As the nation’s collective temper flares, we’re all beginning to consider tossing the people responsible for today's financial mess in the slammer and throwing away -- no, melting -- the key. And with our economy in disarray and major banks like Citigroup (NYSE:C) and Bank of America (NYSE:BAC) potentially on the brink of collapse, it's tough to fight that sentiment.

On Thursday, Rep. Barney Frank once again brought this issue to the forefront, pushing for state and federal authorities to chase down the bad guys and acquaint them with nice, cold concrete walls. "Rules don't work," Frank said, "if people have no fear of them."

Sounds good to me. But who do we lock up?

Incompetence isn't enough
Sometimes it just doesn't matter what your IQ is, what school you went to, or what position you hold -- idiocy can creep up and slide into bed with you. Even more irresistible is an idiocy that is supported by seemingly everyone around you.

"What? Home prices never go down? That sounds fishy, but everyone else seems to think it's true." Remember when your mother asked whether you'd jump off a bridge if everyone else did it? Some people, even smart ones, have been jumping off that bridge their entire lives.

My guess is that a heck of a lot of the problems that we're facing today were born of people doing dumb things. Building a financial model that assumes housing prices will never fall? Dumb. Buying a $500,000 house with 2% down and a three-year interest-only loan? Dumb. Giving a mortgage loan to somebody putting nothing down? Yup, that's dumb too.

Last I checked, stupidity is not a crime, but that doesn't mean there aren't people who fully deserve to be behind bars.

The easy ones
When the market is going up and investors are optimistic about the future, running an investment fraud can be a cakewalk. When the market falls 50%, though, and investors are clamoring to get their money back, the wheels can come off very quickly.

Bernie Madoff and Allen Stanford are poster children for the greed that's led to a lot of today's problems, but they're far from alone. Head over to Google and do a news search for "fraud" or "wire fraud" -- even the "smaller" schemes that are now being uncovered are in the millions or hundreds of millions of dollars.

It's pretty clear that not only do these unsavory players need to be jailed posthaste, but the regulatory agencies that have apparently been playing a lot of Minesweeper over the past few years need to get on the ball.

The high-profile ones
Executives at major financial institutions like Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), JPMorgan (NYSE:JPM), and the two mentioned above, along with the once-mighty Bear Stearns, Lehman Brothers, Washington Mutual, Merrill Lynch, and Countrywide, were unquestionably in the middle of this whole mess. They were loaning, they were structuring, they were reselling, they were buying and holding -- and now they are either going belly-up or writing down billions while a government IV pumps in fresh funding.

In some cases, the best we can probably do is to say that leadership at these companies was incompetent. Investigations, though, seem like a good idea. If there is an industrial chemical accident, there will be an investigation into the root cause of that accident. We've just had the equivalent of nuclear meltdowns at multiple financial organizations, so I think some extensive digging is in order.

At the same time, the ratings agencies -- Moody's, Fitch, and Standard & Poor's -- were slapping high ratings on what we now know is, in many cases, complete junk. Incompetence across the board will be tougher to argue here, given that internal communications from S&P have already been recovered that suggest the company was rating anything and everything that was put in front of it. As one analyst reportedly said, "We rate every deal. It could be structured by cows and we would rate it."

There was a lot of money riding on the work that the investment banks were doing -- and the ratings that the ratings agencies were providing. Would anyone be surprised if there was more than plain old stupidity involved in all cases? If we want to keep from playing this same tape over again, it's important that those who were more than incompetent are dealt with.

Don't forget the little guy
No politician wants to call out Average Joe Middle-Class -- after all, that's the bread and butter of elections. But I'm no politician, so I'll head right for that third rail.

While some politicians have made some vague references to borrowers who were unscrupulous, I've yet to hear anyone talk about aggressively going after the fraud that was taking place on the ground floor of the housing market. Lying on your mortgage application? That's fraud. Appraisers inflating home values? Bam! Fraud. Cracking down at this level is just as important as taking down higher-profile cases.

The greed factor
In all the criminal fallout that comes from our financial mess, there will be a lot of different names for what people have done. At the end of the day, though, it all really falls under one big, bold banner: greed.

Sure, there are those who think that the mess was caused by low interest rates, or the government pushing lenders to give loans to lower-income folks, or any of a number of other reasons. But I disagree. Those things may have enabled the problems, but greed was the ultimate cause.

When greed is good
This isn't to decry greed entirely. Greed drives people to invent things and build businesses, and I expect that it will continue to bear fruit for a long, long time. Without the potential to profit in a big way, would Sergey, Larry, and the early Google (NASDAQ:GOOG) investors have pushed to make the company what it is today? Would Johnson & Johnson (NYSE:JNJ) have come up with a fraction of its life-saving treatments? But just like nuclear weaponry, greed in the wrong hands or out of control can do a heck of a lot of damage.

Arresting the out-and-out criminals of the last five years will be an important step in cleaning up and moving on. Recalibrating regulations that keep greed on a productive path will be even more crucial in preventing future meltdowns.

Further financial Foolishness:

Johnson & Johnson is a current Motley Fool Income Investor pick. Moody's and The McGraw-Hill Companies (which owns Standard & Poor's) are Motley Fool Inside Value selections. Moody's is also a Motley Fool Stock Advisor selection. Google is a Motley Fool Rule Breakers recommendation. JPMorgan Chase and Bank of America are former Motley Fool Income Investor picks. Try any of our Foolish newsletters today, free for 30 days.

Fool contributor Matt Koppenheffer owns shares of Bank of America, but does not own shares of any of the other companies mentioned. The Fool’s disclosure policy has never once been caught with its pants down. Of course, it doesn't actually wear pants …