Is it time to put the Great Recession behind us?
Not in terms of the economy -- which remains bogged down with high unemployment, low growth and other aftershocks -- but rather when it comes to demanding a rigorous effort to hold Wall Street bankers, traders and executives accountable for their role in causing the financial crisis.
Many Americans have lost enthusiasm for the fight, but the path we ultimately take will reveal to us and the world much about who we are as a people and what ethics, values and morality we stand for. It will also have serious lasting implications if we hope to avoid a rerun of what happened over the last five years.
At the moment, the message we are broadcasting far and wide is: There will be no justice; there will be no accountability; let's return to the status quo as quickly as possible.
There are, not surprisingly, powerful and articulate voices in favor of moving on. In his book "Unintended Consequences," Edward Conard, a former Bain Capital partner of Mitt Romney, argues that occasional market collapses such as 1929 and 2008 are a small price to pay for a system of capital allocation that has produced vast sums of wealth, extraordinary technical and financial innovation and an incentive system that rewards people handsomely for taking risks.
This is the country that produced Apple, Google and Facebook, among the most admired corporations in the world, Mr. Conard writes. He believes the sooner we get back to untethering Wall Street's animal instincts the better. That means modest regulation, at best, and an end to any efforts at meting out justice for those personally responsible for the financial crisis because, hey, stuff happens.
Likewise, in a recent speech in Washington, Jamie Dimon, CEO of JPMorgan Chase, returned to many of his favorite themes. One was how little he cares for much of the Dodd-Frank law and the proposed Volcker Rule, which limits banks' ability to trade for their own accounts. He reiterated his belief that the right kind of financial regulation is necessary, in the vein of laws preventing drunken driving. But, like Mr. Conard, Mr. Dimon said the new regulatory environment is holding back economic growth.
He said he had discussed the topic with business owners and executives around the country: "They all say it's terrible. So it's not just banks. We've done it to ourselves, folks. We're shooting ourselves in the foot and we're doing it every day. Get rid of that wet blanket and this thing will take off."
Even Lloyd Blankfein, CEO of Goldman Sachs, has started to make noise again after a few years of lying low. As part of what the press has nicknamed his No Apologies Tour, Mr. Blankfein has also called for relief from the wet blanket. "Getting rid of some regulations and rules that are impairing people from investing vast pools of liquidity that are on the sideline, that are not owned by the government, that are theirs to invest but are just sitting on the sideline" will help get the economy humming again, he told CNBC.
The Wall Street Journal reported last week that while the rest of us have moved on when it comes to financial regulation, lawyers and lobbyists for Wall Street firms are working the regulators over with renewed intensity. JPMorgan Chase and Goldman Sachs have spent, respectively, $12.7 million and $8.3 million since the passage of the Dodd-Frank law in July 2010 to lobby those still drafting the final regulations. Goldman asked last week for an exemption for certain investments from a Volcker Rule proposal that would limit a bank's total investment in hedge and private-equity funds to 3 percent of Tier I capital. Why? Goldman makes a boatload of money investing this way.
On the other side of the debate are people like Elizabeth Warren, the Democratic U.S. Senate candidate from Massachusetts, who still believes that accountability for the bad behavior that occurred years ago on Wall Street is essential.
"People feel like the system is rigged against them," she said at the Democratic National Convention last month. "And here's the painful part: they're right. The system is rigged. Look around. Oil companies guzzle down billions in subsidies. Billionaires pay lower tax rates than their secretaries. Wall Street CEOs -- the same ones who wrecked our economy and destroyed millions of jobs -- still strut around Congress, no shame, demanding favors, and acting like we should thank them. Anyone here have a problem with that? Well, I do."
I'm no fan of Elizabeth Warren, but I agree with her completely that we cannot give up the fight to hold people responsible for what happened on Wall Street in the years leading up to the financial crisis.
No one -- no one -- on Wall Street has paid a serious price. The one criminal prosecution -- of Bear Stearns fund managers Ralph Cioffi and Matthew Tannin -- failed miserably. Every bank has received its slap on the wrist, has had its insurance carrier or its shareholders cough up a few hundred million dollars -- the cost of doing business, you know -- and moved on. And governments, most recently New York state, have decided to milk the banks for badly needed cash rather than charge the miscreants.
Once upon a time, prosecutors were vigilant about prosecuting bad financial behavior on Wall Street. According to the Financial Times, during the savings-and-loan crisis of the mid-1980s, some 3,500 bankers were jailed. I still haven't heard a good reason why the number of successful prosecutions in the wake of our most recent financial crisis remains at zero.
William D. Cohan is the author most recently of "Money and Power: How Goldman Sachs Came to Rule the World." He wrote this for Bloomberg View.