Bloomberg writes: “….We are told repeatedly that when Wall
Street’s deeply flawed incentive system leads to one bad outcome after another,
year after year, it will never happen again. Yet it does. And you can add this
vital business to the list: The way state and local government officials hire
Wall Street firms to raise the billions of dollars their municipalities need to
build schools, hospitals, airports and sewers, and provide other essential
services.
“For some reason, Wall Street never seems to get the message
that bribing government officials -- and paying each other off - - to get
access to lucrative municipal-bond underwriting business is illegal. Wall
Street has never learned this lesson because the miniscule price it ends up
having to pay for misbehaving has absolutely no deterrent value whatsoever.
“Indeed, what the cartel of the major banks does over and
over again to win underwriting business from local government officials, and
the way the cartel then sorts out among itself who gets what fees, is a
microcosm of a much wider problem of the increasing power that the Wall Street
survivors of the financial crisis have over the rest of us….
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