Tuesday, August 02, 2005

24. There's all these rich business executives getting convicted now, like Martha Stewart - Doesn't that prove that the system is really working?

This is another topic that tends to mislead the general public, both in America and around the world. Yes, it's true that even in America, rich people are sometimes arrested and go on trial. Sometimes the executives of big companies get put on trial and go to prison for a long time. Supposedly, this proves that "the system works", because even some very rich people get sentenced and go to jail. And some of these rich people are executives of big corporations - doesn't that prove that the legal system is really "fair", because even the big corporate executives can face criminal charges?

But, once again, there is something behind the scenes here, that makes all of this very misleading. If you analyze the reasons that these executives are going to jail, you often find the same thing underneath the various cases. These rich executives, millionaires though they might be, generally got into trouble for violating the one set of "rules" that they were supposed to obey - loyalty to the shareholders and investors who own the big corporations of America.

Remember, the big corporations are not the same as the rich executives who run them, even though those executives might be paid many millions of dollars. The executives just work for the corporations, who are really owned by their shareholders. These shareholders are dominated by investors, who are the richest people and institutions in America.

When the executives are sentenced to prison for their fraud and other crimes, the basic reason behind it all, is that these people are accused of cheating the investors who put their money into the corporation. In other words, these executives did not provide good service to the really and truly rich people who owned their corporations. That's the story of the Enron or WorldCom executives. The government will talk about how these executives cheated average Americans, but that is just talk. What they really are angry about, is how these executives cheated America's millionaires and billionaires who owned stock in Enron or WorldCom or whatever.

America's richest people have their assets in stocks, more than anything else. That's why the government spends so many millions of dollars on regulation of the stock market.

As far as lawyers and judges go, there's hardly any regulation at all. Lawyers and judges can be criminals and perverts and lunatics, and commit a new felony crime every day of the week, and the government will do nothing about it. Especially if the victims are everyday average Americans.

But stock fraud? Play games with stock prices, that might slightly affect the profits of multi-millionaire investors? - That's where the government is very, very serious. Lots of officials may swing into action immediately, if you have broken any rules of stock-market trading. That was why they started going after Martha Stewart. Martha Stewart was rich, but she was involved in trading stocks that are also owned by other rich people, and that's something the government is very concerned about.

The prosecution of a few rich executives doesn't prove that the system works to protect the common people. It is just another case of how the government spends a lot more money protecting the big investors more than anyone else. The government is concerned that everything is "fair" and equal for the billionaires and big investors, and even rich people can go to jail if they do things to hurt other rich people, if they break the rules of loyalty to the big stockholders.

Beyond that, there are a few other trials of celebrities who are rich, but yet go on trial in some big media circus, accused of some crime or other. Many of these celebrities have some money, but are minorities or have no big political connections. If they had really good connections, made a lot of political donations, they often would never have been charged in the first place, some lawyer would have "fixed" the whole thing very quietly with the right government officials. Rich people who make big political donations in America, are sometimes able to commit quite serious felony crimes and get away with them, just by continuing to bribe politicians and judges.

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