> There's intense political pressure to not punish shareholders for management's misdeeds
Rightly so, IMO. I invest almost exclusively in index funds, which means there's a good chance I'm a shareholder and don't even know it. I like to think that it wouldn't make sense for me to be held responsible.
The reason your index funds return so much is that you're buying a share of ownership in the company. That includes upside but it also includes downside. If there were no downside you'd be getting exactly money market-like returns.
The downside of equities is not being sued as a shareholder of a crooked company, it's the risk and long-term exposure you bear from your share of ownership and the future cash flow of the company.
Rightly so, IMO. I invest almost exclusively in index funds, which means there's a good chance I'm a shareholder and don't even know it. I like to think that it wouldn't make sense for me to be held responsible.