LOS ANGELES -- In this country, you are innocent until proven guilty. OK, so Bernie Madoff is a criminal. But a lot of other people on Wall Street and beyond are only crooks -- so far.
For some of us of a certain age, sitting down with the Sunday newspaper is a relaxing habit that will not be replaced by digital reality. But last weekend the papers provided little but heartburn. And heartache, too. Whatever happened to honesty? Decency? Trust?
Goldman Sachs, the crown jewel of Wall Street, is charged in a civil fraud suit brought by the Securities and Exchange Commission with deliberately and dishonestly luring its clients into a gigantic scam. "Looting" is the term used by Paul Krugman, The New York Times economics columnist. Though the principals of the company call the charges "completely unfounded in law and fact," there seems little reasonable doubt that Goldman Sachs did promote and sell paper to its customers when it knew the stuff was worthless.
In fact, it seems that the buckets of aptly named "synthetic collateralized debt obligations" were nothing more than stacks of subprime mortgages on their way to foreclosure. And Goldman Sachs and a few valued clients had chosen those mortgages because they were sure to fail, then the banking house secretly created other paper betting on that failure.
If the above is not gracefully explained it is because I, like most Americans, don't understand it all. But I can smell. And this stuff stunk. Even so, there's a sucker born every minute, and the smelly paper ended up in the hands of misled pension funds and foreign banks, which lost billions of dollars in the process.
Reading and moving right along, it turns out that the federal government has indicted five former executives of Xe Services (the guns-for-hire company formerly known as Blackwater) for illegally purchasing automatic weapons and then filing false documents on the purchases to the government.
Below that, in smaller type, was a story about a town down the road from here, San Jacinto in Riverside County. State prosecutors have charged four of the five members of the city council with 56 felonies and 99 misdemeanors, including money laundering, bribery, fraud, perjury, conspiracy and filing false documents. All four of those charged have ignored demands that they resign from their elected offices. They may be headed toward prison sentences of up to 25 years, but they are still innocent (and powerful) until proven guilty.
Leaving San Jacinto to its problems, the Goldman Sachs and Xe cases indicate, at least to me, that our country is in real trouble at home. We're surrounded by crooks, and there is very little we can do as individuals. News media, old and new, can bring some of these cases to light. But as we all know, a lot of people don't trust the press in any of its manifestations.
And even if the press is suspect, it can only shout that the emperors of Wall Street and private armies have no clothes. Government has to take care of the rest. It's government that has cops and prosecutors charged with going after the crooks.
Because of nasty stories like these, increased government regulation of the finance industry and crooks in general is the issue of the day. Only government has the power to break open industries and corporations to let the rest of us see what has happened to America. But, in poll results released over the weekend, the Pew Research Center reports that only 22 percent of Americans trust the government "almost always or most of the time." That's about the lowest rating since polls began.
It seems then that we are between a rock and a hard place. Wall Street and other prosperous venues are going to fight like hell -- well-financed hell -- to prevent the rest of us from finding out what they are doing to us. Millions of Americans are already in trouble because of greed and lying across the country -- and there is going to be more if these folks are allowed to continue.
Whose fault is all this? Well, the scapegoating is well under way. But perhaps we are looking the wrong way. This could be called a financial crisis or a political crisis, but it is more than that. The United States is facing a moral crisis. And the most critical and disturbing question is this: Are we a nation of crooks?