First, Megan McArdle: “Banking without risk is impossible“:
The fundamental fact of a banking crisis, which is different from a crisis in any other industry, is that if people believe a financial institution to be bankrupt, it actually is bankrupt. As Arnold Kling puts it, banks exist to reconcile the desire of households to lend short and borrow long — we want to have bank accounts we can empty at any time we want, but we want mortgage loans that carry fixed payments and last for decades. In financial parlance, the bank accounts are liquid — it’s easy to turn them into cash — and the mortgages are illiquid; if I want to get my money out, I have to find someone who wants to buy a mortgage on your house.
The only bank without a risk is your mattress — and even there, moth and rust doth corrupt, and thieves break through and steal.
Next, from the always-brilliant-and-ever-provocative Daniel Hannan: “The best thing for a company to do is honestly to maximise its profits“:
Companies are covered by the same general laws as the rest of us. If they lie about what they are selling, or breach their contracts, or adulterate their produce, they can be taken to court. Common law, growing like a coral, case by case, continuously adapting to new circumstances, is generally a better redress than a parliamentary statute, which will generally create unintended costs and injustices.
I can think of three important exceptions. One is where the externalities are diffused, making it hard to identify a specific victim: acid rain, say, or leaded petrol. A second is where the cost falls upon something other than a legal person – the suffering involved in battery farming, for example. A third is where ownership rights alone cannot prevent the depletion of a resource: quotas to keep fish stocks sustainable are the obvious instance. In these cases, even the most ideological libertarians generally allow that state regulation is beneficial. In general, though, businesses want good reputations, strong brands and loyal customers. They are as entitled to a presumption of innocence as anyone else.
A late addition: Mollie Hemmingway weighs in on helicopter parents and neighbors vs. free-range children:
Many parents just can’t accept the reality that we’re not in as much control of our children as we wish. Last week my nephew went to an outdoor camp in Colorado with the rest of his 5th-grade class. They were supposed to stay just one night. Floods hit the region, the roads washed out and filled with boulders. There was nothing anyone could do. After being stranded for three days, the parents heard about plans to airlift the kids out via Chinook helicopter. That plan was halted when some parents complained it was too dangerous. Who knew that helicopter parents would be threatened by actual helicopters?
Never mind that riding on a Chinook would be the adventure of a lifetime for a 10-year-old. Perhaps because there were no other reasonable options, the airlift commenced the next day. Every child survived and my nephew reported that “No one ever had so much fun in a natural disaster.”
Last, but not least, Stephen Green’s “scary ass chart of the day“. Nope, not posting here — go see for yourself. ..bruce..