The danger of these institutions, and why they should be taken under by the govt is not that they “couldn’t” become profitable. The danger is the institutional greed and stupidity that created this mess isn’t going to be dissipated unless the companies that engage in this kind of behavior go out of business.
It isn’t the job of govt to coddle the banks, well apparently it is the job because that’s whats happening.
I may be solvent someday, but if I stop making my mortgage payments today, they take my house away. The difference with the banks (citi bofa wells etc) is they are politically well connected.
Our elected leadership doesn’t even bother to lay out the case of WHY allowing these banks to either go bankrupt, or be taken under poses a systemic risk. They just tell us that this is necessary and pour TRILLIONS down the rat hole. There is no free lunch davelj. Whats left of the middle class is getting royally buttfucked to bail out people who made some of the worst choices imaginable.
These institutions have become poisonous in many respects. They have committed huge amounts of fraud. They have distorted markets, played a huge role in blowing a massive bubble and probably are not able to stand on their own. Citi for certain, several other large money center banks most likely.
Josh
