A Fighting Chance

Kitty Calavita and Henry N. Pontell, “The State and White-Collar Crime,” Law and Society Review 28 (1994): 297, 302 (citing DOJ statistics). See this excellent graphic summary: “Two Financial Crises Compared: The Savings and Loan Debacle and the Mortgage Mess,” New York Times, April 13, 2011, http://www.nytimes.com/interactive/2011/04/14/business/20110414-prosecute.html?ref=business. In its related article, the New York Times notes: “Leading up to the financial crisis, many officials said in interviews, regulators failed in their crucial duty to compile the information that traditionally has helped build criminal cases. In effect, the same dynamic that helped enable the crisis—weak regulation—also made it harder to pursue fraud in its aftermath.” Gretchen Morgenson and Louise Story, “In Financial Crisis, No Prosecutions of Top Figures,” New York Times, April 14, 2011. See also Jed Rakoff, “The Financial Crisis: Why Have No High-Level Executives Been Prosecuted?” The New York Review of Books, January 9, 2014. Rakoff argues that the legal foundation was not difficult but that changes in government attitudes have made corporate accountability a lower priority.

pretty boring job: Before going to the FDIC, Bair was Dean’s Professor of Financial Regulatory Policy at the Isenberg School of Management at the University of Massachusetts—Amherst, and she had a background in the Treasury Department, the Commodity Future Trading Commission, and the New York Stock Exchange. She had worked for Senator Robert Dole as research director when he was Senate majority leader in the 1980s. She was an outspoken advocate for sensible rules and safer markets.

only one had a woman CEO: In 2011 and 2012, of the twenty commercial banks listed in the Fortune 500, only one had a female CEO (KeyCorp’s Beth Mooney). By 2010, there were no female CEOs of top commercial banks. See: http://money.cnn.com/magazines/fortune/fortune500/2010/industries/30/index.html; http://money.cnn.com/galleries/2010/fortune/1004/gallery.fortune500_women_ceos.fortune/15.html; Laura Petrecca, “Number of Female ‘Fortune’ 500 CEOs at Record High,” USA Today, October 26, 2011. Colleen Leahey, “Update: Fortune 500 Women CEOs Hits a Record 20,” Postcards (blog) CNNMoney, July 18, 2012.

more than three hundred small banks and credit unions had failed: By September 2010, about 276 small and medium-sized banks had failed, along with sixty-six credit unions. See http://graphicsweb.wsj.com/documents/Failed-US-Banks.html; http://online.wsj.com/article/SB10001424052748703499604575512254063682236.html.

pay down underwater mortgages: “Since the financial crisis began in September 2008, there have been approximately 4.5 million completed foreclosures across the country.” CoreLogic, “Core Logic Reports U.S. Foreclosure Inventory Down 33 percent Nationally from a Year Ago,” Yahoo! Finance, October 8, 2013. “In late 2009, during the worst of the housing market’s meltdown, 26% of all borrowers were underwater.” “By the end of June [2013], 7.1 million, or 14.5%, of mortgage borrowers remained underwater on their loans.” Les Christie, “2.5 Million Mortgage Borrowers No Longer Underwater,” CNNMoney, September 10, 2013.

well grounded in both law and economic policy: See “An Update on TARP Support for the Domestic Automotive Industry,” COP report, January 13, 2011. For example of news coverage, see Andy Kroll, “Auto Bailouts: A Success Story?,” Mother Jones, January 13, 2011. COP wrote that “unless they could raise billions of dollars in new financing, they faced collapse—a potentially crippling blow to the American economy that Treasury [at that time] estimated would eliminate nearly 1.1 million jobs.”

4 | What $1 Million a Day Can Buy

to burst into flames, the agency would put a stop to it: The CPSC recall system works to ensure speedy recalls of faulty products. The manufacturer has a responsibility to report any potential danger within twenty-four hours of discovering it. At that point, the CPSC begins an investigation into the danger posed. In the meantime, the manufacturer has the option to “fast track” the recall process by initiating a voluntary recall. If the manufacturer chooses to fast track, it gains voluntary recall status and avoids the stigma of facing a forced recall from the CPSC. Jennifer P. Toney, Brief Overview of the US Consumer-Product Recall System—Old and New, WeMakeItSafer.com, September 2, 2008, http://wemakeitsafer.com/blog/2008/09/brief-overview-of-the-us-consumer-product-recall-system-old-and-new/.

For example, there have been many toaster recalls, for a variety of reasons ranging from short-circuiting to failure to shut off. Most recently, in 2011 the CPSC announced the recall of a model where the toasters did not always pop up as intended, igniting the contents. Liz F. Kay, “CPSC Recalls Flaming Toasters,” Baltimore Sun, June 30, 2011.