THIEVES OF BAY STREET
By Bruce Livesey
One thing we can thank the recent credit crisis and global financial meltdown for is the way it lifted the lid on a sector of the economy we hadn’t been paying enough attention to.
That sector is the financial industry. In Thieves of Bay Street investigative journalist Bruce Livesey looks at how Canada’s banks, brokerages, funds, and financial advisors have been ripping off Canadians for years. And while headline makers like Conrad Black and Earl Jones dominate Livesey’s chronicles of white collar crime, the not-so-few bad apples aren’t as important as the rotten barrel he describes.
In brief, the case he makes is that Canada’s economy has gone from being one based on manufacturing, or producing things, to one of simply moving money around (which basically means moving more and more of it into the bank accounts of the very rich). As one of the economists interviewed by Livesey puts it, the financial sector today is structured to extract value, not create it. This is done in a variety of ways, from fleecing retirees of their life savings to running whole companies into the ground. And then, once the deed is done, there comes the best part of all: there are no comebacks. Canada’s regulatory agencies are an international joke, the lawyers are in bed with the fraudsters, and the police are so out of their league they often don’t even bother with investigations. If you’re caught with your hand in the cookie jar you just might get a slap on the wrist . . . but probably not.
If the disincentives for bad behaviour are negligible, the incentives are perverse. Livesey criticizes the financial industry’s “declining morals and dearth of concern for investor’s interests,” but these are obviously immaterial virtues in a topsy-turvy world where executives walk away from the corporations they’ve bankrupted with multi-million dollar compensation packages and, in the words of one corporate lawyer, “things like scrupulous professionalism are not particularly valued, and indeed in some cases are regarded as an impediment.” Time and again Thieves of Bay Street drives the lesson home that crime pays, incompetence is no big deal, and corruption is just business as usual. As Livesey points out, Canada is a country “run by very few people,” and they look after their own.
It is a system, in other words, both above the law and too big to fail. Until, of course, it does. This book is essential reading not only for those with money to invest but anyone concerned about the path to social and economic ruin we are following.
Review first published April 14, 2012.