The Wall Street Journal has a piece on the J. P. Morgan settlement that calls it like it is – a shakedown. This is much like the treatment of BP in the wake of the Deepwater Horizon oil spill in the Gulf of Mexico, when federal officials coerced BP into paying $20 billion into what amounted to a slush fund under the control of a political appointee for distribution.

That said, I have little sympathy for J. P Morgan, even though the idea of the federal government extorting $4 billion to distribute to likely political supporters is nothing less than corrupt. J. P. Morgan got in bed with the feds, and should have known better. They bought out Bear Stearns, and Washington Mutual at the federal governments request, and undoubtedly got things in return. They have done well in the meantime, which is no coincidence. It is fitting that they pay a hefty price for their dalliance with their “regulators”.

Nevertheless, this behavior by our government needs to be called out for what it is, and condemned. It is why fines are normally not allowed to be “directed”, but rather go to the general treasury, so that proceeds cannot be used for political advantage.

This is not a victory for the public. It is a shakedown.