The day may come when the worst nightmare a crooked banker or compromised regulator can have begins with the words, "You have a letter from Senator Warren."
But before we get to that, here's an experience that may seem familiar: You're at a party or family get-together - a Sunday barbecue, perhaps - and someone says something like, "We need less government regulation." Next thing you know you're having an argument.Here's some advice for the next social event: There's no need to get into an argument. You can just ask, "How do you figure?"
With every unreasonable assertion you can ask a reality-based question like, "Where's the study that says that?" Once in a while they may cite a shallow white paper from sine right-wing foundation, but more often than that they won't even get that far. Soon the conversation will peter out with a "Well, uh ..."We can never go wrong asking questions. We only go wrong when we don't ask questions.
That's what makes this letter from Sen. Elizabeth Warren so important. For five years we've watched the Justice Department ignore overwhelming evidence of bank crime, on grounds that Attorney General Eric Holder made explicit only last March when he said that "the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute... it will have a negative impact on the national economy, perhaps even the world economy."
The Securities and Exchange Commission, which has responsibility for pursuing civil bank fraud, has taken the same approach. So has the Federal Reserve, which has regulatory responsibility for the banking industry. They've all been saying pretty much the same thing: That criminal prosecution would destabilize the financial sector and put the world's economy at risk.
With this letter, Sen. Warren is asking these agencies a very simple question: "How do you figure?"