Rule of Law Hurts Economy
MONEY PIT, GOLDMAN SACHS HQ – With the stocks of Wall Street’s largest banks suffering in the wake of the Federal Housing Finance Agency’s lawsuit, some market experts and government policymakers have recently criticized the rule of law as harming the broader economy.
“The question we need to ask now is if our fragile economy can really handle banks being held to the rule of law,” explained Julia Donders, Chief Economic Analyst for the Wall Street hedge fund Grayson & Associates. “I think the market has clearly signaled that suing the big banks for their allegedly illegal practices is not a good economic plan. Essentially, when it’s expensive and troublesome, the law doesn’t apply.”
Mrs. Donder’s further criticized the lawsuit as “terrible economic policy” that will make the markets “question the honesty of financial behemoths.”
The FHFA has accused many of the banks involved in the 2008 financial meltdown of misrepresenting the checks performed on mortgages before they were packaged into securities.
“This is just job killing big government at work. Here they are enforcing the law at a time when the American people and the economy can least afford it,” said Republican House Whip Eric Cantor. “President Obama ought to be ashamed of himself.”
Republicans have quickly closed ranks on the FHFA’s decision, stating that the rule of law has “never applied” to big banks precisely because it could “make the stock market jittery.”
Indeed, the United States federal government has upheld this tradition of immunity in the aftermath of the 2008 banking debacle.
When asked why the sudden policy reversal, Jeanne Melcomp, a spokesperson for the agency, state in a rather bewildered tone that “no one is above the law.”