The quicker we put failing banks into receivership — temporary nationalisation if you will — the quicker they can be restructured to put the working pieces back into play, at the least cost to the taxpayer. Regretfully, but quite correctly, the bank’s shareholders will, and should, lose their shirts. Because unless they suffer the pain of their bad investments banks will not regulate themselves from behaving badly again — and without a hefty amount of self regulation banks will not be able to attract much capital in the future. Out of that suffering will come some good. Any other way rewards the greedy banks, their unquestioning investors and their complacent employees at the expense of the long suffering taxpayer, it puts the country deeper into debt and insures an undisciplined industry from the moral hazard of their own mistakes. Unacceptable.
Tag Archives: bail out
The Wall Street bail out bill got rejected today, for better or for worse, as Bo and I were visiting the Capitol. Unfortunately we missed actually witnessing the vote take place on H.R.3997* while we were standing in line to get into the House of Representatives’ gallery. Representatives were scurrying around the building and gallery visitors rushed out after the vote. A small contingent of demonstrators dressed in pink were holding a noisy “Tax Revolt” outside. We saw democracy in action today. All in all a very good day to visit the legislative capital of the USA!
*A revised bill H.R. 1424 passed the floor a few days later.