What might have happened if banks were allowed to fail?
I think that bad behaviour on the part of banks is due to the lack of consequences. I am not sure that I subscribe to free market ideals, but it seems to me that even if all the banks failed at once then others with money would have found a way to lend and prevent a long term liquidity crisis. It’s the management of the system by governments and other agencies which prevents the removal of the bad actors and the finding of a new equilibrium without them. I’m sure current banks could be outcompeted on a level field.
All the free market advocates I have heard of are not really for a free market at all, they supports the current status, which is far from free. Rules are partisan and knowledge is kept obscure.
I don’t think I am a free market supporter because I think that free market capitalism will scrape all life off the planet in it’s collective quest for growth. In any case, free markets don’t really exist, and the more you try to support them, the LESS they exist! I suddenly see it!
Carbon
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