Chris Butler_

Banks: Nationalize, Cleanse and Get It Over With

Number one, why is "stability" in any market so important? Markets are inherently unstable because the components of these markets - human beings - are not inherently in any kind of equilibrium! "Stability" is a pipe dream.

Number two, why is it so important to have a "comprehensive solution" at all? How about this comprehensive solution: bank that should fail, fail? What happens after that, happens. The system will rebuild and we will learn from previous mistakes.

Number three, if we're scared we'll lose trust in our banking system, the question should not be "how do we restore that trust in these poorly run banks?" but, rather, is the current lack of trust warranted? The answer is "yes." People learn, they move on. If they pull their money out of all banks, and all banks fail, perhaps there was a problem with the current banking model. I bet a better model would be borne from this collapse.

Finally, you state that "we risk a loss of confidence among the rank and file" if we don't go full-bore nationalization. I disagree. Complete nationalization of the banking industry would immediately result in a lack of confidence among the rank and file. Look at thow markets reacted from nationalization fears coming out of Europe yesterday.

Bottom line, if you think bureaucrats can run banks better than the free market, why not let these same bureaucrats run everything? The thing about free markets that people don't quite get is that "free" also means "free" to make mistakes. Either we retain the freedom and allow for the all-too-human propensity to err, and accept the pain that some of these mistakes lead to, or we allow our "mistake free" government to try their best to do a better job by usurping freedom and accept their mistakes that were never supposed to happen. How well do think a central planner can anticipate the next move in a complex adaptive system like our economy? We need only look to the success of economic forecasts in the past. Wethermen have better records.

Sorry, I'll take my mistakes with a heavy does of personal freedom, thank you very much.