In the category of "so soon old, so late smart"

------------
Bernanke Foreshadows End to Fed's Hands-Off Approach to Bubbles

By Craig Torres

Oct. 16 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke
signaled an end to the Fed's decades-old aversion to interfering
with asset-price bubbles as the financial crisis reshapes some of
the central bank's most firmly held views on regulation and
monetary policy.

Officials should review how supervision and interest rates can
tackle the ``dangerous phenomenon'' of bubbles in housing, stocks
and other assets that risk bringing the entire economy down,
Bernanke said yesterday. He also warned that banking may be
concentrated in too few hands even as mounting losses and
corporate failures push lenders into mergers.

``There is no doubt that as we emerge from the current crisis
that we are all going to look very hard at that issue and what
can be done about it,'' he told the Economic Club of New York in
response to a question after a speech.

``It's a big change,'' said Ross Levine, a professor of economics
at Brown University in Providence, Rhode Island. ``It brings up
one of the major failures underlying the crisis.''
snip

Housing Epicenter

Bernanke reiterated that the decline in house prices and surge in
foreclosures remains the ``primary source of weakness'' and
indicated he was open to further steps to stem the slide.

The central bank has been criticized for fueling the housing boom
that later turned to bust by keeping interest rates too low for
too long in the first half of this decade. Fed officials have
spent years wrestling with how to prevent bubbles without
damaging the economy, and few have come up with an answer.

snip

`Too Big to Fail'

The U.S. faces ``a very serious too-big-to-fail problem,'' in
which the insolvency of a large financial company could threaten
a market collapse, Bernanke said in reply to an audience
question. ``There are too many firms that are in some sense
systemically critical.''
snip
==========
for complete article click on
http://www.bloomberg.com/apps/news?p...d=apSQDdFroxBs

If a person can have their drivers license revoked for habitual
speeding or "reckless endangerment," even if they drive for a
living, i.e. CDL, I see no reason not to revoke the charters of
banks that engage in "habitual speculation" or "reckless
lending."

As for the firms that are "too big to fail," either break them up
or enact special governance requirements such as governmental
representatives of their boards of directors with voting
membership in the critical executive and compensation committees.

As a culture we do not fatalistically accept periodic plagues and
epidemics as the "will of god," but enact and enforce pure food
and drug laws, pure water laws, and mandatory immunization to
prevent these from occurring in the first place.

As a society we do not fatalistically accept injury and death in
the work place as the cost of economic progress but implement
preventative measures through OSHA and other
regulation/inspection.

Why then do we continue to fatalistically accept economic "booms"
that benefit the few and the "busts" that affect us all?


Unka' George [George McDuffee]
-------------------------------------------
He that will not apply new remedies,
must expect new evils:
for Time is the greatest innovator: and
if Time, of course, alter things to the worse,
and wisdom and counsel shall not alter them to the better,
what shall be the end?

Francis Bacon (1561-1626), English philosopher, essayist, statesman.
Essays, "Of Innovations" (1597-1625).