Thursday, October 1, 2009
Nobel prize winning economist Joseph Stiglitz says that Goldman Sachs may have engaged in frontrunning. Ask a Goldman spokesman, and he or she will undoubtedly say that is a conspiracy theory.
Indeed, when Matt Taibbi claimed that Goldman created every bubble since the Great Depression, a Goldman spokesman responded by calling Taibbi's essay "an hysterical compilation of conspiracy theories".
Tyler Durden at Zero Hedge blew the whistle on Goldman's high-frequency trading and other frontrunning activities, and has also been called a conspiracy theorist. But Goldman subsequently admitted to frontrunning.
PhD economist, former Assistant Secretary of the Treasury, and former Wall Street Journal editor Paul Craig Roberts says that the government and mainstream media are lying to the American public about how bad the economic situation really is.
PhD economist Dean Baker said in February that the true purpose of the bank rescues is "a massive redistribution of wealth to the bank shareholders and their top executives".
PhD economist Michael Hudson says that the financial “parasites” have killed the American economy, and they are "sucking as much money out" as they can before "jumping ship".
PhD economist Michel Chossudovsky says that the giant banks which received the most bailout money also finance a portion of the government's debt, and are exercising their power as creditors to buy public assets for a song and to impose IMF-style austerity measures on the U.S. government.
The response to Roberts, Baker, Hudson and Chossudovsky is, oftentimes, "conspiracy theory".
Indeed, it is common - when someone claims that anyone has rigged the game - for people to say "that's a conspiracy theory".
"Some Financial Market Conspiracies Are Real"
Time Magazine's Justin Fox writes today:
And Fox, a regular financial writer for one of America's most widely-read "mainstream" publications, adds:
Some financial market conspiracies are real...
Most good investigative reporters are conspiracy theorists, by the way.
How Judges Look at Conspiracy Theories
Let's be level-headed about this. How do we assess whether or not claims are crazy conspiracy theories?
We have to start by asking: what is a conspiracy theory?
Initially, federal and all 50 state's codes include specific statutes addressing conspiracy, and providing the punishment for people who commit conspiracies.
But let's examine what the people trained to weigh evidence and reach conclusions think about "conspiracies". Let's look at what American judges think.
Searching Westlaw, one of the 2 primary legal research networks which attorneys and judges use to research the law, I searched for court decisions including the word "Conspiracy". This is such a common term in lawsuits that it overwhelmed Westlaw. Specifically, I got the following message:
"Your query has been intercepted because it may retrieve a large number of documents."From experience, I know that this means that there were potentially millions or many hundreds of thousands of cases which use the term. There were so many cases, that Westlaw could not even start processing the request.
So I searched again, using the phrase "Guilty of Conspiracy". I hoped that this would not only narrow my search sufficiently that Westlaw could handle it, but would give me cases where the judge actually found the defendant guilty of a conspiracy. This pulled up exactly 10,000 cases -- which is the maximum number of results which Westlaw can give at one time. In other words, there were more than 10,000 cases using the phrase "Guilty of Conspiracy" (maybe there's a way to change my settings to get more than 10,000 results, but I haven't found it yet).
Moreover, as any attorney can confirm, usually only appeal court decisions are published in the Westlaw database. In other words, trial court decisions are rarely published; the only decisions normally published are those of the courts which hear appeals of the trial. Because only a very small fraction of the cases which go to trial are appealed, this logically means that the number of guilty verdicts in conspiracy cases at trial must be much, much larger than 10,000.
Moreover, "Guilty of Conspiracy" is only one of many possible search phrases to use to find cases where the defendant was found guilty of a lawsuit for conspiracy. Searching on Google, I got 3,170,000 results (as of yesterday) under the term "Guilty of Conspiracy", 669,000 results for the search term "Convictions for Conspiracy", and 743,000 results for "Convicted for Conspiracy".
Of course, many types of conspiracies are called other things altogether. For example, a long-accepted legal doctrine makes it illegal for two or more companies to conspire to fix prices, which is called "Price Fixing" (1,180,000 results).
Given the above, I would extrapolate that there have been hundreds of thousands of convictions for criminal or civil conspiracy in the United States.
Finally, many crimes go unreported or unsolved, and the perpetrators are never caught. Therefore, the actual number of conspiracies committed in the U.S. must be even higher.
In other words, conspiracies are committed all the time in the U.S., and many of the conspirators are caught and found guilty by American courts. Remember, Bernie Madoff's Ponzi scheme was a conspiracy theory.
Indeed, conspiracy is a very well-recognized crime in American law, taught to every first-year law school student as part of their basic curriculum. Telling a judge that someone has a "conspiracy theory" would be like telling him that someone is claiming that he trespassed on their property, or committed assault, or stole his car. It is a fundamental legal concept.
Obviously, many conspiracy allegations are false (if you see a judge at a dinner party, ask him to tell you some of the crazy conspiracy allegations which were made in his court). Obviously, people will either win or lose in court depending on whether or not they can prove their claim with the available evidence. But not all allegations of trespass, assault, or theft are true, either.
Proving a claim of conspiracy is no different from proving any other legal claim, and the mere label "conspiracy" is taken no less seriously by judges.