Jesse, I am not sure using the word criminal is helpful, since it is apt to create the idea that the problems can be pinned on a small minority while letting off the majority scot-free, and it also detracts from the systemic problems. If we ignore those then I think we are doomed to repeat the pattern to a much greater degree than if we try to look at the systemic problems and the lessons to be learned. Did sticking the Enron executives in jail stop the same games from occurring again? No, it simply made great entertainment. Perhaps the sight of the humiliation was a deterrent for some. It certainly made the auditors paranoid about letting groups such as AIG use flattering numbers for their supersenior stuff this time round, but everyone was so busy chasing the "criminals" that they forgot to push as hard to reform the entire off-balance-sheet game.
Don't get me wrong: I am appalled by the collapse of ethics and disgusted by what many financiers have done. They should be criticized heavily. But I am worried that if America now stages a set of endless public trials, that will distract us all from the real reforms that are needed while producing little additional deterrent to what has already been created. I reckon the best "punishment" is to force senior executives at the banks that produced the biggest losses to spend time doing community service in a subprime-affected area and make big financial donations to be channeled into those areas. That at least would help them do something they rarely did: think about what lay at the end of the financial chain they created.