As New Scammers Emerge, Is It 'Jailout' Time Yet?

Judging by my in-box, there seem to be no shortage of organizations and individuals obsessed with an image: Dick Cheney and George Bush in prison, and Karl Rove in the next cell. Never mind that Congress doesn't have the guts, or the President the gumption, to go after those responsible for the gutting of the Constitution. Nevertheless, there are many campaigns and calls to hold the last administration accountable for its crimes.

At the same time, as we watch an economy in free fall, there seems to be a lot less agitation for a serious investigation of those responsible for this collapse. Even as you overhear conversations in every bar and union hall that begins with "those bastards should be in jail," few progressives are leading the charge to demand a Jail-Out alongside those stimulus bailouts. It's as if economic crimes provoke a ho-hum reaction among activists.

Oddly, some corporate media are more sensitive to the seething, mass public outrage. TIME did a piece on the 25 individuals responsible for the crisis, including politicians and CEOs. They ran a photo spread with their images against the background of police line-up. CNN profiled corporate criminals, "Ten Most Wanted: Culprits of the Collapse." CNBC is running a series on "American Greed" -- mostly of small time con men.

Wealth Daily, an independent analysis company, identified key corporate figures as "The Architects of Destruction," suggesting that actions by key industry leaders resulted in the economy's collapse.

Of course, the Madoff case stays in the news even as he stays in his fancy apartment. The investigators have now determined that he never made any trades with the money investors trusted him with.

Tom Lindmark seemed shocked to hear this on the Seeking Alpha financial blog:

"...it now turns out that Mr. Madoff may not have traded any securities for the past thirteen years. You heard that right. The guy just ran his Ponzi scheme. No extra complications. All of which begs the question of what were his employees doing? Did they just show up, surf the Internet and text friends for all those years?

If it's this easy to get away with things, evade arrest and live the good life, why are all of us walking on the right side of the line? Who are the fools?"

There is a deeper problem, however. How did he get away with it? Lawyer John Coffee, of the Columbia Law School, addressed that question in a recent interview:

"I think our regulatory system failed and failed badly over basically the last six or seven years in failing to spot a Mr. Madoff. Although, in fairness, Mr. Madoff has been a crook for almost 20 or 25 years and we can't just pick on the last couple of years there. But I think that the regulatory system allowed these offerings when there was evidence that lending standards were being relaxed at the mortgage loan originator stage, when the underwriting standards were being relaxed and in which credit rating agencies were becoming so conflicted that the really sophisticated person no longer believes their ratings."

Three new crime stores came to light this past week:

There's Texan, Alan Stanford, a mere 8-billion-dollar fraudster, who we were told was arrested, but wasn't.

Then there's evidence that as many as 52,000 Americans dodged taxes with secret accounts in the Swiss bank UBS, which was also deeply invested in worthless subprime securities.

On Friday, the NY Times reported the arrest of mortgage scammers who recruited prisoners to apply for subprime loans, a $10 million rip-off. They were busted by the DA's office in Manhattan.

Frank Rich, once again, asks THE question: "Americans are right to wonder why there has been scant punishment for the management and boards of bailed-out banks that recklessly sliced and diced all this debt into worthless gambling chips."