4 ms·
Empirically, a lot of early ventures into any area tend to blow up. The first people to try are, almost by definition, the risk takers. That is not to say the
by Lerc 2y ago
Empirically, a lot of early ventures into any area tend to blow up.
The first people to try are, almost by definition, the risk takers.
That is not to say they all blow up, or even that the ones that blow up do so because of this particular venture. Just high risk taking is correlated with both blowing up and trying the new thing first.
They may blow up from some completely unrelated risky venture.
- roughly 2y agoEmpirically, a lot of people who go to casinos also go bust.
- phkahler 2y agoStatistically everyone who goes to casinos for a long time loses.
- bluGill 2y agoAll the casino employees win despite going for a long time. Even when they lose they win - my cousin repairs slot machines, at the end of every shift he gets paid to lose the last of his test budget.
- int0x29 2y agoMost of those people aren't gambling with other people's money that they have a fiduciary obligation with.
- Lerc 2y agoYes, but you can't then say that they went bust because they went to the Bellagio.
- mmooss 2y agoRegulated banks are designed specifically not to blow up, because they take the money of innocents, of taxpayers, and the rest of the economy with them. That was a cause of the Great Depression, the 'Great Recession' of 2008, and many similar negative events. That's why the US created the Federal Reserve, deposit insurance (FDIC), and bank regulation - to prevent those things. > They may blow up from some completely unrelated risky venture. That's not the case with regulated banks.
- TeeMassive 2y agoHalf of the Great Depression was caused by tariffs.
- UncleOxidant 2y agoAnd the other half was unregulated banks?
- hcknwscommenter 2y agoThere were massive bank failures during the great depression. And, no FDIC type insurance. So depositors entirely wiped out. So conservative families, not speculating in the stock market or otherwise and "safely" saving their money in banks were simply wiped out. Stock investors also wiped out due to equity market downturn. Farmers wiped out due to food/commodity prices dropping. Every single asset class took its turn. Job losses quickly followed and then fed back on the stuff above to cause even more mayhem. There is no doubt that things like bank regulation and FDIC insurance made a massive difference and at least partly kept the great recession from becoming like the great depression.
- ty6853 2y agoFDIC would have solved the issue of contracting money supply, but the more direct cause was the federal reserve contracting money supply in the first place assuring bank failures in a fractional reserve system. FDIC is a bandaid for having a centrally planned fed rather than free market banking with private deposit insurance.
- mmooss 2y agoAnd lack of bank regulation to prevent their failures rather than just clean up after them. Even with all the tools, 2008 caused great harm.
- 2y ago