Bankruptcy 2005 applied to Wall Street
In 2005 our congress passed a bankruptcy bill, crafted by the banking industry, to correct supposed problems with the then current law. Despite testimony from a wide range of experts ranging from bankruptcy judges and trustees to Harvard professors that the new bill imposed onerous conditions on people in dire circumstances and lead to many more families suffering financial ruin, our representative chose to believe their banker buddies and passed this turkey. After all, only a scumbag scofflaw would attempt to get out of their financial obligations, right?
The current crisis got me to thinking, what would happen if we imposed the same conditions on the bankers as they imposed on us in 2005? Would it look something like this?
- Banks would be required to show their tax returns for the past five years and all their financial statements. These would be gone over with a fine tooth comb and any irregularities promptly reported to the IRS. Income would be averaged for this five year period and arguments that they had no income to pay would be ignored. They made a lot of money over a five year period, so who cares if they say that they have no income or no assets?
- Lawyers hired to represent them in the hearings would have to sign a statement testifying that all the paperwork was accurate and true and that they agreed to be legally and financially responsible if it was not or if any errors were discovered. Ever.
- All officers and employees of the corporation would have their income and assets surveyed. If their house was deemed "too expensive" they would be required to sell it and move into a very modest apartment. They would be required to sell all their cars but one, and if it was anything above a Ford Taurus or equivalent, or if the payment was too high, they would be expected to get a clunker and drive that. There would be no allowance for maintenance or repair of their auto, as that would be taking money away from their creditors.
- All income of the corporation, its officers and employees would be the property of the trustee, with only an allowance for meager living expenses allowed. All other income would be sent to the creditors on a quarterly basis. Income tax returns would be given to trustee every year to make sure no one took a second job or received an inheritance. If the return showed extra income, this would be seized by the trustee. If the money was already spent, the judge would throw them out of bankruptcy protection.
- All officers and employees of the corporation would be subject to daily calls from the collection agencies that purchased debts from their creditors for pennies on the dollar. Too bad the law was changed to allow this, because the old law banning this sort of activity was" too restrictive" on the freedom of commerce. Hope they have fun talking with all those fun folks in India threatening their families with jail.
- And of course, lawyers get paid first.
I'm not trying to criticize the current effort going on in Congress. I just thought it would be funny if the bankers had a taste of their own medicine.