What’s a better way than beefed-up regulation to prevent mischief by banks and their employees?  Making it a crime to engage in business practices that destroy a bank.  Hooray!

Paul Collier, a very silly person at UK’s Guardian, has proposed a completely sane and workable new class of crime, to be known as “bankslaughter” (it’s like manslaughter, see, except with banks instead of people because corporate personhood is both fun and profitable).  When a bank fails, an investigation would ensue and the person or persons responsible would be punished with jail or whatever the criminals are getting these days.  Chain gangs, maybe?  Did those ever come back in style?  This is some kind of horrible idea, and the guy who thought of it should be taken out back and beaten with sticks or a sock full of wood screws or something.  Clusterstock explains, for the peasantry:

Let’s try to cure his blindness. In the first place, Collier doesn’t seem to have given much thought to the costs of over-deterrence. Bank executives faced with the prospect of a criminal investigation and possible conviction would likely be overly cautious. We’d lose a lot of socially beneficially risk taking by criminalizing bank failure.

There’s also a serious fairness issue. Only those executives whose risky bets blow up get investigated, prosecuted and punished. Those whose bets pay off are untouched. This means that being unlucky in the markets becomes a criminal matter.  Criminality becomes a kind of lottery.

Worst of all, can you just imagine the inevitable Law & Order spinoff?  Jesus, that show is boring enough when it involves sexy crimes like murder, having to sit through an hour of the danger-filled world of forensic accounting might actually be the death-knell of broadcast television.  The police are on the scene, in a dimly-lit office, papers strewn about as if to suggest a struggle – a struggle of conscience, perhaps – and the two leads (Sam Neill and Laura Dern, reunited from Jurassic Park, in my pretend world) are engaged in a conversation absolutely dripping with sexual tension, like you wish they would just throw down on the plushly carpeted floor and get it on right THERE in a writhing mass of weird accent and nepotism, if you actually had any desire to see any more of Laura Dern than you already have to.  A beat cop off in a corner sifting through some rubble pipes up, “Sir? I think I’ve found something.  You’re gonna want to see this.” Sam walks over to the crowd of officers hunched over something on the floor.  Slowly, he parts the sea of blue uniforms to reveal…a junk CDO. *L&O noise* Cut to commercial.

Quite apart from that horror, Jon posits that it might actually make the boom-and-bust cycle of our economy lean more towards the bust than the boom.

Bankslaughter would also be pro-cyclical. As failures multiply during an economic downturn and prosecutors begin to launch bankslaughter investigations, banks would be reign [sic] in their own risk-taking. If you think the credit crunch is bad now, imagine how much worse it would be if Jamie Dimon thought he might go to jail for allowing his bankers to authorize loans to consumers and business already burdened with debt.

All I have to say to that is that if Jamie Dimon commits a crime, he does not go to jail.  When jail commits a crime, it goes to Jamie Dimon.

And remember, you can’t spell “bankslaughter” without “laughter”.