Jamie Dimon, Chairman and Chief Executive Officer JP Morgan Chase and Co, left, and Axel A. Weber, Chairman of the Board of Directors UBS, right, gestures during a panel session on the first day of the 43rd Annual Meeting of the World Economic Forum, WEF, in Davos, Switzerland, Wednesday, Jan. 23, 2013. (AP Photo/Keystone, Jean-Christophe Bott)
Conservative politicians, including Mitt Romney in his presidential campaign, supported legislation mandating drug testing for recipients of federal aid, such as: the unemployed, families in assistance programs - in general, citizens down on their luck or in trouble. Interestingly, none of these politicians has suggested drug tests for executives whose banks benefit from billions in federal aid and bailouts.
Since 2011 (generally, at Republican insistence):
"seven states have passed laws mandating drug tests for [welfare] recipients, and in 2012 at least twenty-five other states considered proposals to tie welfare cash assistance, and in some cases also food stamps, to drug tests." (Source: The Nation.)
For example, in 2011,GOP Governor Scott of Florida signed a law requiring all applicants for that state’s welfare program to take a drug test. And in 2012:
"Congress passed a law paving the way for states to urine-test the recipients of unemployment benefits ... Since then, sixteen states have considered laws tying unemployment insurance benefits to drug tests." (Source: The Nation.)
Now in 2013, in response to various court decisions many observers are concerned that mandatory drug testing violated welfare recipients' constitutional rights:
"Rep. Fincher (R-TN) introduced a bill ... that would require states that want to receive full funding for welfare assistance to force its citizens to waive their Fourth Amendment rights and submit to random drug testing." (Source: ThinkProgress.)
One touted justification for drug-testing assistance recipients is that - people who've fallen on hard times because of drug problems shouldn't get a taxpayer bailout. In short, if people can't run their lives, or businesses, because of drug use - they shouldn't be subsidized with government money.
Speaking of people who can't run their businesses without a government subsidy - what about our banks.
Bloomberg News recently reported that America's banks receive a federal subsidy of about $80 billion/year, and that - without this subsidy - they would not be able stay in business. To put the bank subsidy in perspective, federal payments under the welfare programs and food stamps combined are about $70 billion/year.
Looking at the actions of our financial services sector, at least one plausible explanation may be that some bank executives were stoned out of their minds. Consider a few examples:
- The 2008 financial crisis - when, in addition to their annual $80 billion subsidy, our banks needed a $400 billion bailout.
- The collapse of Bear Stearns, Lehman Brothers and AIG.
- Five banks (Ally Bank, Bank of America, Citi, J.P. Morgan Chase and Wells Fargo) paid $25 billion to settle claims that they "routinely signed foreclosure related documents ... without actually knowing whether the facts contained in those documents were correct." Seriously, you'd have to be high as a kite, incredibly arrogant, or amazingly incompetent to think you could get away with this behavior.
- Money Laundering - "Credit Suisse, Lloyds Bank, ABN Amro, ING Bank and now HSBC - have reached settlements in the past couple of years with the U.S. government for billions of dollars in tainted transactions." For example, "between 2006 and 2010, the Sinaloa Cartel in Mexico, the Norte del Valle Cartel in Colombia and other drug traffickers laundered at least $881 million in illegal narcotics trafficking proceeds through HSBC". Since these banks were doing business, on a large-scale, with drug traffickers, did some bank executives perhaps try samples?
The actions of the financial services industry can only be explained by some combination of: bad luck, innocent incompetence, criminal intent, or significant drug use. Unless we ask our bank CEOs (and other senior executives) to "pee in the cup" - How will we know whether they "deserve" taxpayer assistance? If this seems far-fetched, it's been widely-reported that James Cayne, the CEO of Bear Stearns as it lurched into insolvency:
"sometimes smoked marijuana at the end of the day ... He also has used pot in more private settings, according to people who say they witnessed him doing so or participated with him." (Source: WSJ, Bear CEO's Handling Of Crisis Raises Issues.)
The banking industry has demonstrated an ongoing pattern of law-breaking behavior, wouldn't be profitable without a massive government subsidy, and is filled with credible rumors that senior bank personnel use illegal drugs. Further, a senior bank executive with a drug problem is in a position to do real damage to our economy, unlike the average person on unemployment insurance. If bank executives don't want to submit to drug testing - in exchange for Federal aid for their bank - they could always resign.
So why aren't our political leaders demanding that these corporate welfare recipients join other welfare recipients in mandatory drug testing programs? Let me offer a few thoughts:
- Political Donations - No one on food stamps makes substantial political contributions. However, America's financial services industry (broadly defined) donated $650 million to political campaigns in 2012.
- Future High-Level Jobs - Many of our current political leaders, and their staffs, are tomorrow's highly-paid lobbyists for banks. They might not want to annoy potential future employers.
- Class Bias - Our Congress knows and socializes with bank executives. But how many congressional leaders have shared a meal with a family on food stamps? Or lunched with someone who worked hard for 20 years, lost his/her job in the financial crisis, and now must "pee in a cup" to satisfy the whims of hypocritical politicians?
For a variety of reasons, I believe drug testing of aid recipients is bad policy - the tests are often inaccurate, several courts believe these laws violate our constitutional rights, and so on. But if we're going to require it - let's test our corporate welfare recipients as well as ordinary Americans.