mdman

If we do ever get round to lynching bankers (which would be the first step to restoring free markets that allocate capital effectively), his should be the first head on the chopping block

Banks made bad loans. Regulators let them. Banks valued those loans fraudulently on their balance sheets. Regulators let them. Banks packaged those toxic loans and their derivatives and missold them onto suckers. Regulators let them Banks pretended they had more capital than they did using CDS sold by AIG. This allowed bankers to pay themselves bigger bonuses. Regulators let them. Regulators allowed this orgy of fraud partly because bankers bribed them with jobs, and partly because governments relied on ponzi financing created by banks to maintain deficit spending on election promises. Government officials were also easily bribeable. This led to bank collapse. They were bailed out because of bribes to governments. The bailouts and continued deficit spending leads to sovereign debt crises.

As mentioned before HELOC valuations A Citi banker admitted that they knew 80% of mortgages going into MBS were garbage, but did not disclose this to investors (revealed under Congressional testimony) Fraud is fraud whether or not it is against the law or not. Bankers have subverted the laws against fraud through political lobbying. This began with preventing effective of derivatives (and driving out Brooksley Born). The result was AIG writing CDS it could not possibly cover in event of credit event - a form of insurance fraud US bankers aggressively lobbied Congress in 2009 who then put a gun against the head of the FASB over asset valuation. This turned mark-to-market to mark-to-fantasy. The fraud-driven temporary boost to profits and GDP from these measures are well documented by William Black. The long term effects are catastrophic for society, resulting in a net wealth transfer from taxpayer to banker-fraudster Mervyn King has consistently warned the UK banks were underprovisioning for loan losses to the tune of tens of billions. UK regulators were captured with the FSA becoming the bankers' bitch from 1997 onwards. Finally, the most compelling evidence - we have had bailouts! If banks hadn't engaged in balance sheet fraud, regulators would have forced them to boost bank capital and reduce bonuses (or seek external private sector/ sovereign wealth capital injections) long before they became capital-impaired. The TBTF banking industry is Enron on steroids.

They are crooks. Blatant crooks. The regulators are also crooks. What normal people spent their money on depended on the credit they were extended. That credit was inflated by banks who did this by engaging in massive systemic balance sheet fraud. If they hadn't done that, the credit boom would have been far smaller. Bankers were the criminals. Regulators and politicians were the cops who got paid off by the bankers. All of them deserve lampposts.

That bit I agree with. But there was regulatory capture. Bankers got lawmakers to ignore fraud (starting with the FBI warnings of an epidemic of mortgage fraud in 2004 resulting in Bush reassigning them to fight the 'war on terror') by bribes, donations, lobbying and the promise of future employment. That doesn't alter the fact that they committed fraud. In addition, Wells Fargo laundered money for drug cartels, JPM bribed council officials over an auction (and expropriated money from MF GLobal customers), some banks broke the arms export ban to Iran and all abandoned fiduciary duty to their clients. Many frontrun trades and engage in insider dealing, some are guilty of naked shorting and price manipulation through wash trades. They are lawless SOBs. Just because their crimes weren't prosecuted doesn't mean they're innocent.

You forgot the bit where bankers engaged in balance sheet fraud Bankers bribed governments to allow opaque OTC derivative trading not backed by margin or capital requirements in case of credit event Bank fraud allowed bankers to pay themselves bonuses out of the company that should have been retained as bank capital When the collapse began, bankers engaged in even more fraud and lobbied governments for bailouts and legalisation of their fraud Bankers continue to engage in fraud (such as marking helocs at 100c on the dollar on underwater properties) When a thief continues stealing from my property and the police collude with them, I will take the law into my own hands. If the people understand the theft that is happening, bankers will get lynched. De minimus, there should be an international criminal court convened targeting the boards of directors of all bailed-out banks from 2004 onwards (when mortgage fraud was first warned about).

By this reasoning, it should be perfectly ok for a large group of people to lynch bankers - another example of survival of the fittest. Glad you agree

There is a big difference between these zombie companies and zombie banks - the latter are being propped up by fraud. Zombie banks inflict far more damage to the economy

HL Mencken had the right idea back in the 1930s - the first order of business for a failed bank is to hang its board of directors However, what would have been better would have been a vehement anti-bailout policy for failed banks. Let them collapse, wipe out shareholders, haircuts for bondholders, and guarantee domestic retail deposits only (as they did in Iceland). As it is, the series of policy decisions following bank failure that have resulted in massive wealth transfer from taxpayer to banker while we plunge into Depression means that senior bankers must now pay for their actions with their lives.

Supply and demand of houses has got bugger all to do with house prices. Same goes for land available. Otherwise Bangladesh would be house price king. It's all to do with supply and demand of credit to buy houses.

It's not capitalism when bankrupt banks get bailed out and given the green light to commit ever larger frauds

Not talking about those with suicidal intent, rather those with the honest intent to treat themselves and getting it lethally wrong.

Who are they? The Icelandic people or the private bankers? The World is hooked on debt-fuelled growth. Those who don't pay their debts don't get new loans.

That's quite different to private healthcare markets as we understand them. My criticism was of insurance-based models. I think the flaw with your model is that medico-legal costs are high due to high cost lawsuits, so insurers will demand a highly regulated workforce to insure. The state will demand clinicians carry insurance in case of mistakes/ negligence. And the massive control you see in this market suddenly appears. I'd agree with lifting restrictions on the supply of doctors. There is no private restriction on drugs or treatments, just NHS restrictions. Lifting restrictions on who can buy drugs - you will end up with anecdotes of people killing themselves followed by screams that something must be done. It is a fair libertarian stance to take though.

What kind of free market works in healthcare? The private insurance market most definitely doesn't. As healthcare inflation takes root, insurers increase complexity, co-payments and exclusions. Their corporate goal becomes to identify the healthiest people alive and offer them the most expensive insurance they can. That is not what we want from a healthcare market. The scam has got so monstrous in the USA that Obamacare now mandates healthy people must purchase insurance. It is a straightforward milking of the citizen by corporation and Government - absolutely no free market benefits whatsoever. The Singapore model mentioned earlier sounds intriguing. About the NHS, politicians have been decrying its inefficiency for many decades, even as it is objectively one of the most efficient healthcare systems in the World. The coalition ruse over productivity is that latest example of this. The drop in productivity had to happen because queues were so long and wards were so full. That drop in productivity came with an improvement in quality, which is what everyone was crying out for in 1997. Given we are one of the few systems that is free at the point of access (including it seems to most foreigners), and we all no from our economics that lowering price reduces demand, I think the NHS does remarkably well. Those who want a free market in healthcare can go private if they wish. They could reflect that at least their subsidy to the NHS is less than the US taxpayer subsidy to Medicare/ Medicaid, even though the NHS treats a vastly higher percentage of the population.