Weekend Economists Mark D Day, 2014 June 6-8, 2014

[Demeter]

46. The way to stop corporate lawbreaking is to prosecute the people who break the law says Robert Reich

http://www.dailykos.com/story/2014/06/05/1304712/-The-way-to-stop-corporate-lawbreaking-is-to-prosecute-the-people-who-break-the-law-says-Robert-Reich?detail=email

Robert Reich, Professor of Public Policy, at the University of California at Berkeley, calls for holding more corporate executive lawbreakers criminally liable for corporate crimes in The Way to Stop Corporate Lawbreaking Is to Prosecute the People Who Break the Law

After reviewing allegations that GM, Credit Suisse, and Arthur Anderson broke the laws, receiving relatively trivial fines, which they consider part of the cost of doing business, Robert Reich notes that no executives have been charged with any crimes and suggests that until we start putting senior corporate executives in jail, we will see no diminution of corporate wrong doing.

For a decade GM had been receiving complaints about the ignition switch but chose to do nothing. Who was at fault? Look toward the top. David Friedman, acting head of the National Highway Traffic Safety Administration, says those aware of the problem had ranged from engineers "all the way up through executives." ...

Yet in neither of these cases have any executives been charged with violating the law. No top guns are going to jail. No one is even being fired.

Reich obviously wrote this prior to the late afternoon announcement of executives at GM losing their jobs. But, this announcement does not change the validity of his basic point. Relatively puny corporate fines are not a sufficient deterrent. The $35 million fine of GM is "peanuts" to a hundred-billion-dollar corporation.

Reich also thinks it is absurd to have corporations pleading guilty to criminal conduct, as Credit Suisse did, it means nothing. He notes that in the rare case of corporations being "executed" as was the case with Arthur Andersen, the wrong people paid the price - the 28,000 employees who lost their jobs had nothing to do with the crimes. The guilty senior partners skulked off to work in other accounting or consulting firms.

The truth is, corporations aren't people -- despite what the Supreme Court says. Corporations don't break laws; specific people do. In the cases of GM and Credit Suisse, the evidence points to executives at or near the top.

Conservatives are fond of talking about personal responsibility. But when it comes to white-collar crime, I haven't heard them demand that individuals be prosecuted.

Yet the only way to deter giant corporations from harming the public is to go after people who cause the harm.

I agree.

Some of Robert Reich's best writing has been on income inequality which has been one of his top issues for as long as I can remember. He apparently has a movie coming out about it in September, although this may be a spoof, joking that the topic of income inequality could make it to a movie coming to a theater near you in September. Maybe you can help me figure it out. Either way it seems like a clever way to call attention to a vital issue that gets way too little attention for its importance.