2008 financial crisis as Alchemy

The reason banks won’t underwrite Gab is because insufficiently PC banks are destroyed by the regulatory state. See the subprime lending crisis, caused by the government destroying banks insufficiently enthusiastic about lending mortgages to wetbacks.

-Koanic

This is a really good point. The article below gives a good description of the problem (if a rather naive proposed solution).

In fact, TARP (and its “sister act” from July 2010, “Dodd-Frank”) has made conditions particularly inhospitable for America’s better-managed, less-guilty banks. The handful of insolvent banks, which should have been left to fail, instead eagerly took TARP funds, with its attached strings, and lived to do harm for another day, thanks to political friends. America’s healthy banks didn’t need, seek, or require the public monies that were forcibly thrust upon them by Washington; they would have survived without those funds, and indeed would have been better off, by attracting funds transferred out of weak banks. When all banks were compelled to take TARP funds, all were smeared in reputation, and all were subjected to still more stringent regulations and larger subsidies (FDIC coverage was increased from $100,000 to $250,000) than they saw before 2008. In some cases, the better banks have been forced to pay huge fines without any proof of a legal tort. Even well-managed banks must now get permission from the Fed before paying executives or dividends. Not knowing all the facts, and colored by a long-term prejudice against finance and Wall Street, much of the public condones or applauds the political abuse of banks (to their own harm).

– Richard M. Salsman
To Understand The Financial Crisis – And Its Cure – You Must Read John Allison’s Book
Forbes.com

It’s an excellent example of what I call Alchemy in Overwatch theory.

The trouble with the proposed free market solution is that it ignores the predominance of post-material ethics, which invalidate the ideal of rational economic actors. This stubborn idealism sets the stage for exactly the sort of behavior described, where any abundance of capital incentivizes its own use for social engineering.