No More Bailouts!

[midwestyankee]

If the executives who make these bad judgment calls went to prison (not one of the country club federal prisons) for a decade or so, maybe other bank execs would start paying closer attention. As it is now, there are no incentives to manage the business as a business that could fail.

I agree. But first you have to prove that they broke a law.

 

[ChristopherMaxwell]

Nationalisation has a place, but only if it's temporary. You don't wish to have dead weight for sixty years. Seize the company or bank, then sell the bloody thing off to the right folks. I can see that Netzach has a point about not wishing to have a one-sided arrangement where we rescue the banks and get nothing out of it. We just need to make sure that it doesn't become a financial burden.

If it were up to me, we'd nationalise all banks and then re-sell the buggers to the right people. Don't keep them, but don't leave them to the same stupid wankers who ran them into the ground. There should be fair market compensation to the shareholders, however. Then we turn it around it and sell it at a profit (thus helping with balance-of-payments deficits, too).

I call myself a progressive capitalist, not a socialist.

 

[waaitg]

Yes, regulatory capture is a problem. But beyond that, how do you propose writing specifics-oriented regulations that some smart guys with a lot of money and motivation won't be able to get around? Even if the bank lobby doesn't lay a hand on the regulation-writing or enforcement process, this is not likely possible. Bank robbers will always find a way around the most sophisticated protection systems.

Hence the need for a blanket piece of legislation. If you would like an example, prohibition comes to mind. Is it draconian? Yes it is. but what else do you do when spot fixes fail time and time again? Bank robbers will find ways around systems, but bank robbers can't get away with saying "technically this is legal". The problem we have is that these leveraged bets resulting in massive bailouts can always day "well what we did is legal so now we have a right to ask for help".

As a personal observation: I do find it funny that in the US writing a bad check can be a felony, but that you also suffer from these massive bailouts. It seems ironic to me that as a result of this, small every day people who make a mistake with their finances can get a get criminal record, but a financier can buy himself a lawyer and escape the consequences of his willful Billion dollar fraud.

 

[Keroin]

http://verydemotivational.files.wordpress.com/2012/05/demotivational-posters-banks.jpg