The system increasingly turned away from sound and balanced regulation and lobbied to set aside lessons learned from prior scandals. Eventually the hype turned into a self-perpetuating feeding frenzy. Suddenly, in a single day, there was no more bull. Merrill Lynch’s thundering herd was sold off at a bargain basement price (in an all-paper, no-cash deal) to Bank of America -- itself one of the struggling firm’s major creditors, and now relieved of the need to stand in the creditors’ line after Merrill’s potential bankruptcy. Lehman Brothers’s tough-talking rodeo steers went bankrupt with a spectacular bang and bounced payroll checks issued to its London employees the Friday before. Cowboy capitalists at AIG, America’s largest insurance company, were dialing for dollars from anyone that might have $70 billion or so to spare. All this as the New York Fed president and the Treasury Secretary (a former Wall Street man himself) were moonlighting as weekend "investment bankers" to stave off a total meltdown and a system-wide implosion. And the lawmakers? Well, they did their job long ago by junking regulations and laws that called for control and supervision after the Great Depression.

Lehman Brother’s bankruptcy and Merrill Lynch’s forced sale are not only devastating events for Wall Street, but also exemplary of a massive moral bankruptcy. Many thousands of employees and investors saw their savings, not to mention their jobs, evaporate. As at many Wall Street investment banks, every Lehman employee, from the most senior executive to the humblest secretary, received roughly half of her compensation in stock, which she were not allowed to convert to cash but could borrow against to buy homes. Many did, and now their collateral is worthless. Thousands are suddenly scrambling for work, struggling to pay for homes they bought when they thought they were rich. Investment banks are huge employers, and the demise of three in a year -- including Bear Stearns -- has left the New York finance world angry and considerably poorer. Other investors are helpless as they see their wealth ruined at an astonishing rate.

The lasting image of Wall Street's preceding systemic scandal, the insider-trading crimes of the mid-1980s and the collapse of Drexel, is that of a crying trader being led off the trading floor in handcuffs. Tears dribbled down onto his red suspenders as his peers looked on, with both pity and terror that they might be next. But those distant Gordon Gecko years, when punishment followed crime and when mightiest financiers went to prison, no longer guide the post-Enron mix of lobbies and crony capitalism. The financial sum of those scandals and the massive Resolution Trust Corporation loss of half a trillion dollars in the 1980s pale in comparison to the colossal heist committed against ordinary investors, taxpayers and foreign investors in these early years of the 21st century. This time around, the perpetrators are some of the world's biggest financial "institutions" and government-sponsored entities, all unaccountable in a void of supervisory regulation. Alas, the top executives walk away with bonuses as they shrug off the very collapsed system that they created.

So, where are the handcuffs, the trials and the plea bargains for a few months at a "Club Fed" prison? Can someone please remind me what happened to accountability, fiduciary responsibility and due and proper care for other people’s money? One has to assume that in this collapsed house of cards the meltdown goes beyond mere mismanagement. It has passed the point where incompetence has converged with criminal behavior. But where is the regulator? Is he just a toothless, brainless sock puppet busy yelling, "Drill, baby, drill"?

It is astonishing to observe from abroad that the punishment is so severe for ordinary American citizens who default on their taxes, but that reckless financiers, who set the banking system on fire and cost those taxpayers billions, can walk away just marginally poorer. Some of these executives assured us that their businesses were sound, then turned around and trawled for hundreds of billions of dollars in public funds for an immediate rescue as they held the entire financial system hostage. How can they not be guilty of a crime? And how could such greedy behavior, which has endangered both their employees and duped millions of people into trusting their bull trademark, serve as a model for long-term financial security or lead others?

The rest of the world will be a close observer of this fiasco. We will ponder whether the perpetrators will face a more severe judge than mere market forces. Until then, the more cautious and conservative are bound to stay away from taking risks on a model that is light on regulatory structure and independent supervision, but long on hypocrisy. That model that has lost its way and lost face for its home country.