> "Bank regulation tends to backfire"

Warning: <rant>

Hmm ..., let's see: As I recall, in the
1920s some "unregulated banks" were a
major part of the mechanism that caused
the US economic boom of the 1920s, the
stock market crash of 1929, the banking
crisis soon afterward, i.e., runs on the
banks, catastrophic shrinking
of the money supply, massive price deceases,
massive unemployment,
bankruptcies, the Great Depression in the
US, the US slowing buying from Europe,
the Great Depression spreading to Europe,
the great economic stress in Germany, the
rise of Hitler for a command economy,
which actually did get the German economy
going again, WWII, the deaths of maybe,
what, 50 million people, maybe 100 million,
ah, why sweat over few tens of millions of
people more or less (right, Marc?), and, then, some really
severe laws for the regulation of banks.

We said, "never again will the banks do that
to us". Indeed, from now on the banks
will be creatures of the US Federal Reserve.

But, in 2008, with not enough
regulation, the banks did it to us again. Hurt a lot
of people, and we got some more banking
regulations. BTW, we are still cleaning
up the mess the banks left behind,
once again, in 2008.

Paulson, Bernanke, etc. remembered with
full clarity and had no doubts: "Your
banking regulator is sitting right here,
and if you don't take this money you
will be declared capital deficient on
Monday morning. ... You will not leave
here before you sign the paper in front
of you." Paulson, Bernanke were just
determined, as immediately was Congress,
that the US banks would not fail;
there would be liquidity; the banks
would be well capitalized with plenty
of reserves with no doubts; there would
not be runs on the banks; AIG could
be $85 billion in the hole and cause
no problems, etc.

Bernanke was just determined not to be
the Fed Chair who presided over the
second Great Depression, e.g., from
banking regulation failures.

Marc, in the US,
we regulate the banks. The US Federal
Reserve, etc. has the banks by the short
hair, holds on with a tight grip, and
just will not let go. Marc, are
we learning, now? Are we getting some
clarity about banking "regulation"?

In many ways, in social and psychological
capital, the US is still recovering from
the severe damage and losses of the Great
Depression and WWII: People that lived through
those years,
and many didn't, often suffered horribly
and, thus, did some relatively poor parenting,
passing on a lot of really strong anxieties
and not nearly enough in security, insight,
social, psychological, emotional, artistic,
and intellectual capital. The anxieties
led to stresses led to depression, incapacitation,
more stresses, more depression, clinical depression,
a huge range of social problems, including
some suicides. I know far too much about what
I am describing. We're talking big deficits in
social and psychological capital passed from
parents to children. We have not recovered yet.
It appears that full
recovery will take a few more generations.
E.g., I can believe that a tribe in Brazil
that never saw civilized people is generally
much happier than people in the civilized
countries that went through the Great Depression
and WWII. Those tribes have no banks, bubbles,
and Great Depressions.

The Great Recession? Still a lot of people are
not yet back to work, and that situation is
well known to lead to more in abused wives,
abused children, alcoholism, drug abuse,
crime, infant mortality, divorce,
and suicides, little results like those.
Marc, you can understand wrecked families,
right?

It seems that banking regulation is just
crucial unless, of course, we want to kill tens of
millions of people a few times each
century. Ah, let's don't just mince words,
kill a few hundreds of millions of people
a few times each century? More? Sure, maybe
more! Right, Marc?

Sure, I know; I know; we can agree that the dangers
of unregulated banks won't last very long.
I mean, that is, don't you see, another
WW will mean we no longer need any more
banking regulations, or coal, natural gas,
oil, cars, houses, plastics, trash pickup, clothes, schools, hospitals, restaurants, smart phones,
libraries, the Internet, venture capital firms,
venture partners, or people -- there won't
be anymore people, puppy dogs, kitty cats,
birds, etc.

Gee, "Look, Ma, no more banking
regulations! Ma? Ma? Are you there, Ma?
Ma, where are you? Ma!!!!"

Thank you Marc. Your knowledge of finance,
banking, and economics is showing through
with great clarity!!!!!!

Gee, I thought that we were all supposed to
understand financial bubbles, the Great Depression,
etc. by, what, somewhere in middle school?
Marc, did you skip middle school? Maybe
you'd want to go back, sit in the front row,
and pay attention? And put away your
mobile devices.

Unregulated banking? I'd rather give chunks
of plutonium to naughty 8 year old boys just
to see what they could do with it.

Marc, unregulated banking is
the fast way to the end of at least
human life on earth. Wouldn't
be very good for your deal flow or
venture returns
either!

Sorry to be so negative: 50 million, maybe
100 million, dead, the suffering of my
ancestors and my wife's ancestors who
went through the Great Depression and WWII
and the Cold War tend to make me a little,
just a little, shall we say sensitive on this subject.
But, I'd rather be sensitive and negative
than silent and dead. Right, it's just
my opinion, and YMMV. </rant>