Amrix

I’ve been contemplating this economic crisis for a while now.  This is the biggest question I have, why are the banks being bailed out? 

Surely if a private business goes bankrupt, then that is tough cookie?  If I run a business and take risks, if the risk pays off, I become quite wealthy and if it doesn’t, then the business will fail.  Isn’t that what capitalism is?  Don’t we live in a free market?

I’m not sure people would be so passive if they understood the reasons behind the banking failure.  Unless they really don’t care that rich corrupt people and often politicians are bailing themselves and their rich friends out?

Over the last 10 years, the banks, the shareholders, the mortgage brokers, the investment companies, the surveyors, the estate agents, the solicitors and politicians have been making a fortune from bad debts.  Yes, everyone has been making a lot of money, and the old saying is true, “the rich have been getting richer”.  Politicians have shares in banks, in fact every fat cat has shares in banks, and the dividends are paying off nicely. 

Banks have been taking huge risks, borrowing money from the government, lending to people with no income, with bad credit at 100% of the house value, and at each step everyone has been taking a large cut.  All seems good, the economy is growing and jobs are plentiful. 

So if banks, who are private companies (predominantly owned by rich people) and have borrowed billions from the government to finance bad debt, go bankrupt, why should taxpayers finance their bailout?  Why should my tax money finance the rescue of a private business which has unscrupulously invested badly.  These men and women have been paid ridiculous amounts of money, and now I’m buying their toxic debt. 

I don’t want to buy their toxic debt, I really don’t!  I would rather banks go bankrupt, so that market opens up for new banks and new businesses, so the working class and future entrepreneurs will have a chance to succeed and compete. 

Which brings me to this example from nature:

Wildfires are a natural occurrence and serve important ecosystem functions. Forest landscapes are dynamic and change in response to variations in climate and to disturbances from natural sources, such as fires caused by lightning strikes. Many tree species have evolved to take advantage of fire, and periodic burns can contribute to overall forest health. Fires typically move through burning lower branches and clearing dead wood from the forest floor which kick-starts regeneration by providing ideal growing conditions. It also improves floor habitat for many species that prefer relatively open spaces.

The economic crisis that we are seeing is like a natural wildfire, it serves a purpose and rather than avoid it or stop it, we should acknowledge it and use it to our benefit.  Preventing banks and businesses going bankrupt is not healthy, and the future generation will pay for these mistakes, while the few who are wealthy in the current generation benefit.