Is it time to put the Great Recession behind us?

Not in terms of the economy -- which remains bogged down with high unemployment, low growth and other aftershocks -- but rather when it comes to demanding a rigorous effort to hold Wall Street bankers, traders and executives accountable for their role in causing the financial crisis.

Should we just chalk it up to such simplified explanations as “animal spirits ran amok” and “these things happen occasionally”? Or should we continue to expend scarce political and law-enforcement resources trying to get to the bottom of what happened, and why, with a goal of holding the right people legally and financially accountable?

It’s a conundrum, especially since many Americans have lost enthusiasm for the fight. But the path we ultimately take will reveal to us and the world much about who we are as a people and what ethics, values and morality we stand for. It will also have serious lasting implications if we hope to avoid a rerun of what happened over the last five years.

At the moment, the message we are broadcasting far and wide is: There will be no justice; there will be no accountability; let’s return to the status quo as quickly as possible.

Moving On

There are, not surprisingly, powerful and articulate voices in favor of moving on. In his book “Unintended Consequences,” Edward Conard, a former Bain Capital partner of Mitt Romney (who is willing to say the things Romney wouldn’t dare and has given $1 million to a political action committee that supports the Romney campaign), argues forcefully that occasional market collapses such as 1929 and 2008 are a small price to pay for a system of capital allocation that has produced vast sums of wealth, extraordinary technical and financial innovation, and an incentive system that rewards people handsomely for taking risks.

For better or for worse, Conard writes, this is the country that produced Apple Inc., Google Inc. and Facebook Inc., among the most admired corporations in the world. Conard believes the sooner we get back to untethering Wall Street’s animal instincts the better. That means modest regulation, at best, and an end to any efforts at meting out justice for those personally responsible for the financial crisis because, hey, stuff happens.

Likewise, in a recent speech at the Council on Foreign Relations in Washington, Jamie Dimon, the chairman and chief executive officer of JPMorgan Chase & Co., returned to many of his favorite themes. One was how little he cares for much of what is in the Dodd-Frank law and the proposed Volcker Rule which limits banks’ ability to trade for their own account. He reiterated his belief that the right kind of financial regulation is necessary, in the vein of laws preventing drunk driving. But, like Conard, Dimon said the new regulatory environment is holding back economic growth.

He said he had discussed the topic with business owners and executives around the country: “They all say it’s terrible. So it’s not just banks. We’ve done it to ourselves, folks. We’re shooting ourselves in the foot and we’re doing it every day. Get rid of that wet blanket and this thing will take off.”

Even Lloyd Blankfein, the chairman and chief executive officer of Goldman Sachs Group Inc., has started to make noise again after a few years of laying low. As part of what the press has nicknamed his No Apologies Tour, which has taken Blankfein to forums and media outlets across the country, he has also called for jettisoning the wet blanket. “Getting rid of some regulations and rules that are impairing people from investing vast pools of liquidity that are on the sideline, that are not owned by the government, that are theirs to invest but are just sitting on the sideline” will help get the economy humming again, he told CNBC.

Volcker Rule

The Wall Street Journal reported last week that while the rest of us have moved on when it comes to the nitty-gritty details of what, say, the Volcker Rule will end up looking like when it is finally written, lawyers and lobbyists for Wall Street firms are working the regulators over with renewed intensity. JPMorgan Chase and Goldman Sachs have spent, respectively, $12.7 million and $8.3 million since the passage of the Dodd-Frank law in July 2010 on lobbying the regulators who are still drafting the final regulations. Goldman asked last week for an exemption for certain investments from a Volcker rule proposal that would limit a bank’s total investment in hedge and private-equity funds to 3 percent of Tier I capital. Why? Goldman makes a boatload of money investing this way.

On the other side of the debate are people like Elizabeth Warren, the Democratic U.S. Senate candidate from Massachusetts, who still believes that accountability for the bad behavior that occurred years ago on Wall Street is essential. “People feel like the system is rigged against them,” she said at the Democratic National Convention in September. “And here’s the painful part: they’re right. The system is rigged. Look around. Oil companies guzzle down billions in subsidies. Billionaires pay lower tax rates than their secretaries. Wall Street CEOs -- the same ones who wrecked our economy and destroyed millions of jobs -- still strut around Congress, no shame, demanding favors, and acting like we should thank them. Anyone here have a problem with that? Well I do.”

I’m no fan of Elizabeth Warren -- I fear that her populism and condescending tone will make her an ineffective Senator (should she win) -- but I agree with her completely that we cannot give up the fight to hold people responsible for what happened on Wall Street in the years leading up to the financial crisis.

Milking Banks

No one -- no one -- on Wall Street has paid a serious price. The one criminal prosecution -- of the Bear Stearns hedge-fund managers Ralph Cioffi and Matthew Tannin -- failed miserably. Every bank has received its slap on the wrist, has had its insurance carrier or its shareholders cough up a few hundred million dollars -- the cost of doing business, don’t you know -- and moved on. And governments, most recently New York State, have decided to milk the banks for badly needed cash rather than charge the miscreants themselves.

Once upon a time, prosecutors were vigilant about prosecuting bad financial behavior on Wall Street. According to the Financial Times, during the savings-and-loan crisis of the mid 1980s, some 3,500 bankers were jailed for their transgressions. I still haven’t heard a good reason why the number of successful prosecutions in the wake of our most recent financial crisis remains at zero.

Today’s highlights: the editors on making the most of Afghanistan’s minerals and on why New York should regulate, not research, fracking; Jeffrey Goldberg on questions for the foreign-policy debate; Albert R. Hunt on the ground battle in Ohio; Michael Bordo on why this recovery is slower; Brad Miller on using stand-alone subsidiaries to break up banks.

--Tobin Harshaw, Brandon Hardin.

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To contact the writer of this article: William D. Cohan at wdcohan@yahoo.com.

To contact the editor responsible for this article: Tobin Harshaw at tharshaw@bloomberg.net.