Big Bank Failure

1088 Words 5 Pages
Morality is a necessary principle in all highly functioning societies. Without it, our societies, institutions, businesses, and lives can devolve into chaos and corruption. Morality is closely tied to the values of fairness, justice, and equality. The big bank bailout of 2008 significantly challenged our sense of morality by showing how inequality and injustice are alive and well in the banking world. More importantly, it showed us that social class often determines how individuals fare when institutions dispense with morality. The events that led to the 2008 recession and the big bank bailout are complicated and a result of misguided laws and poor governance. Both Congress and the financial sector bought the notion that real estate values …show more content…
The reality was that the bankers had not done anything actually “illegal” (Sorkin). Too Big to Fail, Andrew Ross Sorkin, 2009). Rather, what they had done was to take advantage of naïve people and “loose” laws. They misrepresented or miscalculated the risks of gambling with innocent peoples’ money by approving so many bad mortgages. They primarily were guilty of being excessively greedy, which was morally wrong but legally allowed. Individual homeowners, by contrast, mainly were guilty of trusting their bankers and of gullibility. The banks were so large and interconnected that their failure would have resulted in disaster for the global economic system. Thus, they were deemed “too big to fail.” Instead of criminally charging the bankers who were responsible, only people minimally related to the problem were charged. Only one financial executive faced actual criminal charges. The only bank allowed to go under was Lehman Brothers. Others, like Merrill Lynch, Bear-Stearns and many of the heavily leveraged mortgage companies were just bought …show more content…
Rawls' theory of 'justice as fairness' recommends equal basic rights, equality of opportunity, and promoting the interests of the least advantaged members of society. It is called the Equality Principle. In the first part of the book, Rawls asks: "If everyone was stripped of their privileges and social status and made entirely equal, what kind of justice system would they want to be subject to?” He concludes that the only logical choice is to pick a system that treats people equally, regardless of their race, class, gender, etc. The Great Recession of 2008 and the big bank bailout is a striking example of inequality in fairness and justice concerning social class. White collar criminals “crash" our financial systems around the world, causing tremendous disruption to world stability and come away unpunished while "an unemployed black person gets ten years for robbing a minute mart (Collins).” It is hard to see the fairness in that. The bailout challenged Rawls’ Equality Principle. Even though we have many freedoms and a constitution that says “all men are created equal” we still live in a country where consequences often are dictated by our social and economic

Related Documents