Retribution is a public good

By Fester:

Investment capital is risk capital.  It should be at risk when the investment produces an amazing fiasco:

Bloomberg:

The U.S. government is prepared to provide more than $7.76 trillion on behalf of American taxpayers after guaranteeing $306 billion of Citigroup Inc. debt yesterday. The pledges, amounting to half the value of everything produced in the nation last year, are intended to rescue the financial system after the credit markets seized up 15 months ago.

I am okay with bailing out the financial industry to prevent a massive run on the bank that freezes credit markets and destroys day to day commerce and economic interactions due to external sand thrown into the gears.  I am okay with that.  However this is a massive fiasco where risk should actually mean a risk of loss is actualized. 

Citigroup's shareholders are not being wiped out, the senior management is not being replaced, and their internal controls are not being examined.  So no one learns, no one figures out that it is a good idea to go against the crowd when something amazingly dumb is happening as contrarianism could threaten next quarter's bonus, and besides one or two good years sets an executive up for life. 

So we'll see a repeat of this crisis again as it pays not to learn.  Damn it, I can lose a couple of trillion dollars in value and wealth for far less cost than Wall Street and I bet I could do it for less systemic risk as well.  But no, we can't harm the people who put this country and the global economy in a cascading failure, or they might learn something.