We ceased having a profit and loss system when the Reno Justice Department threatened financial institutions with red-lining. When the institutions caved and began the worthless paper shuffle backed by taxpayers, there was no longer a profit and loss system, only a democrat engineered socialist cesspool.
Then if all of what you say is true and I believe it is, then this bail-out is simply the redirection of the costs for sub prime loans away from the private banks and toward the stupid citizen tax payers who voted for the Democrat politicians who caused this mess.
“We ceased having a profit and loss system when the Reno Justice Department threatened financial institutions with red-lining.”
You are correct.
But let’s think about incentives for the future (moral hazard).
Let’s say we have a bailout. Later, the Government strong arms lenders again. They will comply of course.
Let’s say we don’t have a bailout. Later, the government strong arms the lenders again. Now lenders can say “I can’t do it! I’ll go bankrupt!”
About the only thing the left understand is “I can’t do it.” They will never accept “I won’t do it,” or “I choose not to do it.” They don’t value the freedom of other people. I has to be “I can’t.” Then they usually say, “oh well, I guess you can’t.”
Maybe if the banks want to survive, they should take their case to the courts, the airwaves, and the people, and say “we were forced into this mess by a coercive government. We know how to lend, but we were threatened and bullied into making these loans.” We expect Muslims to risk beheading to face Al Qaeda. Maybe we should expect private firms to stand up to socialist bullying. Otherwise, bye-bye.