Banks Fail All The Time

Nobel Prize Winner Joeseph Stiglitz argues for letting the banks go through an organized bankruptcy. He raises some interesting issues such as a big issue in valuation of minority interests is who has control. The Government has pumped billions into the banks and we have zero control. He argues for a plan similar to that used by Sweden when they took control (nationalized) thier banks during a crises.

The whole issue of bank failure comes down to our views on what is right and wrong. Most people don't realize that they only hear about our bifurcated legal system. first we have courts of justice. These get played out in cop and court dramas on tv sets around the world -- L.A. Law, Law & Order, Homicide, the Wire, and so on.

Never do we see a show about the legal system that runs on reverse polish notation (RPN) like the backwards HP calculators. I am talking about the courts of equity that are nearly as old as justice courts. Traditionally, they were run by the church. With due separtation, these courts are now run by the government. Equity of the debtor and creditors is ostensibly the goal. The biggest justification for this is that Kings of Europe learned that the peasants would get restless when they or thier friends were forced out on the streets with their families. So forgiveness, not justice, reigned and became codified.

Of course, many hold to the burn-in-hell notion of payback and in practice leave forgiveness out of the temporal realm.