>When you stop paying your credit card, or when WeWork ends up not being worth the price tag, the government doesn't step in to cover the bill.
I would append "usually" to that. The government doesn't "usually" step in. They do sometimes. They've done it twice across major industries over the last 14 years that I can see at the federal level, and more often individually, the latter usually dependent on industry and business relationship with the government. The risk there is pretty massive each time, though, and I don't think people fully appreciate it. Even if it's more of a perception issue, it poses serious problems.
For example, there are a number of people in this thread and millions nationwide that believe when a bank messes up the government will save the bank. That's an issue because it erodes confidence in the government while putting undue confidence in the stability of the banking industry. The more this happens, the worse the potential outcomes.
I kinda glossed over that under the assumption that it was meant as rhetoric regarding the 2008 crisis. It's definitely not true as a literal claim; banks quite regularly write off consumer debt that can't be collected or corporate investments that didn't work out. When you stop paying your credit card, or when WeWork ends up not being worth the price tag, the government doesn't step in to cover the bill. (They do step in for mortgages, and I agree they shouldn't.)
> It's worse, though, because on an individual level the banker has extremely minimal risk with their investments and loans. JP Morgan may or may not be at risk if they invest tons of money foolishly, but Jack the banker at JP Morgan has risked exactly $0 of their personal capital on the same bet. If the bet succeeds, Jack makes a million dollars. If the bet fails, MAYBE Jack gets fired. More often, he gets another crack at it because things don't always go well and the company has an appetite for this kind of risk.
This is definitely a real and important problem.