It’s not really a surprise, but a tremendous disappointment, to read that Goldman Sachs will suffer no consequences for its role in one of them most massive scams of all time. Investors need to remember that no one in Washington is protecting them. I understand the argument that the law is written in such a way that prosecution for banking crimes is very difficult, but I also remember that, when the U.S. finally got serious about shutting down the moffia, prosecutors had to work around laws that had been written by people on the take. They began to lean on the criminals in any way they could. That pressure began to change the culture of hopelessness that confronted anyone who wanted to shut down organized crime.
Neither presidential candidate will deal seriously with this problem. Romney believes in this form of ruthless capitalism, and an active Department of Justice would mean that Obama might have to arrest some of his closest advisors. But it’s not too early to be thinking about what might lie beyond today’s limited options.