fairly. Every criminal case should be fully investigated and tried in court, but the system would break under these conditions.

So you end up with a highly perverse system based on extortion, and heavily biased depending on socioeconomic status. Sometimes it works "too well", other times it doesn't work at all.

Yes, and it's a problem that affects tech as well: KPI

When you award promotions based on, say, the total number or total percentage of successful convictions, then the whole culture starts to optimize for that. Given the sheer number of cases that could be pursued, naturally the easiest-to-win cases will be selected, and more often than not those are small potatoes.

Cost is the most important concern. Various factors add to it. Time taken to deliver justice, if it ever can be, is the major factor. The justice system is set up like a religion. Even a group of victims with a common influential adversary would find it difficult to carry on for decades with unwavering intensity.

Prosecuting someone for a crime like that is tough you have to prove out of the whole company that the people you're prosecuting actually committed the crime. That's hard because the nature of corporations is to diffuse responsibility and decision making.

They could have treated it just as any other type of organized crime. Start at the bottom and go up the chain of command.

There is a long list of "reporting requirements" for financial institutions, and a lot of these is about responsibility. Group heads have to sign for their group, department leads for their department, branch managers for their branch, etc. And the CEO of course is responsible for all the branches / departments.

This makes it possible to make a case out of ignoring warning signs, ignoring possible whistleblowers about illegal conduct, etc.

Usually the Oversight Authority should be able to set at least some rules of these reports to help them set up the right responsibility (and thus incentive) structure (both for prevention and for whistleblowing).

BS. European countries have prosecuted banking crime just fine.

Plus, we have Eric Holder on the record for saying he wouldn't go after bank executives because it could "hurt the economy", a reason I rank right up there with "terrorists attacked us for our freedoms."

Hmm care to show high level execs of say HSBC being prosecuted for money laundering?

He hired Eric Holder, who seemed to have significantly changed during his time at Covington and Burlington.

Holder wanted fines, not prison.

Yes, and the DoJ got a lof of DPAs (Deferred Prosecution Agreements) and billions of USD. And they spent that on various programs, that helped some very much in need, but not exactly those who the banks profited off of. And so a lot of people ended up feeling that the government did nothing for their plight.

I believe you mean prosecuting & prosecute, not persecuting & persecute.

Except that the article uses the Enron collapse and scandal as an example of prosecutors going after top executives, and that happened during the "Bush admin"

If I recall correctly, that momentum was lost by the end of the Arthur Anderson case, which was immediately after Enron.

Having Arthur Anderson on your resume should automatically result in that resume being thrown in the trash. No exception. I would rather entirely leave that off my resume and say I was homeless grifter than admit working for that firm

Didn't Enron go down before 9/11?

Sort of. The stock started to go down in the Summer of 2001, but they didn't actually declare bankruptcy until December 2001. The Enron scandal became widesread news in October 2001. So, 9/11 was actually first, at least in terms of the public consciousness. Much of Enron's fraud had happened before then but it wasn't really known. The indictments of the CEO, etc, didn't actually happen until 2004.

I'm pretty sure Bush and Cheney were hurting during the Enron scandal, then all that hurt basically disappeared after 9/11. At that point, if there was anything else to be heard about Enron, it wasn't going to be front page anymore.

Again, the scandal didn't really break until AFTER 9/11.

The SEC didn't announce it was probing Enron until October 22nd, 2001.

Ugh, my memories back then are really garbled then. Sorry about that.

Memory is funny, isn't it?

I would have sworn, before I wiki'ed it, that the Enron scandal broke YEARS before 9/11, certainly not just over a month after.

I remember the Arther Anderson case finishing up in 2002 because of the way some people I was working with that summer reacted.

I suggest reading Matt Taibbi's book The Divide, mentioned in the article, if you want a bit more context around Eric Holder and Lanny Breuer's involvement in this. He rests the 'original sin' at the feet of Eric Holder and a memo he wrote during the Clinton administration, as it outlined the collateral consequences doctrine embraced by justice department.

It also had the most fascinating account of Fairfax Financial and a group of traders who shorted the company before trying to destroy it.

Matt Taibbi is a crappy journalist that distorts the truth to fit his narrative. He's entertaining but not trustworthy.

It's worth noting that Fairfax sued the group of traders in that story but the lawsuit never went anywhere and was eventually dismissed.

Citizens United v. FEC is what changed. Essentially all elected officials are completely dependent on contributions now.

A party, candidate or prosecutor who makes contributors nervous has no chance of re-election.

The effect of Citizens United has become massively overstated. It lifted the prohibition on corporations (for-profit or nonprofit), labor unions, and other associations from spending money to communicate on political issues. It didn't change the rules on contributions to candidates or parties.

Isn't that just supporting/opposing the candidate by proxy? If a corporation creates a PAC favoring issue X which airs ad/buys social media exposure supporting the candidate who favors issue X, they have in-effect bought airtime for candidate X without any direct contribution to him/her. In this day and age, that kind of exposure is as good as paying the candidate.

Super PACs can buy attack ads. In binary elections, that as good as supporting the other guy.

But speechnow then effectively did, and that was basically just applying the framework of citizens united.

Just a couple of thoughts:

1. Prosecutors are afraid of losing and protracted court battles with all avenues of appeals pursued - making all but the slam dunk cases unattractive to pursue

2. A great deal of the acts the the public would like top executives to be prosecuted for when examined objectively typically are mix of moral shortcomings, Grey areas, and civil (rather than criminal infractions) - making them easy to try in the court of public opinion and less so in a court of law.

3. A lot of prosecutors don’t have the technical support to parse some do the data/complex aspects of the case - let alone make it digestible for a jury

* >>"Blankfein hired Reid Weingarten, a famous white-collar defense attorney...Weingarten was a friend of Attorney General Eric Holder; his children went to Georgetown Day School with the children of Lanny Breuer, head of the criminal division of the D.O.J. ...Weingarten pestered Breuer, saying, “Close this …case, will ya?” *

Curious: So how much would Blankfein be charged in a case like this? Saved at least tens of millions in lawyer fees and that's if he was found not guilty. Maybe his firm is hired to do legal work for Goldman but that can be problematic. $1 Million if the case dropped + hours worked?

I have no doubt this could have happened but what is Weingarten pestered Breuer, saying, “Close this …case, will ya?” is actually based on? I doubt this was done publicly. Also I doubt they would have an actual case against Blankfein GS has very strong legal team I have strong doubts Blankfein would have acted in a way that would put him personally into harms way.

If our legal system is working, and there’s adaquate detterances and incentives, then we should expect these cases to go down with time and celebrate that fact. I can’t read the article but I’m not sure if they address that.

Has anyone watched Billions_(TV_show) ?

The fox is guarding the henhouse, that's what changed. Stop voting up these corrupt right wing people and this will gradually get better. Until then it will get worse.

The SEC will have a great opportunity with Elon Musk.