When Federal authorities discovered that the bank HSBC had knowingly laundering money for both drug cartels and terrorists groups, most of the world expected quick indictments to follow.

Instead, unfortunately for justice, the United States Justice Department determined that arresting the guilty parties at the bank because of its size would somehow jeopardize the US and possibly even the global economy.

The same thing happened in 2009 when it was discovered numerous banks had been engaging in fraudulent practices that eventually led to the 2008 economic crisis. This time, the president decided not to follow up, and for the same reasons. 

Interestingly enough, the Huffington Post recently reported that the Federal Reserve admitted to maintaining an official government policy that big banks are simply “too big to fail.”

This is nothing new. In 2013, US Attorney General Eric Holder testified before the Senate Judiciary Committee on the issue. While being questioned by Senator Chuck Grassley (R-KS), Holder said:

“I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy and I think that is a function of the fact that some of these institutions have become too large.”

The most recent "revelation" came during another congressional hearing last week between William Dudley, president of the New York Federal Reserve Bank, and Senator Sherrod Brown (D-Ohio).  Dudley spoke openly about the policy of withholding prosecution in such institutions. The purpose of the hearing, according to the Huffington Post, was to “explore the cozy relations between federal regulators and the banks that they supervise.”

Elizabeth Warren

Perhaps Senator Elizabeth Warren (D-Mass) explained this relationship best in an op-ed that also appeared in the Huffington Post. While giving deference to the president in choosing his team, Warren sharply criticized his cozy relationship with the banks.

She specifically talked about Obama’s choice of Antonio Weiss for the post of Under Secretary for Domestic Finance at the Treasury Department. This particular position is responsible for overseeing the implementation of the Dodd-Frank Act, as well as consumer protection. Weiss has worked with a number of large corporations in the past, however, doing their tax inversions. Simply put, Weiss taught corporations how to avoid both paying taxes and following regulations, and he is now in charge of drafting those regulations.

The fact is, however, that “banks” do not commit crimes; people commit crimes. Despite what the Supreme Court says, corporations are not people, because they cannot be jailed for crimes. When bank employees step outside the law, the bank is not committing a crime. The individuals who planned and perpetrated the crime are responsible. The idea that arresting and convicting a dozen or so individuals for committing crimes could jeopardize an entire business that has tens of thousands of employees is completely ludicrous. The bank could simply hire new officers and move on.

It is not difficult to find answers to the question of why the government takes such an unreasonable position. We need to look at two things: One, the financial contributors to the person responsible for appointing the regulators; and two, the people whom this person appoints.

According to Bloomberg, the president’s top contributors were JP Morgan, Goldman Sachs Group, Wells Fargo & Company, and Chase & Company. In January 2013, Obama appointed Jack Lew, a former top CitiGroup official, to the post of Secretary of the Treasury. He also appointed Nathan Sheets, who also worked for Citigroup, to the treasury’s highest position for international finance. For the number two spot at the Federal Reserve, Obama chose yet another Citi official, Stanley Fischer.

This is the main problem with centralized institutions. People run them, and they have their own agendas, which may not be in the best interests of everyone else. The fact that big banks pool so many financial resources should shock more people. They openly bribe public officials with campaign contributions, including officials in the White House, and after they make the payoff, their own employees are put in place to “oversee” their institutional activities. This can only be compared to the criminals guarding the police stations.

We need to keep in mind that everyone who works in a bank, even at high levels, is not a criminal. At the same time, people with criminal intentions do seek positions of power. This is why decentralization of our financial system is so vitally important.

Campaign contributions by the banks, which keep them protected from prosecution, would not be possible without the enormous amount of resources our business gives to them. If everyone would just take half of their assets and put them into any one of the decentralized currencies, we could eradicate, or at least lessen, the power that centralized institutions can have.

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