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IPFS News Link • Bill of Rights

Joseph E. Stiglitz: What has become of the rule of law in the US?

Part of the rule of law is security of property rights - if you owe money on your house, for example, the bank can't simply take it away without following the prescribed legal process. But in recent weeks and months, Americans have seen several instances in which individuals have been dispossessed of their houses even when they have no debts. To some banks, this is just collateral damage: millions of Americans - in addition to the estimated 4 million in 2008 and 2009 - still have to be thrown out of their homes. Indeed, the pace of foreclosures would be set to increase - were it not for government intervention. The procedural shortcuts, incomplete documentation and rampant fraud that accompanied banks' rush to generate millions of bad loans during the housing bubble has, however, complicated the process of cleaning up the ensuing mess. To many bankers, these are just details to be overlooked. Most people evicted from their homes have not been paying their mortgages, and, in most cases, those who are throwing them out have rightful claims. But Americans are not supposed to believe in justice on average. We don't say that most people imprisoned for life committed a crime worthy of that sentence. The US justice system demands more, and we have imposed procedural safeguards to meet these demands. But banks want to short-circuit these procedural safeguards. They should not be allowed to do so. To some, all of this is reminiscent of what happened in Russia, where the rule of law - bankruptcy legislation, in particular - was used as a legal mechanism to replace one group of owners with another. Courts were bought, documents forged, and the process went smoothly. In America, the venality is at a higher level. It is not particular judges that are bought, but the laws themselves, through campaign contributions and lobbying, in what has come to be called "corruption, American-style".

2 Comments in Response to

Comment by Ned The Head
Entered on:

Think we'll hear them say the law is too big to uphold?

Comment by Powell Gammill
Entered on:

Yes, and you are about to see over 400 years of legal precedent of the concept of deed and title tossed out by the ruling kleptocracy protecting the crooks.