3D1-08-Consequentialism is a major theory base in public administration ethics. Describe and compare the two primary consequentialist theories

MOYERS AND COMPANY: WHY WALL STREET MAY BE GETTING OFF EASY Bill Moyers This week on Moyers and Company. That deal between the Justice Department and JPMorgan Chase requires a second look.

Gretchen Morgenson If the Justice Department were being tough on Wall Street, they would be talking about bringing criminal cases against individuals who helped to perpetrate this immense crisis.

Male Speaker Funding is provided by Carnegie Corporation of New York, celebrating 100 years of philanthropy and committed to doing real and permanent good in the world; the Kohl berg Foundation; Independent Production Fund with support from the Partridge Foundation; a John and Polly Guth Charitable Fund; the Clements Foundation; Park Foundation, dedicated to heightening public awareness of critical issues; the Herb Alpert Foundation, supporting organizations whose mission is to promote compassion and creativity in our society; the and Bernard and Audre Rapoport Foundation; the John D. and Catherine T. MacArthur Foundation, committed to building a more just, verdant and peaceful world.

More information at macfound.org; Anne Gumowitz, The Betsy and Jesse Fink Foundation; the HKH Foundation; Barbara G. Fleischman and by our sole corporate sponsor, Mutual of America, designing customized individual and group retirement products, that is why we are your retirement company.

Bill Moyers Welcome! You could not miss it here in Manhattan the other day, the big, bold headline across the front page of the tabloid, New York Post, screaming one of those sick, slick lies that are a trademark of Rupert Murdoch's right wing media empire.

There was Uncle Sam, brandishing a revolver and wearing a burglar's mask. "Uncle Scam," the headline shouted, "U.S. robs bank of $13 billion." Say what? That my friends, is pure whitewash and Murdoch's minions know it. That $13 billion is the settlement the country's biggest bank is negotiating with the government to settle its own rip-off of American homeowners and investors, those shady practices that five years ago have triggered the financial meltdown including manipulating mortgages and sending millions of Americans in the bankruptcy are foreclosure. And this is not the only scandal JPMorgan Chase is juggling. A six billion dollar settlement with institutional investors is in the works and criminal charges may still be filed in California. The bank is under investigation on so many fronts, it is hard to keep them sorted out. Everything from the deceptive sales and its credit card union, to Bernie Madoffs Ponzi scheme, to the criminal manipulation of energy markets and the bribing of Chinese officials, nor is JPMorgan Chase the only culprit under scrutiny.

Bank of America was found guilty just this week of civil fraud and eight other banks are being investigated by the government for mortgage fraud. No wonder Wall Street's camp followers at Fox News, the Wall Street Journal, CNBC and other cheerleaders have ganged up to whitewash the banks. This could be the biggest egg yet across the smug faced on untethered, unchecked, unaccountable capitalism.

Let us sort this out with some who covers Wall Street without fear, favor or flaming headlines. Gretchen Morgenson has been called the most important financial journalist of her generation.

She won the Pulitzer Prize for her tough journalism and her fair game column for the New York Times combines old-fashioned, shoe leather reporting with hard-won knowledge to help the rest of us understand finance both high and low.

I recommend her most recent book written with Joshua Rosner, "Reckless Endangerment." Welcome back.

Gretchen Morgenson Thank you so much, Bill.

Bill Moyers Is the Justice Department finally getting tough on the banks?

Gretchen Morgenson I find it hard to use this $13 billion settlement number that JPMorgan Chase is entertaining as evidence of the Justice Department being tough on Wall Street. If the Justice Department were being tough on Wall Street, they would be bringing criminal cases. They would not be talking about settlements.

They would be talking about bringing criminal cases against individuals who helped to perpetrate this immense crisis.

So, to say that $13 billion is, "Finally, the Justice Department is getting religion," I am just not a buyer of that.

Thirteen billion sounds like a lot of money, but to JPMorgan Chase, who over the past five years has made $75 billion, that is net income, he does not want to part with it, believe me. But it is not a huge number.

Particularly, if you were to look at what the sense on the dollar is of what they are paying to get out of these liabilities, people who had lost money in these mortgages, the people who lost their homes are ... the numbers are far larger than $13 billion. This is a number that has been struck as part of a deal that may or may not be agreeable to most of the parties at the table, but it is not a killer number.

Bill Moyers The Wall Street Journal and others are saying that what the government is doing is a witch hunt. They are shaking down JPMorgan.

Gretchen Morgenson There is no doubt that there was wrong doing. They would not be at the table negotiating if there was no wrongdoing. And it is just a matter of what price each party is willing to pay or receive. So, a shakedown to me would seem that J.P. Morgan was innocent of any of the accusations, and we know that not to be true, because of what has come out in the private litigation, because of what we have seen in the courts so far.

Bill Moyers Defenders of J.P. Morgan and of Jamie Dimon will say, "There were no criminal cases because there were no crimes." These guys were bending the rules just a little bit, that is the way the game goes.

Gretchen Morgenson Eric Holder in fact has said that. The behavior was immoral, the behavior was ugly, but perhaps it was not criminal. Well, I do not know about you, Bill, but I do not really have the confidence that the Justice Department did a sufficient investigation to be able to determine whether it was criminal behavior. Do you feel certain that they did the job that was needed to say, "Look, we have gone through all these many institutions that hurt so many people, that brought the economy to its knees, and we have determined through our thorough investigation that there were no crimes." I do not think there was a thorough investigation.

Bill Moyers Well, you wrote the other day that the federal judges seem to be losing patience with the banks.

How so?

Gretchen Morgenson There were a couple of cases that I highlighted because I though it did show a new direction, a new sort of aggressiveness. A lot of these judges, bankruptcy judges in particular who have to see the bank's treatment of homeowners who filed personal bankruptcy, they seem to really be getting fed up with some of the tactics that these ...

the hardball tactics that the bank's litigants are doing in their courtroom. They have had to witness so many cases of banks running roughshod over borrowers, whether it is by the banks not producing the documentation that proves that they own the note underlying the property, whether they produced erroneous figures about what the borrowers owed. I mean, they have just seen chapter and verse over the last five years of really bad behavior by these banks. And I think it is finally getting to them where they are saying, "Look, we used to be sort of a believer, or we would take the creditors point of view, now we are starting to wonder about that and really take the borrower's side." Bill Moyers Well, Bank of America was found guilty this week of civil fraud. Is it conceivable to you that Jamie Dimon of J.P.

Morgan could be negotiating with the Justice Department because he does not want to go to a trial by jury in which the bank would be found guilty?

Gretchen Morgenson I do not think any financial institution, Bill, wants to go before a jury nowadays.

I am sure you meet people everyday as I hear from them everyday about how upset they are, disturbed they are by what they have seen in their own lives, that what the banks have done. So, I do believe that no financial institution wants to be ...

had any of these aired before a jury.

Bill Moyers I actually talked to a man on the street this morning, and it was a man in the subway. And he said to me, "I try to follow this, but it is so complicated. The issues are so arcane, the ice glaze over." What would you say to him about why he should keep trying to pay attention? What are the stakes for people like that?

Gretchen Morgenson I think what this really underscores is two things. One is, that we are still in a situation where these large financial institutions are just too big to manage, and they are still threatening the populous. We have really not fixed too big to fail.

And so, until we do, until these institutions can no longer threaten the tax payer with a possible bailout, then that is something that people really need to watch and care about.

But the other thing that I think this underscores is, the degree to which these large financial institutions lost their way in the years leading up to the crisis.

Finance at its best should be positive. It should be something that helps people, whether it is helping companies hire more workers to produce something that people want to buy, whether it is helping homeowners to get a home and to keep the home, not to have an exploding interest rate that they cannot afford, constructive finance, right? But what we saw and what these $13 billion also indicates is the destructive nature of finance in the early 2000s and continuing. I mean, the idea of putting together a mortgage security that was designed to collapse in pieces, in heap, is just a new low in my view. It is not constructive. That is not constructive finance.

Bill Moyers We had Goldman Sachs and others who were playing their own customers off against each other, putting the interest of the institution, the executives and the managers ahead of their clients.

Gretchen Morgenson I call it "me first-ism".

I mean, and you see it just all over the place. So, I think that is what we really need to take away from this. And people can dispute whether 13 billion is enough, or whether J.P. Morgan and Jamie Dimon should feel... that we should feel sorry for them because they have to pay these amount. By the way, the shareholders are paying it, not Jamie Dimon. Nobody is paying for it who were actually on the scene of this particular bad acts remembered. So, instead of focusing on the number, whether it is fair, whether the government is picking on J.P. Morgan, I think we just want to step back and say, "Look, this is an indication of what went wrong, how that went off the rails," and you cannot let it happen again.

Bill Moyers It strikes some people thatJ.P. Morgan,Jamie Dimon, the board, the directors, the top executives are using other people's money, the shareholders money to buy get-out-of-jail free pass or to hide their own misconduct.

Gretchen Morgenson Well, it certainly is true that none of the top executives are paying the price for any of these mortgage infractions. They certainly were not paying the price for the six billion dollar loss in the so called "London Whale" episode. In that episode, there was manipulation of the market by the traders at J.P. Morgan to try to help their position because it was going so wrong for them.

Now, Jamie Dimon did not take a bonus last year, and that was talked about as a punishment for not having managed properly this six billion dollar problem.

But it really does not become accountable. You are not accountable if you do not have to pay the price for some of this behavior.

Bill Moyers Do you find it remarkable, Jamie Dimon asking for a personal meeting with the Attorney General, Eric Holder to decide in private on a penalty? Michael Hirsh in the National Journal calls it a "personal summit meeting," and he goes on to say that these negotiations would only have been possible if the government of the United States is itself afraid of disturbing the operations of the bank. That as you have said, the Attorney General himself thinks J.P. Morgan is indeed too big to fail.

Gretchen Morgenson It seems unusual to me, and it does smack of favoritism, special treatment. It certainly was unusual, I would say for Eric Holder, the Attorney General for the United States of America, to have a personal meeting with someone that his office is negotiating a settlement with. That raised eyebrows with me. I know I would not be able to get that meeting if I asked and if I implored, no. So, I mean I think it really sends a signal also which is disturbing that again, two sets of rules in America, there is one set for the people who are in positions of power, certainly in the financial world, one set of rules perhaps for them.

One set for the rest of us.

I really do not understand why Eric Holder could ... would not have decided that it was the optics. Just did not look that good for him to meet with Jamie Dimon, but maybe there is something behind it that I do not know.

Bill Moyers Well, as you know, settlements by their very nature benefit both parties to some degree. Why do you think J.P.

Morgan is getting out of this?

Gretchen Morgenson Well, they get this PR out there that this is a huge number, and that they are the beleaguered bank.

But what they do get out of it in some cases is tax deductibility, certain aspects of settlements are tax deductible, and they can use that as a negotiating chip for the entire settlement if the Justice Department allows it. So, we are not clear yet on how much of this will be tax deductible.

That would certainly be a benefit to JPMorgan Chase, and it would mean that the tax payers are once again subsidizing this very profitable large institution.

Also, there is a sense that maybe we can put this behind us. We have paid the freight. We are ... we have been held accountable, but again, the problem with that argument is that it is the shareholders who were being held accountable paying the price, not the actual perpetrators.

Bill Moyers What I hear you saying is that the wrongdoing at J.P. Morgan.Jamie Dimon's own failure to manage the offenses created by other executives and by traders and all of that. All of that cost, or much of that cost is being passed to down to taxpayers and shareholders.

Gretchen Morgenson Yes, that is correct. Bill Moyers That does not seem fair.

Gretchen Morgenson Well, that is our system unfortunately. Now, the Justice Department can say, "No, we will not allow any of these to be tax deductible." The tax rules do require that any kind of remuneration to say, investors who were hurt in their mortgage securities, or borrowers who were being given some sort of dispensation for the ... maybe, abusive tactics of the bank. That will automatically be tax deductible.

So, there is some element of it that is often really must. But, I think that... yeah, when you start to do the math and you see who is actually paying the price, it really is making the wrong people pay.

Bill Moyers As you know, Dimon has his defenders and they are all giving him his pass because as someone said, the company is a cash generating machine. You can get away with these things as long as you are producing a big profit, right?

Gretchen Morgenson Well, that is typically been the answer, and it explains away multiple sins as you know, Bill, such as overly paid chief executive officers. As long as the company is making money, the millions that they take home every year do not really bother people. There is something wrong with that argument.

Also, there is a lot of defenders saying, "Look, a lot of this 13 billion was the result of Jamie Dimon's purchase of Washington Mutual in the heat of the crisis, 2008, September, or/and its purchase of Bear Stearns, March 2008." And so really, it is not the bad behavior of J.P. Morgan, it is that he took on the liabilities of these two rouge enterprises and so now, he is paying the price. But he received a tremendous amount, number of benefits by acquiring both of these companies and essentially, a fire sale.

I think they had a two billion dollar benefit immediately from the purchase of WaMu. And in the purchase of Bear Stearns, they got a beautiful, almost brand new building on Madison Avenue. So, I do not think that you can simply say that because much of the 13 billion has to do with these two enterprises that Mr. Dimon purchased in the fire sale, that that means that it is really not a net benefit for him.

Bill Moyers He did not do it as charity. He did it because he calculated it would be a very good business investment.

Gretchen Morgenson Correct.

Bill Moyers So, help my audience understand why the directors and the managers do not have to cough up?

Gretchen Morgenson What shall we call it, the "$64 trillion question?" You have shareholders who were accepting the status quo with ... they are fine with. You cannot have change until you have the owner start to pick up the pitchforks and say, "I am not going to stand for this anymore. Someone has to be held accountable." We have not seen that yet, and so, the question is "Why?" Well, is it because you have these large institutions such as the mutual fund organizations that do not want to rock the boat? It is my money, it is your money that they are managing. I might like them to rock the boat, but they choose not to, perhaps because of their financial relationships with the institutions whose shares they own on my behalf.

So, there are many questions as to why shareholders have been so complacent about these directors. It is a real dysfunctional system all around. And until shareholders start to take action and say, "Look, we want accountability in the boardroom," and until you have people inside these organizations standing up and saying, "I would rather be in a business that provides constructive finance for people," rather than saying, "Oh, look at the profits in this kind of creepy thing that we could construct and sell to people without them knowing it." Until you have people on the inside who take that issue and say, "I want to be in the business of helping people, not hurting them," how is going to change?

Bill Moyers Gretchen Morgenson, thank you very much for joining me.

Gretchen Morgenson Always a pleasure, Bill.

Bill Moyers At our website, billmoyers.com, if you want to see citizens taking action, there is an exclusive video on how the impoverished city of Chester, Pennsylvania fought back when the last grocery store disappeared and left the town searching for a decent healthy meal.

Male Speaker The Fare and Square as far as a supermarket goes, it looks just like any other supermarket.

As a nonprofit, we would not be judged on profitability or a return on investment. We are going to be judged on how well we meet the needs of a community, and how well we provide a healthier purchasing environment.

Bill Moyers And Peter Dreier has made a brand new list of up-and-coming activists who are leading the grassroots movements for economic, social and environmental justice. Learn about this new generation and let us know whom you would add to the list.

That is all at billmoyers.com. I will see you there and I will you here next time.

Male Speaker Do not wait a week to get more Moyers. Visit billmoyers.com for exclusive biogs, essays and video features.

Funding is provided by Carnegie Corporation of New York, celebrating 100 years of philanthropy and committed to doing real and permanent good in the world; The Koh Iberg Foundation, Independent Production Fund, with support from the Partridge Foundation, a John and Polly Guth Charitable Fund; The Clements Foundation, Park Foundation, dedicated to heightening public awareness of critical issues; The Herb Alpert Foundation, supporting organizations whose mission is to promote compassion and creativity in our society; The Bernard and Audre Rapoport Foundation; the John D. and Catherine T. MacArthur Foundation, committed to building a more just, verdant and peaceful world, more information at macfound.org; Anne Gumowitz; The Betsy and Jesse Fink Foundation; the HKH Foundation; Barbara G. Fleischman and by our sole corporate sponsor, Mutual of America, designing customized individual and group retirement products, that is why we are your retirement company.

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Why Wall Street May Be Getting Off Easy Licensed under a Creative Commons Attribution 3.0 License.