2014's fast food atrocities
Burger King's black cheeseburger: Made with squid ink and bamboo charcoal, arguably a symbol of meat's destructive effect on the planet. Only available in Japan.
It defies reason that we continue today to hear about major bank scandals, more than five years after the financial crisis. But if anything, the revelations are growing larger and more complex.
Which is why I am now making a modest proposal to force them to come clean. The way that countries enveloped in patterns of interminable abuse often deal with the aftermath is through something called a Truth and Reconciliation Commission. We need one for global finance.
Before I explain what that would look like, let’s look at a recent example of the problem. Right now, the Royal Bank of Scotland faces a criminal probe in England over cheating its business clients. The “Global Restructuring Group,” a division of RBS tasked with obtaining assets at bargain basement prices, forced tens of thousands of business customers who took out loans to sell their commercial property holdings at deep losses, leaving them destitute and owing millions in fees in the exchange. Author Ian Fraser rightly refers to it as financial terrorism. This systemic abuse comes from a bank that was effectively nationalized by the U.K. government at the time!
RBS and at least nine other global banks, including JPMorgan Chase and Citigroup, are also under investigation in the emerging foreign currency exchange (or forex) scandal. Much like the scandal with rigging interbank lending rates known as Libor, the banks control the information that establishes benchmark forex rates, and they could use that information to make massive trades timed just before the benchmarks went public, artificially spiking the rates. This raises costs for virtually anyone exchanging currency (a $5.3 trillion market in an average day), but creates profits for the banks. In the sleaziest detail, investigators have also found a years-long practice where currency dealers handed off money to day traders in parking lots in London, with the day traders making sure-thing forex bets on the dealers’ behalf, allowing the dealers to personally profit off their clients.
Law enforcement around the world, including the U.S. Justice Department, has promised harsh punishment for this new round of crimes. And the banks themselves have fired individual traders, claimed to revamp their operations, hired respected independent advisers to conduct internal probes, and sought discussions with policymakers on how to ensure these things never happen again. You can understand how this pattern feels like running on an endless treadmill. The financial institution gets caught committing crimes, it makes a big show of remorse, looks busy with internal investigations and changes to its compliance structure, and ultimately, after a lot of tough talk, government delivers the lightest of penalties. And then the whole cycle repeats itself.
This game, at least the way it’s currently being played, benefits nobody. The victims are not compensated anywhere close to the level of harm: Even the $104 billion still expected to come out of mortgage abuses does not approach the cost of the financial crisis. Individual bankers are by and large not held accountable for the crimes. The continuation of the misconduct – both of the above-mentioned scandals post-date the financial crisis and many “tough” enforcement actions – shows that no deterrent has yet kept an ever-larger financial industry from plundering the public. And governments are sullied by the loss of trust in their regulatory and enforcement capabilities.
So let’s institute a Truth and Reconciliation Commission for global finance.
Such commissions investigate prior wrongdoing, and exchange some form of immunity for the participants for a full airing of the crimes. For those immediately recoiling at the idea of immunity for Wall Street executives, understand that we already have that in everything but name. If you want to keep reading about doomed investigations that lead to nothing of value (like the four-year probe into manipulation of the credit default swaps market, just dropped by the Justice Department), then fine. But if you want the actual misconduct to be admitted to by the people who did it, a truth and reconciliation commission, just like in South Africa after apartheid or Argentina after the time of the military junta, is one possible method. Instead of taking away the liberty of these financial titans, at least we could take away the secrets to their success.
The first and most important outcome of a financial truth commission would be the acquisition of the complete pattern of abuse that led to Wall Street’s dominance, making it much more difficult for them to dominate again. Only on extremely rare occasions do subjects of a truth and reconciliation commission ever return to lead a country after the release of the findings. Since destruction of evidence is a feature of many current investigations, the commission, global in scope, could ensure the evidence is preserved and never forgotten.
The findings could guide future regulatory responses, essentially opening up Wall Street’s black box for regulators to prod. So often, banks exploit a knowledge gap between them and their overseers. After a truth and reconciliation commission, we could have a conversation in the open about what banking should actually look like, rather than having regulators feeling around in the dark to try to patch together a safety and soundness regime for institutions they don’t fully understand. This is preferable to a slow trickle of meaningless penalties. You could also structure the commission to grant benefits to victims, as they did in Chile to survivors of imprisonment and torture after the truth commission on the abuses of the Pinochet era.
This type of tribunal may even be palatable to the banks. More than anything, banks want a global settlement to put all the uncertainty of legal exposure behind them. When JPMorgan Chase inked its (not exactly) $13 billion settlement over mortgage-backed securities violations, its stock price immediately soared, to a level that actually covered its losses, because investors finally knew the price of misconduct. I doubt the financial industry would be extremely helpful with deconstructing their business models, but the combination of immunity and an end to the cascading investigations could be enough to draw them in.
We already tried something similar with the Financial Crisis Inquiry Commission. Its report, released in 2011, still holds value – most of the evidence in the JPMorgan settlement comes from a third-party mortgage evaluation company called Clayton Holdings that was thoroughly documented by the FCIC – but the continued revelations show that it was not comprehensive enough, nor did the commission have cooperation from the perpetrators. A global Truth and Reconciliation Commission could bring all of the industry’s practices to light, allowing the world to come to terms with the financial predators in its midst, and prevent a future repetition of the outcome.
As MIT professor Simon Johnson outlined in an article that still resonates years later, America has suffered from a Quiet Coup, with the oligarchs of the financial industry capturing our government and our economy. He concluded that the economy will not return to recovery without forcing those at the top of the financial food chain to take a hit. Four years later, the facts bear Johnson out; we have yet to fully recover, and financiers remain far too powerful.
Truth and reconciliation commissions are one tool used to handle a post-coup aftermath. They use knowledge as protection against a recurrence of the same terrible events. They rebuild trust in institutions, trust that is sorely missing in the public’s relationship to the banking system as well as government. And they reset conditions in a country, so that the citizens never again get duped into assuming their interests align with the coup plotters; in this case, so they never again believe that what’s good for Goldman Sachs is automatically good for America.
Domino's Specialty Chicken: It's like regular pizza, except instead of a crust, there's fried chicken. The company's marketing officer calls it "one of the most creative, innovative menu items we have ever had” -- brain power put to good use.
KFC'S ZINGER DOUBLE DOWN KING: A sandwich made by adding a burger patty to the infamous chicken-instead-of-buns creation can only be described using all caps. NO BUN ALL MEAT. Only available in South Korea.
Taco Bell's Waffle Taco: It took two years for Taco Bell to develop this waffle folded in the shape of a taco, the stand-out star of its new breakfast menu.
Krispy Kreme Triple Cheeseburger: Only attendees at the San Diego County Fair were given the opportunity to taste the official version of this donut-hamburger-heart attack combo. The rest of America has reasonable odds of not dropping dead tomorrow.
Taco Bell's Quesarito: A burrito wrapped in a quesadilla inside an enigma. Quarantined to one store in Oklahoma City.