Fountain-pen robbery, populism, and the 2008 election cycle

Hearings. Bill. Criminal penalties for banks and bank executives that don’t take active steps to keep their accounts from being used to rob old people of their life’s savings. Votes.
Really, guys, this isn’t rocket science.

Populism as a political phenomenon depends on the widespread belief that big institutions routinely screw people over, with the government either actively helping or standing by passively. They’re right, of course.

The problem with populism as a political stance is that big institutions have complicated ways of stealing, most of which don’t fit well into headlines. Most of the populist base consists of people who have very little capacity to tell a real screw-job from the economic version of a “moral panic” &#8212 a mostly imaginary grievance dreamed up by a cynical issue entrepreneur like Ralph Nader. So instead of demanding that the oil companies stop cheating the Federal government &#8212 that is to say, the rest of us &#8212 on their royalty payments, populist politicians love dumb schemes like gasoline price controls and excess profits taxes.

But that makes it all the more important that when there’s a real, simple, people-versus-the-powerful, they’re-robbing-us-with-a-checkbook populist issue, the Democrats should stand up and run with it. (That’s the big reason for going to some sort of public financing of campaigns: not to even up the money between the parties, but to allow Democrats to act like Democrats without worrying about not being able to compete in the next election cycle.)

Today’s New York Times story about the role of big corporations and banks in facilitating massive fraud perpetrated against the elderly presents the Democratic Congress with a golden opportunity. Let’s have some hearings quickly and get a bill with stiff criminal penalties in it on the President’s desk. (Somehow I doubt the Republicans would have the brass to filibuster.) If that means forgoing some contributions from the financial-services industry, so be it.

And of course this is an easy applause line for whichever Democratic Presidential candidate picks it up first. Sometimes political incentives work in the right direction.

Author: Mark Kleiman

Professor of Public Policy at the NYU Marron Institute for Urban Management and editor of the Journal of Drug Policy Analysis. Teaches about the methods of policy analysis about drug abuse control and crime control policy, working out the implications of two principles: that swift and certain sanctions don't have to be severe to be effective, and that well-designed threats usually don't have to be carried out. Books: Drugs and Drug Policy: What Everyone Needs to Know (with Jonathan Caulkins and Angela Hawken) When Brute Force Fails: How to Have Less Crime and Less Punishment (Princeton, 2009; named one of the "books of the year" by The Economist Against Excess: Drug Policy for Results (Basic, 1993) Marijuana: Costs of Abuse, Costs of Control (Greenwood, 1989) UCLA Homepage Curriculum Vitae Contact: