It always weirds me out when people talk about how no financiers went to jail for the Great Recession. No doubt there was lots of unpunished fraud, but a recession is not a crime. You could have a downturn even if everything was totally on the level, but people act like the recession was sufficient proof of felonies all by itself, as though bad events necessarily imply the existence of a guilty party.
I agree.
One thing the past couple of years have convinced me of is that we need to do a much better job of cracking down on white-collar crime. And on a surface level I have a common cause with a lot of people on this.
But everyone seems to jump to “for instance, no one went to jail over the recession!” And I’m not sure what crimes people are actually talking about there.
(That doesn’t mean there weren’t crimes committed. And I think we should do a much more serious attempt at enforcement and investigation than we historically have done. But “Making stupid loans” is perfectly legal, and should be.)
Sigh.
Anyone remember “shadow banking?”
Without any commentary on whether or not anyone should, on the object level, have gone to jail:
I think that the anger is actually less about the crash, as such, than about the bailouts. I think there’s a general understanding that there were regulations in place designed to prevent exactly that kind of thing from happening, that these regulations were evaded by most of the major players due to some combination of regulatory incompetence and regulatory capture and straight-up fraud, and that there’s a good chance this will keep happening so long as the risk-hunters at the top of the financial system believe themselves to be immune from downside consequences.
Something something “if we have to bail out your fucking bank in order to save the country, you had better suffer terribly over it, otherwise the message is that when your bets don’t pay out the government will cover them and you will still be fabulously wealthy.”