Tuesday, January 14, 2014

Paying for the Crime and Still Coming Out Ahead

According to a Business report on the BBC News Web site this morning, in 2013 JP Morgan paid $20 billion in penalties to regulators over a variety of infractions related to the economic crisis, including its handling of the accounts of Bernard Madoff. Nevertheless its income during the final quarter was $5.3 billion. Now the bean-counters prefer to look at this in comparison to the same quarter in 2012, when the earnings were $5.7 billion, which means that they see only a 7.3% loss. For the rest of us, however, the idea of pulling in over $5 billion each quarter means that those punitive damages will be paid off over the course of a year. Furthermore, Morgan has enough skilled accountants to make things look like they are also recovering from that comparative loss.

Of course, for most of us the idea of having even saved a billion dollars, let alone earning more over the course of three months, is beyond imagination. The fact is that paying for crime is just another entry in the books of a large financial firm in which all the matters is that the books close on a large number in black ink. This takes priority over those for whom the prospect of steady and secure employment remains beyond reach.

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