The Common Good

The Notorious I.B.G.

The New York Times pointed out, last Friday, that while the stopgap effort to stop last fall's financial crisis did work, efforts to make the obviously-needed fixes to avoid the next crisis have not gone anywhere yet. The problem with "too big to fail" banks is that they encourage disastrous risk-taking, because bankers and investors are allowed to reap windfall profits when their risky speculations go well, but the taxpayer steps in to bail them out when the bets go badly:

In the days that followed [last fall's financial crisis], nearly everyone seemed to agree that Wall Street was due for fundamental change. Its "heads I win, tails I'm bailed out" model could not continue. Its eight-figure paydays would end.

In fact, though

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