White Knight or Sacrificial Pawn

I know there's been a lot of (deserved) angst regarding a potential agreement between the Obama administration, the Justice department, and the biggest financial firms.

The deal would go like this:

Justice Department(JD): Hey, major banks?

Major Banks(MB): (Looks up from eating a baby.) Yesssss?

JD: Remember how you made billions of dollars and then crashed the economy, caused massive unemployment and drove people's pension and retirement funds into a downward spiral?

MB: I kinda remember that. Something before I started making money hand over fist, made record profits and gave out bonuses to the highest people while laying off more people while asking for more tax cuts because without more money I can't employ people?

JD: Yeah, it was when you got a massive bailout so you were able to survive.

MB: I was forced to take that I'd have been fine without it!

JD: Whatever. Look, we did some checking, and looks like some of those billions of dollars you made came from fraud.

MB: Fraud? What's wrong with that?

JD: It's illegal.

MB: Really? Greenspan said that the market would correct fraud, that the market was everything, and Ayn Rand was soooo sexy -

JD: Nope - fraud is still illegal. Telling people their investment was good while you knew it was bad is illegal. Faking signatures on mortgage documents to change the conditions of a loan - that's illegal. Submitting paperwork showing someone is a good mortgage risk when you know they're not - that's illegal.

MB: But - I'm innnocent! It wasn't me - it was the one armed man!

JD: Yeah, well, I got word from my boss. Hold on.

MB: What are you doing - let me go - ow that hurts!

JD: I just slapped you on the wrist!

MB: But it stings so hard!

JD: Promise never to massively defraud people and institutions again?

MB: Oh I promise!

JD: Are you sure - because it seems like you guys are big on the repeat offenders list. You keep promising to change, get a fine, and then nothing happens.

MB: Really really we promise this time! Just don't let mean judges actually call us out on never actually fulfilling our promise to do better!

You get the idea. And it looked like the Obama administration was going to create a deal that would basically give a slap on the wrist to the financial firms - or even let states investigate the crimes.

This makes Obama's State of the Union address where he announced a financial fraud investigations team so interesting. And it's not just the announcement of this group - it's also who's heading it up.

Eric Schneiderman, Attorney General of New York State, has been very adamant about making the financial industry pay for their bad behavior. Only - it looks like this investigative task group has no interest in really doing anything interesting. Schneiderman might just wind up being a figurehead, lending his name to the project.


So which is it? Will he be the white knight to lead the charge against the giant vampire squid - or someone sacrificed to lend a vener of respectability to the cause?