Matt Taibbi, Justice Department’s New Get-Tough Policy Is, Well, Not:

I don’t want to sound like a broken record, but . . . the latest ploy by the government to insist it is “getting tough” on Wall Street is beyond laughable…

The [recent NY Times] article worried desperately over the issue of whether or not the Japanese subsidiaries [of UBS] would keep their licenses after these guilty pleas.  [Note:  UBS itself got off scott-free in a non-prosecution settlement.]  As is often the case – I’ve personally heard this excuse about a dozen times coming from DC types – regulators are terrified of repeating an Arthur Andersen situation, i.e. punishing a company and seeing massive job losses as a result…

The Arthur Andersen case [,i.e., their 2002 conviction which put them out of business and resulted in 28,000 people being laid off,] has become like Wall Street’s magic mantra – you hear the name whispered anytime any company gets in trouble. This is a tactic straight out of Blazing Saddles, with banks essentially taking themselves hostage, putting guns to their own heads as they creep sideways out the door: “Back off! Prosecute us and all these jobs will die!”

And prosecutors, just like the idiot town leaders of Mel Brooks’s Rockridge, are screaming, “They’re just crazy enough to do it!”

This isn’t brain surgery. You know what an effective deterrent to crime is? Jail! And do you know what kind of criminal penalty actually makes people think twice about committing crimes the next time? The kind that actually comes out of some individual’s pocket, not fines that come out of the corporate kitty…

I get that regulators are worried about job losses. They should be. But the long-term job losses are going to be much greater when investors around the world lose confidence in the U.S. financial system because they recognize that individuals do not face punishment for criminal activity. The individual incentive not to commit crime on Wall Street now is almost zero…

Let’s make a new rule: The Department of Justice doesn’t get to call itself “tough” until a) it puts someone from one of these companies in jail for at least 24 hours, or b) it extracts fines from either companies or individuals that represent at least slightly more than laughable fractions of their ill-gotten gains. That’s setting the bar pretty low, but you have to start somewhere, right?