Back for more

In which the utter foolishness of appeasing banks seeking bailouts is again made clear:

The Republic of Ireland will have to go to the IMF/EU for another €15bn – on top of the €35bn already earmarked – to save the banking system, according to the government-appointed chairman of Anglo Irish Bank. In a bombshell revelation, Alan Dukes said we will need 40pc more, or €50bn, to properly clean up the banks. The former finance minister also sensationally suggested €75bn would be needed to fund the existing NAMA operation and a so-called ‘NAMA 2’ to take more bad loans from the banks.

All this to avoid forcing the people who own the banks from realizing their losses. Economists and governments have it precisely backwards. They aren’t saving the global economy by repeatedly bailing out the banks, they are actually killing it by foolishly feeding the debt monster right when it is on the brink of starvation.

The solution is simple. Don’t save the banking system. It’s like an oncologist trying to keep his patient alive by saving the cancer.