In two separate cases, the government now stands accused of overstepping its authority when it took extraordinary measures to prevent a financial meltdown in the fall of 2008. The Wall Street figures who are suing say their property was seized without compensation, in violation of the Constitution. One case was brought by Maurice “Hank” Greenberg, the legendary former chief executive of AIG who built it into the world’s largest insurer. Filing the other case is a group of hedge funds that bought Fannie and Freddie stock for pennies per share after the companies were put in government conservatorship.
So begins a June 7 Washington Post article by Steven Pearlstein detailing a pair of lawsuits currently wending their way through the federal courts, in which Wall Street players and hedge funds are suing the federal government for bailing them out back in 2008, when they nearly detonated the world economy, a near extinction-level economic event from which the majority of regular folks are still recovering.
More than anything, I’m reminded of a character from one of my favorite movies, Bernie Bernbaum from the Coen Brothers’ gangster-movie masterpiece Miller’s Crossing. For those unfamiliar with the movie in question, Bernie is a minor bookie and grifter who, for reasons too complicated to get into here, finds himself in possession of some inside information about fights fixed by local gang-lords, and sells it to enough people it ruins the fix, leading said gang-lords to order his execution. In one of the greatest scenes in American cinema, the story’s hero, tasked with killing Bernie, shows mercy and lets him get away. “Somebody gives me an angle and I play it. It’s just my nature,” Bernie says. Later he shows back up to blackmail our hero. “You didn’t see the angle you gave me,” he says, echoing his earlier plea.
Now, I’m not qualified to speak to the merits of these cases (I’ll leave that to Pearlstein and his expert sources). But that’s not really what I’m about here. I don’t think I, or most folks I know, would find it surprising that some crazy high-priced lawyer might come up with some legal theory convincing enough to take this all the way to the Supreme Court (which I both expect, given the amounts of money involved, and fear, given the SCOTUS’ recent track record. But again, I’m not here to talk about the legal merits).
No, what I want to talk about is the mind-set behind lawsuits like this, because I think it provides a helpful illustration of the kind of behavior our current social and economic arrangements privilege and incentivize. Continue reading “Because Of Course They Did: Wall Street Psychopaths Sue Federal Government for Bailing Them Out”