On backstopping the financial system

To those who believe that the solution to the crisis is for the government to backstop the financial system:  Surely one of the first lessons we should draw from the crisis is that as soon as the presumption is established that an institution can not fail, it ends up being so loaded with liabilities that failure is inevitable.

It’s better to live …
Horace Odes II.10
translated by Peter Saint Andre

It’s better to live, Licinius, neither
always pressing out on the deep nor, trembling
and cautious, hugging overly close to the
dangerous shoreline.

Whosoever cherishes the golden mean
safely avoids the squalor of a hovel
and discreetly keeps away from a palace
that excites envy.

Most often it’s the huge pine that is shaken
by the wind, and the highest towers that fall
the greatest fall, and the tops of mountains that
attract the lightning.

Hopeful in adversity, apprehensive
in prosperity is the heart that prepares
well for either fate. Zeus brings the winter, but
also takes it back.

For even if right now times are bad, they won’t
always be that way: for Apollo doesn’t
always tense his bow, but sometimes he inspires
the silent Muses.

When the straits you sail have narrowed, show yourself
to be undaunted and bold — yet also be
wise and tuck your sails when they’re swelled by too strong
a following wind.


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