Quote:
Originally Posted by Tyrone Slothrop
Before you were saying, banks aren't different. Now you're saying, if you can't stand the heat, get out of the kitchen. Look, no particular sympathy for bankers here, and I think finance often acts as a parasite on the country's economy instead of an enabler of it, but I would rather live in a country that has a functioning banking sector than one that doesn't.
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Banks are a business. The rules of business are that if one finds himself in a position where he is doing something risky, the market turns on him and he finds himself unable to sustain operations as a result, he has failed. That rule applies to every business, including regulated businesses like banking and insurance.
You have made two points in reply:
1. Well run banks that collapse as a result of bank runs are not failures.
I am sympathetic to this. I would not call those banks true "failures," but I am also sympathetic to the argument that he who doesn't reserve adequately to survive a temporary bank run has failed to properly run his business and is a failure. I can see both sides of this argument.
2. Banks are different, and we shore them up rather than allow them to collapse for good reason, and I'm glad of that.
I agree that banks are different creatures, and I am also glad that we avoid their failure as we do. But this doesn't address my point. My simple point is that a bank that requires the Fed to rush in and save it because it has taken risks it knew were questionable and which could place it in jeopardy is a failed business. The people who made the decisions that caused it to fail are failures.
And one may not argue that because the bank was rescued, and sustains operations today, it was/is not a failure. That which must be bailed out is that which has failed to survive on its own.
Again, I have some sympathy for the banks that were well run and got caught up in a liquidity crunch or bank run. It may be argued that is a failure of the market. But again, he who fails to plan for a failure of the market has failed to plan for something, hasn't he? So even these people, while largely victims, are a bit liable.
The one argument I will never listen to, and no sensible person should ever listen to, is the suggestion these banks that needed bailouts were not failures of a sort, but entirely victims of a malfunctioning market. Here's why: They Created That Market. They abused it, they let it become a monstrous bubble, and they had all the warning in the world that it was going to crash. I support bailing them out, but if they want a revisionist history to support the justifications for their obscene and undeserved pay packages since the collapse (while the little banks have had to suffer), fuck them. They get to have it said to them wherever they are, whatever they're doing:
You're a fucking loser, and you only exist in the comfortable state you do because you'd the luck of working in an industry where we couldn't let your dumb ass go down the drain. You are not a capitalist, but a corporate socialist. You're the very worst of everything shitty in this country. And no... I'm not giving you that three foot putt. Play it. You probably fucking cheated the whole way around the course so far.
