In his latest book, the 2008 chairman of the Federal Reserve, Ben Bernanke, now claims that more business executives should have gone to jail in the aftermath of the early days of what is now being called – the Great Recession. He didn’t call for it at the time, nor did he mention the role of erstwhile government officials responsible to prosecute such things.
Much time and scholarly thought has been dedicated to the veracity of too big to fail and its related bailouts, so we’ll skip those arguments today. While one can only assume that Bernanke and his ilk are motivated to justify the unprecedented and extreme moves that they took as “essential” to prevent a 1930-style depression, he does make a salient point regardless of his own culpability. If governments, agencies, and mega-corporations are too big to fail then are there individuals who are too important to be held accountable?
Ours is a system of laws and rules administered in a most evenhanded and thoughtful way. But like barnacles on a ship in the water, we have accumulated all manner of exceptions, special advocacy groups, and loopholes allowing for a perversion of the simple concept. If misdeeds occurred, either from neglect or intentional action, they should be fully explored. But we must be emphatic in applying the same standard to government bureaucrats as corporate ones. One might imagine that a failure on the part of the Justice Department to prosecute any individuals is related to a perception of collusion between powerbrokers in Washington and those in New York. Big financial firms are far more familiar with Pennsylvania Avenue than Main Street. Is the same true of the government officials we trust to enforce the rules? And, can we rely on a system where the risk is only borne by one of the benefitting parties?