Yo're right I did hit far off the point I was making which is: Hard libertarians read this story as market signals were distorted by government. We might as well be burning silos of wheat.
Social Democrats are predictably reading this as an example that markets do not protect themselves against unacceptable results.
But it seems that anyone without an ideological attachment is siding with the latter. Of course this is dangerous as it probably means a wholesale swing towards that side which comes with a whole lot of completely unrelated stuff.
> Social Democrats are predictably reading this as an example that markets do not protect themselves against unacceptable results.
Yes, but Social Democrats haven't figured out that regulation doesn't eliminate risk. Financial regulation in particular concentrates risk. The "most effective" reduces the probability of a loss but increases the magnitude even more, increasing the expected value (which is the product of the probability of a loss and the loss's cost if it occurs). This can be a bad thing if the expected value is catastrophic, as we're seeing.
We're much better off with continuous small failures than we are with occasional large ones.
Social Democrats are predictably reading this as an example that markets do not protect themselves against unacceptable results.
But it seems that anyone without an ideological attachment is siding with the latter. Of course this is dangerous as it probably means a wholesale swing towards that side which comes with a whole lot of completely unrelated stuff.