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The Register has a eminently readable explanation of why big banks are considered too big to fail, and get government bailouts after mismanaging their financial situations.
We seem to rage every time this happens, Let them go Bankrupt! seems the cry from the man in the street.
But that is a juvenile approach which will hurt far more people than those few officers miss-managing the bank or its funds. Banks don't have funds. Its all your funds. And if the bank fails, you mostly get nothing.
The article explains just what banks are (for those of you who slept through Econ 101), and what they are not. Its worth a read! And don't skip the comments section on the article. Many posters had no problem with bailing out the banks, but railed against bank management officers who rarely or never face any serious charges.
When you look at it this way, the federal "Stress Tests", and Forced Closures (over 500 since 1998) imposed on US banks, large and small, was the right course of action when combine with holding our collecting noses and bailing out the big ones.
Its too bad the stress tests, measuring a bank's ability to withstand withdrawals, loan defaults, and deposit slow-downs from unemployed depositors, weren't imposed far earlier. Local and national Banks have learned at least part of the lesson, and are closing money losing branches at a record rate, in favor of ATMs and digital services.
(Score: 2) by K_benzoate on Tuesday May 19 2015, @05:24AM
That sort of capitalism made sense back when acquiring capital could be little harder than walking a few miles over the horizon and simply claiming a some dozen acres of productive land. Capital, land and natural resources, were just there for anyone to claim and make use of. Now, everything and everywhere is owned by someone and if you weren't lucky enough to be born with some endowment you have only one thing to sell to earn your living: your labor. Human labor, even for educated people, is quickly becoming obsolete. We already have more people than we could ever possibly put to work doing anything useful or necessary. Not everyone can be trained for high-level theoretical work. Not everyone is talented enough to be a worthwhile artist. What are they to do now that rent is charged for use of every square meter of Earth's available land?
Capitalism has absolutely no acceptable end-game for dealing with these billions of people. If you just let things play out according to the laws which naturally obtain the results are horrifying and predictable: grinding poverty increasing in scope and scale, violence, loss of life and property.
Call me a dreamer but I think civilization can do better than a death march into capitalist Gotterdammerung.
Climate change is real and primarily caused by human activity.