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The federal government is going to have an awfully hard time taking anyone to task for the financial meltdown the occurred at the end of the reign of George Bush II. By-in-large, the government bailed out the institutions involved, and short of the out right thievery of the likes of Bernie Madoff, the law is not written to prosecute the fund managers.

This week the government couldn't convict the first two Bear Sterns guys they prosecuted because they couldn't prove malicious intent. The problem prosecuting almost all individuals involved will be the same, intent. These people are salespeople. How can the government distinguish? Were these guys deliberately trying to deceive investors or were they just trying to put a positive spin on selling a crappy product in a declining market?

The Wall Street Journal notes, "while certain statements by executives ultimately proved incorrect, they can make a case that they believed what they were saying."

Defense attorneys spin it even further, "[they] were not trying to swindle widows out of their future; they were mismanaging the crisis."

The defendants didn't even find it necessary to take the stand in their own defense. This despite the reality that the two Bear Stearns funds that they managed lost more than $1.5 billion.

The government can indict individuals for the failings of capitalism, but short of embezzlement, it will never be able to successfully prosecute them. Capitalism itself is to blame. Capitalism, as it is currently constituted, institutionalizes spin and deception.

Read more on this story here in the Wall Street Journal.

Labels: Economy, Politics