>Yes, I am advocating that whoever screwed up should fail. That's capitalism. Propping the worst with the money of others is also the worst kind of socialism (the kind I never liked); it creates bottomless pits.
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>It's called "moral hazard" and government is well aware of the risk- which is why they've taken huge chunks of equity rather than just handing out $. Those managers and shareholders have ben punished. Government did it this way to protect innocent people from sudden system-wide illiquidity. Sadly it isn't just "whoever screwed up" that would have gone down with AIG.

And that's why I think the system is bad - you may be working your posterior off, doing everything right, and still go down because in some way you are tied with a bunch of gamblers and con artists somewhere. And even if you knew who they were, you couldn't isolate yourself from the consequences of their doing, not completely.

>... The resulting avalanche of bank failures is predictable. The behavior of the US Government has protected all those banks and their Joe-Average customers as well.

Well so far I'm not sure this worked - I've just heard that in, for example, Santa Fe there are 40-50 new homeless every day. Maybe the gov't has prevented this from being double that, I wouldn't know.

>But why would this have to affect these people? If the whole system is so sensitive to its banking, and the banking gets gangrenous, are you saying it can't be surgically removed, only shot with the patient? Then there's something seriously wrong with the whole system.
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>Precisely. Once the mess settles you can be sure that Government will turn its attention to "the system" and the perpetrators who never can be trusted that way ever again. The system will change. Ayn Rand proponents will try to assert the opposite but the "heroes" in this chapter aren't the free-marketeers, the heroes are the bureaucrats.

As my dad says, "from your mouth into God's ears". Actually, I'd like them to be administrators, not bureaucrats. Any bureaucracy has one goal: to stay and possibly expand. An administration would be more a stewardship.

>All the more reason to go back to the times of 200+ years ago when the banks weren't allowed into the US, with a good reason.
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>Do we have a new Amish converrt amongst us? ;-)

Nope, more of a Jeffersonian. The more I hear of how he envisioned the functioning of the Republic, and how there wasn't any room for banks in that vision, the more I like him.