Here’s the chart of the day, from Syracuse’s Transactional Records Access Clearinghouse via The New York Times’s Catherine Rampell:
Prosecutions of financial-institution fraud have plunged over the last two decades, and are running at roughly one-third the average pace in the 1990s, even as overall prosecutions have more than doubled.
The biggest fall was under George W. Bush, but prosecutions have continued to slide under Barack Obama, despite the orgy of corruption during the housing bubble and its subsequent collapse.
— Related, in a sense, Jeff Madrick compares today’s top 0.1 percent to the robber barons of the late 19th century:
This runaway at the top is different from other periods of great inequality, like the late 1800s. Back then, the Robber Barons may have kept money due to monopoly advantages and their power over workers. All the while they were adding to GDP by building oil and steel giants, railroads, and mass production companies from chewing gum to cars.
Today’s people at the top exploit workers in somewhat different ways. There is constant pressure to keep wages down by CEOs in order to push up stock prices. This is the modern-day Robber Baron equivalent. Corporate takeover and leveraged buyouts have had the same effect: they build up cash flow by cutting expenses in order to pay off the debt they took on for their huge acquisitions. This is how Wall Street helps creates a culture in which it is considered okay for a company to fire workers while giving its CEO a giant raise.
But much else of what happens on Wall Street has nothing to do with the real economy, except to waste hundreds of billions of misdirected savings that are plowed back into useless speculation and casino-like gambling on trades among themselves. As we have seen, it was this kind of reckless trading that fueled the credit crisis and the collapse of investment houses like Lehman in 2008
— The Wall Street Journal’s Jess Bravin has a good page-one story on how a decade-old law is pitting religious groups against cities and businesses by giving it preferential treatment on zoning issues:
Such battles are playing out across the U.S., from Litchfield, Conn., where officials argue that quintupling the size of an 1870s building to house a synagogue would mar the historic downtown, to Yuba City, Calif., where a county supervisor opposed a Sikh temple in an agricultural zone for interfering with the “right to farm.”
In each case, the arguments are much the same: The religious group says federal law entitles it to do what its faith commands on its property, while cities, fiercely guarding their zoning powers, resist federal interference in decisions that affect local character and economic development.
The issue touches on some of America’s fundamental legal principles. The Constitution limits Washington’s power over state and local government. Yet it also grants Congress authority to enforce fundamental rights, including freedom of religion, and to regulate interstate commerce, which courts have interpreted broadly.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at email@example.com. Follow him on Twitter at @ryanchittum.
Tags: Inequality, Jeff Madrick, The New York Times, The Wall Street Journal