There was a time when the bank had to be the most trustworthy institution in town or else nobody would hand over their money to them. People understood that they had a responsibility to keep an eye on the bank, and banks understood that if they lost the public trust, they’d fail.
But along came the FDIC, and the public decided that even if the bank failed, they’d get their money back, and the banks realized that they no longer had to be so careful about who they leant money to. The final straw was “too big to fail”, further increasing the “moral hazard” of banks and other financial institutions.
Of course, those who believe it is the role of government to manage the economy have used the current mess as an excuse for increased goverment control. But in fact, the current crisis is a result of decades of growing interference in the economy. The only people who win in this game are the politicians and bureaucrats. Don’t try to fix things by passing more laws; start by repealing some.
boozoothatswho about 15 years ago
Wow. And if he lived in England, he wouldn’t have had a chance.
Dry and Dusty Premium Member about 15 years ago
ROFLMAO!!
pschearer Premium Member about 15 years ago
There was a time when the bank had to be the most trustworthy institution in town or else nobody would hand over their money to them. People understood that they had a responsibility to keep an eye on the bank, and banks understood that if they lost the public trust, they’d fail.
But along came the FDIC, and the public decided that even if the bank failed, they’d get their money back, and the banks realized that they no longer had to be so careful about who they leant money to. The final straw was “too big to fail”, further increasing the “moral hazard” of banks and other financial institutions.
Of course, those who believe it is the role of government to manage the economy have used the current mess as an excuse for increased goverment control. But in fact, the current crisis is a result of decades of growing interference in the economy. The only people who win in this game are the politicians and bureaucrats. Don’t try to fix things by passing more laws; start by repealing some.