Scam, Apologize, Rinse, Repeat

Front of the

Wall Street Journal


's website on Sunday was this

from Jason Zweig, who writes the



's Saturday money and investing column, the Intelligent Investor, with a long-view, seen-it-all tone.

So this is the first sign I've seen in the


or anywhere that a crisis in confidence in our economic system is even possible, despite that it's been going on for 30 years. Zweig cites Philip Eberlin, a 56-year-old Chicago-based woodworker, as a sample of the problem. Burned on bubble stocks like Krispy Kreme in the


early 2000s, he sat out of the market until 2007, whereupon he got swindled again. "I don't have trust in Wall Street to help the small investor in any way, shape or form," Eberlin says.

And so here Zweig has a perfect opportunity to pinpoint the problem, the first step on the road to a solution. The problem, of course, is that the game

is actually

rigged against guys like Eberlin. He and millions like him are seen by brokers and professionals higher up on the food chain as marks to be fleeced. This is not speculation, it is amply documented in several tell-all books by actual traders and other Wall Street refugees. Frank Partnoy's

jumps to mind, as do

' classics


Liar's Poker


The Big Short


Better yet, just examine the

, formerly of Merrill Lynch, then

, now supposedly

on stocks and investments.

But Zweig does not expound on this, the actual problem. Instead, Zweig sees the phenomenon of growing mistrust as a crisis for the scammers. "The foundations of the financial markets ultimately rest upon the confidence of mom-and-pop investors across the country," he notes:

So, what to do? Should we collar the mountebanks? Prosecute the thieves? Hang the traitors?

Zweig suggests that the crooks apologize. This, he advises, will win back those millions of small investors, because the key to a healthy economy is, after all, mass delusion:

That Zweig is perfectly in tune with the Obama administration's plans and policies should surprise no one. Justice is hard, and sometimes harsh. Forgiveness, forgetfulness, business-as-usual and bailout—even if accompanied by apologies—is easy.

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