Quote from ssternlight:
You'd rather let the lenders fail periodically and pay out a couple of hundred billion to stabilize the system than regulate?
Hell yes, and I'll tell you why.
If you've ever worked in a really, really hyper-political office environment, you've seen the effects of "banning failure."
The last day-job I had was just like that. There were tons of regulations (aka "departmental policies") that specifically banned certain types of failure, such as:
Any day a Windows server administrator forgets to back up even one of the several dozen servers under his responsibility, he can be immediately terminated.
Now, you can imagine what kind of environment existed in the Windows group--everybody was supremely busy backstabbing each other to cover their butts and no one would ever take a necessary risk that might cost them their jobs. So, progress in that group slowed to a crawl, turnover increased, and team morale dissipated. Finger-pointing was the favorite hourly pastime.
By contrast, in the UNIX group (of which I was a proud team member), failure of one member led to other team members stepping in to provide immediate back up. There was no blame game--it'd just be good-natured ribbing. We were able to take bigger risks, eventually upgrading our technologies to self-managing hardware and software. We commanded higher salaries and worked roughly 30hrs/wk rather than the Windows guys' 50-60hrs/wk for 25% lower salaries. We had server uptimes ranging in YEARS (no reboots or shutdowns in over 365 days), and our problem tickets decreased from 10 to 20/day to about 1 every two days.
All of the other teams focused on banning failure and punishing those who failed. Our team and the networking group were the only two to focus on rewarding success and looking for better solutions. Sure, bailouts aren't the most-preferred solutions to come up with, but at least the focus is on success and not failure, moving forward instead of covering our butts.