Wall Street fraud caused the Great Depression and the current financial crisis. Top economists and financial experts agree that our economy will never recover unless Wall Street fraud is prosecuted.

Yet the government has more or less made it official policy not to prosecute fraud, and instead to do everything necessary to cover up for Wall Street. For example, the Obama administration is prosecuting fewer financial crimes than under Reagan or either Bush.

For example, we pointed out in 2010:

The government’s special inspector general in charge of oversight of the Troubled Asset Relief Program (the “TARP” bank bailouts) – Neil M. Barofsky – said today:

It was a “message to the banks ‘if we commit fraud, we break the rules, don’t worry, we’re too big — they’ll never bring the appropriate steps against us,’” Barofsky says in an interview with The Daily Ticker. “And that is why we’ve had scandal after scandal after scandal.” This was a “global conspiracy to fix one of the most important interest rates in the world,” Barofsky continues. “[Geithner] heard this information and looked the other way. Geithner and other regulators should be held accountable, they should be fired across the board. If they knew about an ongoing fraud, and they didn’t do anything about it, they don’t deserve to have their jobs. I hope we see people in handcuffs.“

Government regulators have become so corrupted and “captured” by those they regulate that Americans know that the cop is on the take. (Even top justice officials are incredibly cozy with Wall Street fraudsters.)

Institutional corruption is killing people’s trust in our government and our institutions, which is one of the reasons the economy is faltering again.

Indeed, polls show that very few Americans believe that the U.S. government has the “consent of the governed”, a higher percentage of Americans liked King George during the Revolutionary War than like Congress today, and people are publicly discussing whether it’s a good or bad idea to “hang bankers”.

I noted 7 years ago:

I am NOT calling for the overthrow of the government. In fact, I am calling for the reinstatement of our government. I am calling for an end to lawless dictatorship and a return to the rule of law. Rather than trying to subvert the constitution, I am calling for its enforcement. *** The best way to avoid all types of revolution would be for the government to start following the rule of law. I passionately hope it will do so.

While conservatives tend to view government as the problem, and liberals tend to view corporations as the problem, the real problem is the malignant, symbiotic relationship between corrupt officials and criminal corporate leaders. Without the cancerous relationship, neither side could cause so much damage. If America returns to the rule of law, we might have a fighting chance.

The justice system may be the only thing which stands between peace and violence. All of those who benefited from Wall Street fraud must be prosecuted ... including corrupt government officials who aided and abetted their crimes, helped cover them up, or have blocked prosecution.

Iceland should be a role model: