No regulation or new tax is needed

Stephen Harper has announced what he feels should be the key objective of any united G20 policy towards the banking industry:

The key objective, Prime Minister Stephen Harper said in Paris on Friday, is to ensure that taxpayers, in Canada or elsewhere, will never be on the hook to bail out big banks.

Here is a crazy and radical idea: why don’t we just not bail out big banks?

There seems to be a myth that someone or something forced governments to bail out their banking industries. The truth is that it was a policy decision that they all took and it was a bad one. The global market would be better off, in the long run at least, if all those banks had been allowed to die. They could have been replaced by smaller banks who had not lent money to people who couldn’t possibly pay them back.

Mr. Harper, objective achieved.