Listening to a discussion on NPR I got the impression that it is far from clear that the SEC will succeed in the suit. I lack a reference to that discussion, but here is perhaps a preview of the GS defense:
http://www.washingtonpost.com/wp-dyn/conte...id=opinionsbox1
Don't get me wrong. I am no apologist for GS. It seems clear that they were screwing people, the question is whether they were legally screwing them or illegally screwing them. Very highly paid lawyers will, in some sense, settle this question.
Some things seem clear.
There will always be individuals and corporations that will attempt to make a lot of money while doing nothing that is remotely socially productive.
Government agencies, through understaffing, stupidity, or whatever are often not up to dealing with the more shady aspects. See Bernie Madoff, for example.
Many people, I am an example, find that complex financial transactions are confusing. We approach such matters with simple rules: Don't spend money you don't have, don't get into a poker game with professionals at the table. That sort of thing.
So what can be done?
Try to keep the big boys from totally shafting the rest of us to the extent that this can be done, sure, but mostly keep them from seriously gumming up the works while they are busy shafting each other.
If the SEC lawyers are playing a little hardball with GS lawyers by pushing a less than solid case, I don't actually mind. Some asses are in serious need of some kicking. But what I really want is some action that will keep the boat afloat during stormy weather. If that is done, I'll be happy to watch out for myself when someone tries to sell me either the Brooklyn Bridge or synthetic collateralized debt obligations.