That’s essentially the question that this Gretchen Morgenson/Louise Story/NY Times article asks.

Why have there been so few criminal prosecutions in regard to the 2008 meltdown on Wall Street that prompted a huge federal government bailout that citizens will be subsidizing for decades?

Yet, the intrepid NY Times reporters can’t quite bring themselves to recognize that whether the government pursued and obtained a criminal conviction of a businessperson over the past decade has had much more to do with chance and politics than prosecution of truly criminal conduct.

Could it be that federal prosecutors are finally realizing that old-fashioned greediness really is not be a crime?

Of course, the rationalization for the lack of villains now as compared to earlier crises has never been particularly compelling.

What the NY Times reporters refuse to confront is that business prosecutions over merely questionable business judgment is fundamentally bad regulatory policy.

Such prosecutions obscure the true nature of business risk and fuel the myth that investment loss results primarily from criminal misconduct.

Taking business risk is what leads to valuable innovation, wealth creation and – most importantly these days – desperately needed jobs for communities. Throwing creative and productive business executives such as Michael Milken and Jeff Skilling in prison may placate NY Times reporters, but it does nothing to educate investors about the true nature of risk and the importance of diversification.

Ignorance about business risk is one of the underlying causes of the the criminalization of business lottery. Basing criminal prosecutions on the luck of the draw breeds cynicism and disrespect for the rule of law.

Isn’t it about time that dubious policy be put to permanent rest?

Update: Larry Ribstein — who maintains an entertaining archive of blog posts that he wrote over the years on Morgenson’s misfires — comments on Morgenson’s latest posse-gathering effort here.