“Give a man a gun and he can rob a bank, but give a man a bank, and he can rob the world” — Unknown

Santa Claus seems to be barnstorming the halls of power in Washington, D.C., these days, given the feverish level of back-door maneuvering happening at the Capitol, at the White House and on K Street, the nation’s lobbyist mecca.

The result: The outgoing president has cut short the sentences of 1,023 inmates, more than the previous 11 presidents combined. As the Pew Research Center noted, Obama has granted more clemency than any president since Lyndon B. Johnson — and many believe he will accelerate his clemency push during his final weeks in office.

“What President Obama has done for commutations is unprecedented in the modern era,” White House counsel Neil Eggleston wrote recently in a blog post. “The president is committed to reinvigorating the clemency authority, demonstrating that our nation is a nation of second chances, where mistakes from the past will not deprive deserving individuals of the opportunity to rejoin society and contribute to their families and communities.”

This deluge of mercifulness will certainly provide fodder for reporters, historians, and legal experts, among others. However, the bigger story — the one affecting every man, woman, and child in America every day — is the tale of the Wall Street and the big banks, and the hundreds (perhaps thousands) of pardons the soon-to-be former president never had to authorize or sign.

A Quick Look Back: the 1980s S&L Crisis

Anybody remember the Savings & Loans crisis of the 1980s and 1990s? If not, let’s take a quick look back.

From 1986 to 1995, nearly one third (1,043 out of 3,234) of the savings and loan associations in the United States failed.

History warns less governance and oversight is generally a bad idea when it comes to bankers and their ilk, and the same was true in the case of the Savings and Loan industry. New legislation in early 1980 intended to help “deregulate” the industry and allowed S&Ls to operate in much the same way as commercial banks, but without the same regulations and without FDIC oversight.

I think most remember how well that little piece of legislative experimentation worked out, and what action was required on the part of legal authorities in the aftermath.

Considering the thirty-thousand criminal referrals and the more than one thousand felony convictions, the taxpayers, it can be said, got their justice.

2008 Financial Crisis: The Crime of the Century

Even though the American legal system was experienced with the prosecution of bankers didn’t mean everyone in the DOJ food-chain was fully on board.

In the year 2008, when a bunch of so-called finance whizzes, motivated by greed and a lust for power, pushed the world economy to the brink of ruin, many thought the legal system would again step-up and drop the hammer on the latest crop of white-collar criminals and send another thousand or more to prison.

Unfortunately, almost nothing happened.  

As Newsweek reported in its aptly titled piece, “Too Big to Jail,” authorities had so much incriminatory evidence, they only needed to use it against an array of executives, bankers, intermediaries and mortgage advisors — and if they really wanted to “nab” them, the proceedings would be akin to shooting fish in a barrel.

The Newsweek exposé mentions a “richly and luridly detailed report of the Financial Crisis Inquiry Commission, which Congress sanctioned and then quickly tossed unread into the trash, shows that fraud was open, deliberate and endemic in the mortgage and finance world in the years leading up to the 2008 crisis.”

The financial crisis of 2008 was truly the ‘Crime of the Century’, and is, by all accounts a crisis every American continues to pay for to this day. Astonishingly, it was a fraud ultimately seventy (70x) times larger than the previous S&L crisis, yet only one (1) of the criminal bankers went to jail.

Remarkably, the man at the center of the prosecution of the S&L scandal, William K. Black, thinks he could have charged ‘thousands’ of bankers and Wall Street types, but President Obama and his Attorney General Eric Holder would have none of it. They instead, for years, assured everyone who made inquiries of the hundreds of prosecutions they intended to seek all the way up until October of 2012.

But the end of the re-election campaign was the end of that kind of talk.

Which I guess means, the ultimate presidential pardon is when politicians fail to enforce the laws of the land — when no real investigations are ever conducted, when no charges are ever sought, when no grand jury is ever impaneled, and when no trial ever takes place.

When you’re a corrupt, despicable, politically connected white-collar criminal, that’s the jackpot, and it doesn’t get any better than that.

Whose left holding the Bag?

Unfortunately, we, the citizenry, got stuck holding the bag, left paying for the cynical depredations wrought on by Wall Street and their political and judicial allies. Many have argued that pardons serve to undermine the criminal justice system, — I’ll leave that for legal scholars to decide — except to say the only thing worse is for criminals, their crimes known to all, who never see the inside of a cell.

With a few exceptions, Americans will have to live on less during their retirement years because politicians chose to put criminals (the bankers) ahead of the best interests of the people. They failed to do their jobs, and the wage stagnation, the near-zero rates of interest, and the uncertainty and volatility of the markets have all combined to work against the best interests of the retiree.

Americans have paid for this crisis with less job growth, with higher taxes and fees, and with the obligation to service the debt created to bail out the ‘too big to fail’ institutions — and they will continue to pay for the rest of their lives by having less to live on during retirement.

It is unlikely to be any different the next time, so we as individuals must seek guidance to minimize exposure of our assets, especially savings earmarked for retirement, from a political system that deliberately and knowingly puts the interests of the criminal element before that of the law-abiding citizen.

The recent disclosure at Wells Fargo Bank of a multi-year fraudulent account creation scheme is proof positive bankers have no fear of the law in America….But even if the bank took action and had 5,300 employees fired over the 2 million phony accounts, the question remains: What happened to the executives who oversaw the fraud in the first place?

Nothing, I guess. Or maybe, they were simply ‘pardoned’ by Wells Fargo’s senior management and shareholders.