“My Job Is To Keep Things From Getting Out of Control. That Means Helping People to Understand the Pressures and Fears That Drove You Goons to Do What You Did. My Hope Is That Clear-Thinking People Will Step Forward and That We Will See Prison Sentences on the Shorter End of the Spectrum of Possibilities.”

Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:

Rob, prison overcrowding is a serious issue today. Given that most Goons are non-violent offenders, do you see a scenario where they just wind up on probation after the next big stock crash? Or are we looking at real prison time, in your view?

I don’t think it’s possible to say. There’s never been a situation like this before. People are going to be very pissed off to find out that they have lost most of their life savings and that it was all 100 percent unnecessary. I know that I would be very pissed if that happened to me. So I am not going to say anything to make light of the justified anger that millions of middle-class people are going to feel towards you, Anonymous.

Concerns over prison overcrowding didn’t keep Madoff out of prison. I don’t think you can count on that sparing you.

But I do think it’s important that we pull together as a society and put the negative stuff behind us and do all we can to understand why you Goons did what you did and to be as forgiving as possible. I will certainly be arguing the case with whatever energies and skills I am able to direct to the project. So I am not going to say that I believe with 100 percent certainty that there will be actual prison sentences either. If things go the way I would like to see things go, there will either not be actual prison sentences or at least there will be prison sentences that will be a lot shorter than the ones you would ordinarily expect to see in such circumstances.

We will have to see how it goes. The biggest factor is going to be the level of people’s anger. I have worries that people are going to be very angry. I say that because the level of emotion that we have seen over the past 14 years has been off the charts. The greater the extent of the irrationality we see during a bull market, the greater the extent of the irrationality we should expect to see during the bear market that follows. People don’t like to be tricked out of their retirement money. So I can easily see us experiencing an explosion of hate toward you Goons.

But my job is to keep things from getting out of control. In the days before the crash, that means doing what I can to bring the con to a close so that the hate does not get so out of control. In the days following the crash, that means helping people to understand the pressures and fears that drove you Goons to do what you did. My hope is that clear-thinking people will step forward and that we will see prison sentences on the shorter end of the spectrum of possibilities.

I obviously cannot guaranty anything. It may be that my voice will count for as much in the days following the crash as it has in the days leading up to the crash — that is, not too much at all. We are in uncharted waters. I think the key here is the comment that you made a little while back, that perception is everything. People will look at the Post Archives and form a determination as to how much you Goons were responsible for what happened to them.

I wouldn’t want to be in your shoes, it would be fair to say that much! But I do not personally believe that it would be fair to put all the blame on you Goons. What happened is largely due to human ignorance; as a society we truly did not know how stock investing worked until 1981 and in the grand scheme of things not so much time has passed since then. And lots of institutions had to fail us for you Goons to do what you did — journalists failed us, bloggers failed us, economists failed us, policymakers failed us, academics failed us, and on and on. Our own freakin’ human nature failed us!

If people take all that happened into account, I would think that there would be actual prison sentences but perhaps not terribly long ones. But I do not feel that I can say with any confidence at all how things are going to play out. People may strike out in anger without taking all of the realities into account. We will have to wait a bit to find out together how it all plays out.

I naturally do wish you all the best with it regardless of any differences that we have re the investing matters.

Rob