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This must be one of the great fallacies of the age: Nobody's been sent to jail, therefore no one's provably guilty, therefore it's crazy for people to be compla

This must be one of the great fallacies of the age: Nobody's been sent to jail, therefore no one's provably guilty, therefore it's crazy for people to be complaining they're not in jail. The fact is, they're not in jail because nobody was committed enough to prosecuting them, and because the criminals are simply too powerful and influential, and have utterly co-opted elite opinion and the institutions meant to keep them in check. Look at the Savings & Loans crisis - how many white collar criminals got sentences? How much bigger was this financial crisis? Just do the math (or read up on William K Black, a prosecutor who actually prosecuted, back in the day.)

rayiner 13y ago
You're making the illogical inference that just because there was a financial crisis, someone must have been provably guilty. Comparing the latest crisis to the S&L crisis is comparing apples and oranges. First, most of the ~900 people convicted back then were not high level execs, but loan officers, branch managers and the like. Second, the frauds in those cases were much easier to prove. There was a lot of individual fraud and insider trading. It's easy to make a case to a jury that someone should go to jail for making up fictitious borrowers or trading on an inside tip. But look at the REPO 105 example someone mentioned above. You want to explain to a jury why someone should go to jail for treating a repurchase transaction as a sale instead of a loan, on advice from accountants? Third there was the practical ramifications arising from the fact that this crisis was a much bigger problem than the S&L crisis. The government was preoccupied with saving these institutions to keep the credit markets flowing rather than punishing people for the actions that led to the crisis.
- dnautics 13y ago
  exactly. The government doesn't want to prosecute these guys because if they go to trial, what will come out is that the government WANTED these outcomes, and the bailout was mostly an effort by the government to save face and patch over a mistake that they are significantly responsible for (this is not to excuse bank executives for not having the moral perspicacity to stop it).

rayiner 13y ago

You're making the illogical inference that just because there was a financial crisis, someone must have been provably guilty. Comparing the latest crisis to the S&L crisis is comparing apples and oranges. First, most of the ~900 people convicted back then were not high level execs, but loan officers, branch managers and the like. Second, the frauds in those cases were much easier to prove. There was a lot of individual fraud and insider trading. It's easy to make a case to a jury that someone should go to jail for making up fictitious borrowers or trading on an inside tip. But look at the REPO 105 example someone mentioned above. You want to explain to a jury why someone should go to jail for treating a repurchase transaction as a sale instead of a loan, on advice from accountants? Third there was the practical ramifications arising from the fact that this crisis was a much bigger problem than the S&L crisis. The government was preoccupied with saving these institutions to keep the credit markets flowing rather than punishing people for the actions that led to the crisis.

dnautics 13y ago
exactly. The government doesn't want to prosecute these guys because if they go to trial, what will come out is that the government WANTED these outcomes, and the bailout was mostly an effort by the government to save face and patch over a mistake that they are significantly responsible for (this is not to excuse bank executives for not having the moral perspicacity to stop it).