Friday, July 30, 2010

How the financial meltdown is like Calvin and Hobbes

Writing a blog post on the Glass-Steagall Act (which will appear tomorrow) made me think of my favorite Calvin and Hobbes sketch. So, I decided to do a separate post on the financial meltdown and how we rewarded those who caused it.

In the late nineties, we deregulated the banking industry (repealed Glass-Steagall). I guess we just assumed that wall street bankers would be extra careful with our economy.

But, of course, they did ridiculous things with our economy, like over-leaveraging their assets.

We thought maybe they had just damaged a small portion of our economy. But alas, they had designed the mishap to be catastrophic and complete by spreading their problems throughout the entire system.

At first we were mad.

But then we realized that if we didn't teach them responsibility now, they would soon be ruining much more of our economy.

So, we shielded them from the consequences of their actions... and taught them to do it again.

Unfortunately, wall street bankers are not children (though they may act like it). They are adults with the God-given right to conduct their business to the detriment of everyone else.

1 comment:

  1. Wow! The lessons we learn from cartoons...