As legal action begins against the financial traders who acted to defraud the public in their maniacally profit-driven activities, finally the line is being cleared between a need to make profits and the role of ethical behavior in doing so.
For the past decade, the financial community slipped into a justification of any action, even criminal, as doing its job of working on the bottom line. That line was part of a criminal misbehavior, that defrauded the public routinely.
An economic collapse resulted throughout the world. Sadly, until the extent of the damage done became evident, our financial community passed off its criminal conduct as merely business friendly.
There has been a growing ethos in business activity that insists the public is getting in its way – creating a lack of confidence – by standards that establish safe conditions and employee concerns as worthy of anything but contempt. This very behavior has proved itself as drastically, and fatally, damaging to business as it eliminates the consumer from the consumer economy.
An epitome of the bottom line operation was the Madoff investment firm, that defrauded a large group of deluded investors. As long as the economy was sound, and investors looking for high returns kept popping up, it was feasible. The first undertow of fading profitability for the market took it down, like any pyramid that had to have continuing new investment to pay back those already taken in, and the fraud was soon evident. . . .
Swiss bank UBS is being sued for over $2bn (£1.3bn) amid claims it concealed the Ponzi scheme of fraudster Bernard Madoff that lost clients billions.
“Madoff’s scheme could not have been accomplished unless UBS had agreed not only to look the other way, but also to pretend that they were truly ensuring the existence of assets and trades when in fact they were not and never did,” said David Sheehan, a lawyer acting on behalf of the trustee, Mr Picard.
The lawsuit claims UBS and its co-defendents made approximately $80m in fees over several years from their work with Madoff.
UBS “chose to enable Madoff’s fraud for their own gain”, claimed the trustee, and the bank’s involvement gave the fraudster “an aura of legitimacy”.
The role played by enablers of fraudulent business extends to the ratings agencies that assured investors the toxic funds they were buying were solid, as well as to the promoters of shady dealings such as Madoff’s and AIG’s.
That the public is an inconvenience that should be sloughed off in the interests of profits is a huge, disastrous fallacy. The public is basic to any profit, as it is the potential client/consumer.
When the public trust is lost, the basis for our system as a whole is destroyed. Without trust in a lawful and valid financial system, the public will not take the necessary step of investing.
Formed to work back from the cliff of welfare for the rich, a group calling itself “Patriotic Millionaires” has formed as a lobbying group for sound financial policy.
Millionaires know how to work with numbers. And the Patriotic Millionaires are sharing a few numbers with members of Congress who might be interested in making policy based on facts rather than a hunch. For instance:
• Only 375,000 Americans have incomes of over $1,000,000.
* Between 1979 and 2007, incomes for the wealthiest 1 percent of Americans rose by 281 percent.
* In the 1950s and early 1960s, a period when growth was high and unemployment was low, millionaires had a top marginal tax rate of 91 percent.
* In 1976, millionaires had a top marginal tax rate of 70 percent.
* Today, millionaires have a top marginal tax rate of 35 percent.
* Reducing the income tax on top earners is one of the most inefficient ways to grow the economy, according to the nonpartisan Congressional Budget Office.
* Letting tax cuts for the top 2 percent—which were never meant to be permanent—expire as scheduled would pay down the federal debt by $700 billion over the next ten years.
It isn’t just philanthropy that shows knowledgeable wealthy business owners moving to re-establish legitimacy of a foundering system by returning from that credibility gap. Without a consumer base, the very business demanding friendly atmosphere even as it bankrupts our economy cannot exist.