Quote Originally Posted by leo9 View Post
If you think a bank's losses are nobody else's problem, you really haven't been paying attention. Banks don't make money out of thin air, though they often talk as if they did, to cover up the fact that their money comes from the same place as everyone else's, the hard work of ordinary folk.

These losses will come out of the pockets of their customers, in poorer interest rates and higher charges, and out of the general economy, in less loans to business, depressing trade. Even if they never have to apply for a government bailout, they are sustained on the market by the certainty that the government will catch them if they fall: and the government's credit rating is the poorer because the markets know it could be exposed to that kind of unplanned cost. Which means that when the banks look shaky, government borrowing costs the government more, which comes out of your taxes. "No free lunch" applies to bad stuff as well as good.

It's all of a piece with what I've been trying to explain about social welfare issues like health and policing and emergency services. Society is all interconnected, that's what "society" means, and anyone who thinks they can live as a heroically independent individual within it is dreaming. Unfortunately, it's a dream that a lot of politicians and business leaders like to encourage, since people don't act collectively if they think their neighbours' troubles are nothing to do with them. Divide and rule at the personal level.

and this is? . . . hookay