I hate this view.

The rationale seems quite reasonable up front: something bad happened, we should find out who's responsible for it and punish them. There's also an unspoken assumption that this punishment would be a deterrent to future catastrophes, either by making these people too afraid of the consequences to commit their crimes, or simply by removing them from their positions of power.

This view of justice makes very good sense on the level of an individual. An individual who can be proven beyond a reasonable doubt to have committed a crime is considered responsible for their actions, and it is appropriate to punish them. If their punishment is incarceration, then locking them up for a time arguably makes society safer. Their fate would serve as an example to others of what happens when you commit a crime.

The problem with this view is that the financial crisis was not the result of individual actions on an individual level. What transgressions met the standard of our justice system, namely the rigorous demonstration of concrete, individual crimes, were treated. This article itself says this: those (relatively few) individuals who were demonstrated to have committed actions that were against the law were investigated, tried, and sentenced.

The financial crisis as a whole, however, was a consequence of the structure of a system. Risk was commoditized. Loans were gathered, sliced up, and sold as instruments. Incredible complexity was introduced: witness the explosion of demand for financial engineers specializing in derivatives pricing. Banks sold mortgages with the intention to sell them up the chain as components of complex securities, encouraging them to be lax with their lending standards.

In a way everyone involved was to blame, from the homeowners who filed shoddy-to-fraudulent paperwork, to the loan officers who looked the other way and accepted it. The mistake this and other articles like it make is it attempts to aggregate this blame upward. After all, the thinking goes, it's a manager's responsibility to ensure the proper behavior of those who report to him, and that chain ends at the CEOs. Therefore, the view goes, the CEOs must be held accountable.

Sometimes a more ephemeral, less informed view is at play. The reasoning is that these companies do what their leaders tell them to do, so naturally consequences of the company's actions are consequences of its leaders' actions. In addition, the CEO is a public figure. When we need a human being to personify a company, he's the first that comes to mind.

This is where things break down. To be held responsible for a crime, you personally have to have done something illegal. Not "you should have known better." You have to have broken the law. These people were investigated and even brought to testify before Congress, and no actions were found that met the rigorous requirements to be called a crime. Perhaps it can be argued that they were morally culpable, but as far as the justice system is concerned, their hands are clean. Their actions could not be proven beyond a reasonable doubt to have directly brought about the financial crisis.

Suppose they had been tried and given jail time, as this and other articles demand? In the absence of all other interventions, would that have made the system any more stable? Certainly not. The economic ingredients for another crisis would still be in place. Would their example have served to convince others to behave better? Certainly not. The message would not have been "don't cause financial crises," (whatever that means) but rather, "try not to be at the helm when things go badly." Their incarceration would have served no purpose beyond crowd pleasing.

It's time to give it a rest. You will never see these people prosecuted because by our standards of justice there is nothing to prosecute. If you want to make the financial system more resilient against collapse, you ought to press for structural reform to prevent these unstable situations from occurring again. If you want mob justice, it not happening. Deal with it.