(Guest blogger: Mad Rocket Scientist from Afternoons With the Mad Rocket Scientist)
As we the taxpayers get ready to pony up yet another bailout to cover the destruction of wealth caused by careless and criminal individuals, I propose, in the spirit of Ted’s new rules, that we need a new business regulation.
In addition to bringing back some sense of oversight, we need a set of penalties to befall those who mismanage the wealth of our nation. I propose that if a company hides debt or does any shady business practice that prevent investors from seeing the truth of a companies performance, then any and all employees who are responsible (from the guy who did it to everyone above him since they are responsible for those under them), including former employees who were employed during the time (unless they blew the whistle or turn states evidence) can have their wealth seized to cover the losses. Criminal convictions are nice, but I propose that this be a civil suit, not a criminal one (is it possible for the government to bring a civil suit?), or that once such malfeasance is exposed, everyone’s assets are frozen until such a time as culpability can be sorted out. If the seized assets are insufficient to the task, no one goes to jail, instead they will have a government garnishment on any and all wages and investments until they have paid back their share of the loss.
Why do I say current and former employees? Because the former boss of Bear Stearns was running the show when they were hiding debt, then left with a tidy sum, enough to buy a $2.8 million house.
Either way, the idea is that any person or organization (company, union, etc.) that destroys wealth through fraud, neglect, or deception is responsible for building that wealth back, and putting a person in prison does not allow for the creation of wealth. Also, fraud does not carry heavy prison terms and does not have much of a deterrent effect. If a money manager was risking a near lifetime of debt for himself and everyone above him, he might not be so eager to be stupid, and his bosses might not be so careless about what their people are doing.
We need to make the punishment fit the crime, and we need to make these people pay us back, since the wealth they destroy is not their own.