Six Counts of ‘Greed’?
August 8 | Posted by mrossol | Liberal Press, The LeftDo you believe ‘anything’?
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The Securities and Exchange Commission is doing a victory lap over last week’s verdict against former Goldman Sachs trader Fabrice Tourre, but its spin is revealing about the political motivation behind the case. Lead SEC prosecutor Matthew Martens keeps saying again and again that the case was “about Wall Street greed.”
Last time we checked, greed is not a crime under the securities laws or any other statutes in the federal code. The SEC did not charge Mr. Tourre with greed, or any other of the seven deadly sins. It leveled seven civil counts related to misleading investors about the nature of a transaction—charges that required only a preponderance of evidence to find liability, and it persuaded a gullible jury on six of them.
Which is where the “greed” comes in handy for Mr. Martens and his Washington comrades. Greed has existed since man committed original sin, and no doubt it has always existed on Wall Street and most other places. Greed in moderation might even be called ambition. While the media most often attribute it to bonus-seeking traders on Wall Street, greed can exist in other locations, too. Perhaps you have noticed how frequently prosecutors leave their government jobs for higher pay as corporate attorneys. Mr. Martens may eventually be one of them.
But for the Beltway, Wall Street greed is good—perfect, in fact—because it serves as an all-purpose explanation for the financial crisis. The word can help persuade jurors looking to find someone accountable as a symbol of the crisis. It is also useful because it absolves Washington of its pre-crisis sins. The same political crowd that encouraged Americans to buy houses with easy money and distorted incentives needs to blame the bankers for the crisis, and what better way than to assail their greed. The bankers played their role, but if you believe greed caused the crisis you’ll believe anything.
A version of this article appeared August 5, 2013, on page A12 in the U.S. edition of The Wall Street Journal, with the headline: Six Counts of ‘Greed’?.
Review & Outlook: Six Counts of ‘Greed’? – WSJ.com.
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