The Bailout

[Kralizec]

What I suspect is that banking just isn't an industry like car making, and, if market disciplines cannot apply (because a big bank cannot be allowed to fail) then nor should market incentives (fat bonuses and dividends). As a rule a fat return should be a price for a high risk and as we have all just had deomnstrated actually running a bank is a low risk activity.

Agreed. I generally prefer a hands-off policy in economics, but if it can't be consistently applied by letting busineses go bankrupt when they up, then them. I'll take a regulated, stable market over the sort of corporate buffet that the USA seems to become.