People behave badly. Well, duh. I tend to be a forgiving sort in most individual cases. But, it’s the people who behave badly who hurt lots of people who can’t be allowed to just quietly slip into the night. I’m reminded of that because of two things I read, one yesterday and the other this morning (and, as an aside, a little cheer for Ángel Cabrera). First, in a typically insightful article, Gretchen Morgenson explores the role money managers had in the mess we’re in, via an interview with John Bogle, the founder of the Vanguard Group:

But he also identified one group that hasn’t been singled out for shame: the institutional money managers that allowed the nation’s financial companies to amass enormous risks on their balance sheets and pay gigantic compensation based on false profits. The big funds let this happen without uttering a word.

“When I read the causes of the recent unpleasantness, I haven’t seen one single person who has said that the owners of these corporations, including the banking corporations, didn’t seem to give a damn about how they were being run,” Mr. Bogle said in an interview last week. “We own all this stock but we pretty much do nothing.

   And…

And he says that the trust we have placed in these agents is undeserved. In his view, the agents have failed to serve their clients — mutual fund shareholders, pension beneficiaries and long-term investors; instead, the agents have served themselves.

Consider fees. Charges levied on mutual fund investors are much higher than those that the identical firms exact on pension clients, for example. The three largest money managers, Mr. Bogle pointed out, charged an average fee rate of 0.08 percent to pension customers. This compares with 0.61 percent charged to fund shareholders.

   This is a strong point. And you wonder where the political leaders have been on this topic…eh, check anyone’s campaign finance filings yet to see where they get contributions?

   Second, this morning the Financial Times brings this shocking–SHOCKING!!!–alert: banks may have cheated us. No, tell me it isn’t true:

The official policing the $700bn Tarp fund says he is investigating whether banks have “cooked their books” to secure bail-out money.

Neil Barofsky, special inspector-general for the troubled asset relief programme, told the Financial Times he was seeking evidence of wrongdoing on the part of banks receiving help from the fund, which was designed to ease credit conditions and support distressed industries.

“I hope we don’t find a single bank that’s cooked their books to try to get money but I don’t think that’s going to be the case,” said Mr Barofsky, who has been dubbed the “Tarp cop”.

   This would truly shatter all my faith in the banking system…could not be true, right?