Nobel Prize Winner Joseph Stiglitz Calls for Jail Time for Corporate Crooks

Re:Nobel Prize Winner Joseph Stiglitz Calls for Jail Time fo... by lkrubner on Saturday October 23, 2010 @01:59PM (#1823971)

My friend, fraud has been illegal for centuries. Stiglitz is asking for something new to be considered a form of fraud. Please take a moment and think about this clearly. If Stiglitz was simply saying "Fraud should be illegal" then this wouldn't be much of a story, since fraud is already illegal. But Stiglitz is saying "Gambling recklessly with credit should be considered a form of fraud." He wants to take a formerly non-criminal behavior and treat it as a form of criminal behavior.

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Re:Nobel Prize Winner Joseph Stiglitz Calls for Jail Time fo... by SkyMarshal on Saturday October 23, 2010 @02:51PM (#1824099)

Actually, in this specific case, some of the practices of Wall Street were previously criminal. For example, up until 2004 there were laws that limited bank leverage to iirc 12:1 (or was it 14:1?).

Hank Paulson lobbied for that limit to be removed, unsuccessfully in 2000, then successfully in 2004. That banks and financial entities were levered up to 30:1, 40:1, even 60:1 on toxic securities when the crisis occurred grossly exacerbated it.

So essentially, 'gambling recklessly with credit' was indeed, for a long time, illegal. It was only Wall Street's increasing influence in Washington that got it legalized.

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Re:Nobel Prize Winner Joseph Stiglitz Calls for Jail Time fo... by lkrubner on Saturday October 23, 2010 @03:00PM (#1824127)

Skymarshall:

Yes, but in the old days, if a bank went over the leverage limit that the government had set, then the bank got fined, and was required to rapidly deleverage. No one went to jail.

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