A Stanford Escape?

I don't advocate violence but it is with considerable amazement that I note that no-one has starting hunting down and shooting these financial harpies.

A person who has lost everything and is pushing 80 has little to fear from the law. Half of the juries would refuse to convict, no matter what the law says. If convicted jail is 'three hots, a cot, and free health care'. Probably better than they can expect to get from society considering what little money they have been left with.

Could be the sound of vengeance, and what little justice remains, is: Glock, glock.

Paul Krugman asks, IMHO correctly:
"How different, really, is Mr. Madoffâs tale from the story of the investment industry as a whole?"
http://www.nytimes.com/2008/12/19/opinion/19krugman.html

Allen Stanford and Bernie Madoff are just the ones singled out, so that the rest of the finance industry can continue in its merry ways, while pointing to them as black sheep.
These two just didn't quite follow the rules; they'd have done fine if they had bought enough CDOs, commercial paper, and other risky investments graded AAA by Moody's and the other ratings agencies to cover their *** [behind]; they could have paid themselves -perfectly legally - fat bonuses and peddled stuff they knew to be worthless as risk-free on their customers.--

I suspect Allen Stanford will live under some different name in some gated community somewhere. If he had any Mafiosos as customers, he might pay them off, but for the rest of them - some might be reluctant to come forward, as they invested offshore to avoid US taxes.

@Art: We probably need a grassroots movement to make bankers accountable.
Nassim Taleb started a facebook group for that purpose: http://www.facebook.com/group.php?gid=51818722129

From 1994, Bankruptcy for Profit.

If so the normal economics of maximizing economic value is replaced by the topsy-turvy economics of maximizing current extractable value, which tends to drive the firmâs economic net worth deeply negative. Once owners have decided that they can extract more from a firm by maximizing their present take, any action that allows them to extract more currently will be attractive - even if it causes a large reduction in the true economic net worth of the firm. A dollar in increased dividends today is worth a dollar to owners, but a dollar in increased future earnings of the firm is worth nothing because future payments accrue to the creditors who will be left holding the bag. As a result, bankruptcy for profit can cause social losses that dwarf the transfers from creditors that the shareholders can induce. Because of this disparity between what the owners can capture and the losses that they create, we refer to bankruptcy for profit as looting.

Re looting - I know zero econ, but I've wondered if risk-taking desire varies with net worth. It seems to me I would feel very differently about having one mil in the bank versus having five or ten mil.

If I were a family man, aged 40, worth one million, living somewhere expensive and paying for private schools, I might be highly inclined to keep my job, meaning I want my firm in the black for years to come. My lifestyle depends on it. But if I were 40 years old and worth five million, maybe the marginal value of another five or seven mil over the rest of my career doesn't sound too exciting to me; maybe I'm more interested in trying for the jackpot - 40 million or bust. If the firm goes under, I can get another job - or not, if I don't feel like it. Hell, I have five million dollars to live on and invest.

Since GDPs have been rising, we now have far more five-mil cats (speaking in constant dollars) running around in the finance sector than we used to. Could it be that we arrived at sort of a critical concentration of this particular level of rich people, who no longer absolutely need their jobs or any job, and therefore want to see their firms engage in high-risk and perhaps short-term-optimal behavior?

@John - I will look into the suggested site. Looks like a start.

What amazes me about this is that Osama Bin laden (OBL), working through AlQaeda perpetrated a coordinated attack upon the US that cost us roughly 3500 lives and perhaps 30 Billion dollars in direct costs. Indirect cost might add up to 300 Billion if you calculate it out far enough.

These bankers, rating agencies, mortgage brokers and investment bankers, con men all, have cost at least three Trillion dollars. And that is just the first estimate. Nobody seems to have even hazarded a guess as to what the bottom line may be if we look a decade into the future considering the time costs and opportunity costs of the situation.

Before anyone jumps in a points out nobody died you need to spend some time looking up the human costs of such a large economic dislocation are. By some accounts the numbers of calls to suicide hot lines have doubled and the real hurting hasn't even begun. Loss of opportunity and hope will certainly increase alcohol and drug use, domestic violence, suicide, homelessness, venereal diseases, infant mortality, the general lack of medical treatment and malnutrition.

OBL and AlQeada cost us perhaps 300 Billion and we sent in the full force of the US military. We sent in troops, we kidnapped, detained and tortured people. We bombed and sniped and often killed on sight anyone we thought was connected. We killed thousands and maimed many times that. We shook the world with our wrath.

But faced with these financial geniuses, who cost us at least ten times the value and, in time, many times the lives all we can manage is to ineffectually shake our fists, threaten to send them to a prison with a golf course in back, and flail about attempting to 'claw back' some small portion of their ill gotten gain.

Brown skinned guys who hurt us and dress funny get JDAMS, the US Marines and the best recreation of Hell on Earth that we can provide. Complete with lots of hiding in deep dark holes, violent bloody death, indefinite anonymous detention, and waterboarding.

Well-tanned white guys who wear Armani suits and Gucci loafers who cost us ten times as much get a stern talking to and are out on bail in four hours. Worse case we might, if it is found to be legal and practicable, ask for some of their last bonus check back.

Is there anyone who doesn't see a problem here?