One thing the financial press doesn’t much pretend to be neutral about is “free trade.” They love that stuff.

See for instance, this Wall Street Journal headline this morning:

U.S. Hit By Trade Setback

See, some of us—most of us!—don’t think the U.S. got “hit” by any “setback” by not making a free-trade pact with South Korea. We always seem to lose when those things get signed.

The top 1 percent and capital benefit spectacularly, which is why I’m pretty sure the Journal doesn’t write something like “U.S. Workers Avoid Setback On Trade Deal.”

— Matt Taibbi famously said Goldman Sachs was “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” Goldman was a stand in for Wall Street and the financial industry more broadly, which went from sucking up 10 percent of all corporate profits in the Reagan ’80s to 22 percent in the Clinton ’90s to 34 percent in Bush Jr.’s first term. That’s bad for the economy as a whole, needless to say.

It’s always worth pointing that astonishing stat out, and Peter Coy does so in a Bloomberg column that discusses taxing the financial industry to rein it in. This particularly is something worth looking at closely (emphasis mine):

Maybe the answer is something more drastic than a transactions tax. As Matheson writes in the IMF document, there are other options for attacking debt-fueled speculation. These include demanding higher margin and collateral. Or taxing debt on the balance sheet, which would encourage companies to sell shares to pay down debt. Or limiting the deductibility of corporate interest payments so companies are no longer encouraged to load up on debt.

It’s been disappointing that the mainstream press, in the midst of a crisis caused by stone-cold stupid amounts of leverage hasn’t done much spadework on how the tax system incentivizes companies (and individuals) to load up on debt. This is a fundamental issue.

Felix Salmon (now the Peterson Fellow here at The Audit) has written quite a bit about this. We need more.

The New York Times’s Peter Lattman writes about how justice fizzled in the backdating scandal broken wide open by an awesome Wall Street Journal series a few years back.

When the first cases emerged in 2006, they looked like low-hanging fruit for federal prosecutors. The Securities and Exchange Commission and the Justice Department investigated more than 100 companies. Internal investigations by companies led to scores of financial restatements and dozens of executive dismissals.

But on the criminal front, the government had mixed results, winning several trials but also losing a number of prominent cases. In all, 12 executives across the country were received criminal sentences, five of them prison terms. The others were sentenced to probation.

The news peg is the sentencing of KB Homes CEO Bruce Karatz to probation after a jury convicted him of two counts of fraud, of lying to investors, and of lying to his accountants.

On Wednesday, Judge Otis D. Wright II criticized prosecutors in Mr. Karatz’s case. He sentenced Mr. Karatz to five years probation, rejecting the government’s request to send him to prison for six and a half years.

Judge Wright called the government’s sentencing memorandum “mean-spirited and beneath this office” for suggesting that sentencing Mr. Karatz to home detention in his “24-room Bel Air mansion” would suggest “a two-tiered criminal justice system, one for the affluent … and a second for ordinary citizens.”

Poor guy. And speaking of our two-tiered criminal justice system, that’s a good excuse to run Dave Chappelle’s classic skit where a black drug dealer does the “Trading Places” thing with a white corporate criminal. Enjoy:

Chappelle’s Show
Tron Carter's Law & Order<a>
www.comedycentral.com
Black Comedy
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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 rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.