"Ask them to explain first, what the word "socialism" means"
According to a random dictionary, socialism "advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole."
"to explain how that applies to the situation they've brought up by using that word."
Replacing insurance, which is a privately-provided service that is involved in the generation and distribution of wealth, with a government-controlled service funded by the public income, is synonymous with the quoted definition of "socialism".
And because it is funded with money taken forcibly from members of the public, the right to property is being violated.
As anonymous coward has already shown in another reply, this is your opinion, and your argument only works so long as you assume this is true for everyone. If your goal is to keep people alive, that's fine, and feel free to donate to worthy causes, but don't force it down everyone's throats, telling people they are responsible for everyone else, and must give up their rights to support that responsibility.
"Would you be kind enough to explain how compulsory (but not necessarily universal) healthcare implies losing property rights?"
Correction: it does not imply losing those rights, but having them violated. I work, and as a reward my productivity is converted into money that can be exchanged for others' productivity. I freely agreed to work for a given compensation to be paid by my employer. I exchange my productivity for property. To take away my property by force, against my will, is an unjustifiable, immoral violation of my right to my property (i.e. the right to the "sweat of my own brow" if you're a fan of Bioshock).
"publicly funded healthcare == socialism."
Well, going by a dictionary definition, socialism "advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole", which is commonly seen as "the government controls a service involved in the trade of money or property". Are you suggesting that insurance companies are somehow a special case that does not fit the definition of a "service", which when controlled by the government, would imply socialism? If so, how does it not fit that definition?
"On the balance, I think that a well-run social program can lift society more than the distributed burden it engenders."
The key here is to answer the following question: why must such a safety net be provided by the government at the expense of violating everyone's rights? If you believe there should be safety nets, invest in a company that provides such a service. What is the justification for forcibly taking away a portion of everyone's productivity in order to fund such programs? Sure, it allows easy access to lots of money, but it is also no different from theft.
But why must a bailout be provided by the government? If someone supports the cause of having safety nets for people, they can donate to a company that provides such a service. Why the need for mass rights violations?
"When I bought my house, there were easily several thousand pages of contracts. Either you have never bought a house, or you have an unrivaled tolerance for tedium."
If you don't like the complexity, hire a lawyer to go through it. Or tell them you won't buy unless they simplify the terms, and encourage other potential buyers to have the same attitude. If you're willing to sign without reading, then you assume that risk.
"What Obama is suggesting is having the state act like a big insurance company to which everyone is registered, while actual delivery of the service ("means of production") can and will remain in private hands."
Your argument only makes sense with your definition of socialism. If I take a dictionary definition, which includes "ownership and control of the means of production and distribution, of capital, land, etc.", then your whole argument vanishes, because insurance companies provide a service, and under your system, the government would do that service instead.
"the only difference is that the refund check for medical services is cut by the government rather than by an HMO"
But where does the government get the money from? That is the other difference. The money is taken by force, violating everyone's rights, rather than freely given by willing individuals.
I've been making suggestions the whole time. The problem with the popularity of the suggestions is that they usually involve doing work yourself rather than having the government force everyone to change for your own benefit. What it comes down to is simple: many people are willing to disregard rights when it is convenient, but I am not.
"Respondant: Because we used to do X and it caused Y problem."
I have only seen you disregard X by assuming that there was some past problem with it. I haven't seen you actually state what the past problems were with it, nor how those problems justify violating rights. If that information was provided, we might make some progress in the discussion.
"I am suggesting that it started as an ineffective and simple system like the one you're proposing and it grew into the one we have today for a host of good reasons that you're not aware of."
I ask again, what are these reasons, and how do they justify violating people's rights? I have no doubt that the system started out simple, but I do doubt that it started as secure (ie, free of risk) as the one I suggested you try out (if you're worried about the risk of the current system).
"If your suggestion is to tear it down and start over"
That is not my suggestion, as it would likely violate people's rights. My suggestion is, if you fear the vulnerability of the market, don't take part in it, and instead work on creating a much safer alternative that people will be attracted to. Whether it succeeds or not is up to you, and I do not care either way, because its success is entirely proportional to your desire for security.
I have no doubt that in the current market people are actually acting out this proposal as the result of the recent situations, the problem is that the government is lessening the blow by saving those who made bad decisions and spread misinformation.
"They're dangerous in the sense that you pointed out: There's moral hazard involved."
Only if the funding for these safety nets is acquired through rights violations. If you feel there should be safety nets, donate some fraction of your income to a company serving that purpose, and persuade members of the public - your friends, family, neighbors - to do the same. What you shouldn't do is tell the government these things are so important that it justifies taking by force a fraction of everyone's property, in direct violation of a right the government has been charged with upholding.
"You could stuff your money in a mattress and avoid banking entirely, and you'd still more likely than not end up poor and hungry if the banking system collapses."
In the current system, yes, because I cannot choose not to be out of the system. I could minimize my risk by being self-sustaining on my own property, or by only trading with those who do the same.
"We can either address those problems collectively or ignore them, and historically, ignoring them has not been a good option."
My proposal for you, if you fear the risk of the system, is not to ignore the problems with the system, but to sidestep them and avoid them altogether. If you can get others to see the same risk, they will want to do the same, and the system will have that much more incentive to mend itself.
"But taxation is a violation of fundamental rights, right? So you're suggesting that we have courts and police that are paid for voluntarily?"
That would be the ideal situation, although I don't see getting there anytime soon, if ever. Working toward that goal is the only option, by reducing the functions of the government back to what they were supposed to be, and thus slowly reducing the number of rights violations.
"Banking systems... do not evolve into stable, self-regulating entities without external planning."
You're confusing animal rights with human rights. It is your natural right to do whatever you please so long as you don't violate the rights of others. Do what you want with yourself and your property, and do whatever you want with others and their property - as long as you get their permission first.
"You accepted this when you accepted the benefits of your society."
What is the reasoning behind this claim?
"Immunization from diseases killing you at age 1, a decent education, roads / electricity / clean water.
These things can all be provided by private industry without rights violations, and competition would work to lower costs while giving customers more of what they want.
"You are basically taking your ball and going home while keeping every benefit that society has given you for your own success.
No, I am getting involved in discussions to persuade the public away from the constant rights violations, with the hopes of eventually leading to the nomination and election of candidates that uphold rights.
"Most people would call that 'selfish'."
As would I. Now you have to show why that is a bad word.
"In your model we would be living in caves."
A pithy, frightening claim backed up by no rationale or evidence should always be disregarded no matter how pithy or frightening.
"The real real question to ask is how PayPal can get away with forcing any person or company (bank or otherwise) to do with their property other than they wish."
If you don't like Paypal's terms, don't agree to them. It's that simple.
Being that we are humans, I thought it was clear what I meant. Life, liberty, pursuit of happiness. These are rights that we all have as rational beings, and it is immoral for one person to use their liberty to violate the rights of another.
You're talking about preemptively protecting yourself from rights violations with further rights violations.
"If we want to change the city, we require collective action."
Yes, you talk to members of the community and they gather to form a neighborhood watch to help preemptively prevent rights violations without violating other rights. If someone harms you, they can be brought to justice.
"If an epidemic spreads through the city..."
That is an emergency situation and has no bearings on determining how a normal (non-emergency) community should function. Obviously in an emergency the government would have to step in to stop widespread destruction and rights violations.
"Libertarianism is dogs eating dogs."
Who is advocating Libertarianism? The Libertarian Party is an unprincipled collection of people wanting laws changed for widely-varying and often contradictory goals. Despite their firm stance on drug legalization and "liberty", they nominated for presidential candidate the person who introduced the Defense of Marriage Act to Congress in 1996, and who has a long history of drug prohibition work for the DOJ and Congress.
Why would someone charge $500,000 if such a situation occurred? Nobody would buy and they would be stuck with the property. They would obviously have to reduce the asking price to reflect the market........
"This isn't a question of information. The reality is that nobody knows the future and that fluctuations in market values will happen."
Those fluctuations are caused by changes in information. Nobody need know the future, only the past and present, to whatever degree they are comfortable with.
"one of the end consequences is that the money you deposit is hard to keep track of."
But it need not be that way and the whole point of this discussion is to help bring about a different situation.
"It's not a question of whether it happens at "your bank" or not...."
Let me correct my wording: "If you don't know enough to be sure that such a "hiccup" could not affect your bank, you should take your money out of the bank and find somewhere else where you can be sure that they are not riding close to the tipping point."
"What you just described is creating a new banking system and letting it evolve into whatever the market would have it evolve into.
Indeed.
"That's how we got our current banking system, and it's a pretty darned good system."
That doesn't mean we can't do better. The current system will not improve as long as people keep getting safety nets for bad decisions they make.
"You'll run into the same problems people ran into over the centuries of banking, and generations from now, you'll probably end up right about where we are here."
I'm not proposing a new system. I'm saying that if you think the current system is subject to immense danger, take your money out of the system and only trade with people who agree to also stay out of the system; only then will you be able to avoid the risk. Do that, rather than violate everyone's rights with government regulation - forcing everyone else to change, rather than changing yourself.
"The short answer is that anarchy doesn't work..."
Who is suggesting anarchy? Someone needs to uphold and defend our rights, and that is what the government (through the courts and military/police) is charged with doing.
"We could take the principled path and allow a worldwide meltdown of the financial system that makes the Great Depression look like the late 1990s, creates armies of homeless, and kills a bunch of people."
You're attempting to show a direct causal relationship between a single action (or inaction in this case) and massive amounts of rights violations, by ignoring the actions and choices of millions of individuals inbetween.
Back to reality. People accept risk when they buy into a financial system, exchanging their productivity for a dollar amount with the hopes of getting a higher dollar amount from others' productivity. If the system fails, they can choose what to do from there. Some choose to continue working to be productive. Others may choose immoral actions that violate people's rights (theft, murder, etc). Those who choose to violate rights should be brought to justice.
"Alternately, we could work together to try to solve the problem by any means necessary."
I can agree with this, as long as these means do not involve rights violations.
And you did not answer the two conditional questions I posed immediately after that sentence you quoted.
Also, my purpose here is not to simply say "I don't like it" and leave, but to get discussion going that can eventually lead to candidates being elected who would rather uphold rights than violate them, eventually overturning the laws that do violate our rights.
That sucks for the sub designers that the only thing they have left to build their subs out of is steel and other non-toxic metals. The Chinese need to stop worrying about toys and start putting their lead where it is needed most.
"One of the principles of the social contract that one becomes a part of in a theoretically democratic society..."
When did I sign this contract? When I was born? Am I agreeing to this contract every second (since birth) that I do not quit my job, take all of my property on a plane, and spend my life savings moving to another country? Is that how the contract works in a "democratic society"? If so, where is this explanation written down, and how does it justify the violation of everyone's natural rights as rational beings?
"Your argument cuts both ways, one could as easily say that one who advocates less government are risking the overwhelming violence of... anarchy...
I am not advocating no government or even less government. I am advocating that the government only function according to its original intended purpose - to uphold the rights of the citizenry; this is done through the use of force, when necessary, by the courts and the military/police. Whether such a move results in more or less government is of no concern. What the government has become instead is a rights-violating machine.
"The bottom line is that there are a huge number of possible chain reactions that can happen if a huge entity suddenly defaults on its debts. It can cause a lot of damage to the banking system."
That is why it is important for everyone at every level, who cares about their money, to know where it is going and how it is being used. Information is the key to stability. If you don't know enough to be sure that such a "hiccup" could not occur at your bank, you should take your money out of the bank and find somewhere else where you can be sure that they are not riding close to the tipping point.
"but not at the expense of a major financial meltdown"
If the entire market is so unstable as to be completely susceptible to such a "meltdown", then you should not take part in that market, find like-minded individuals also willing to avoid those risks, and only trade with them. Your mini-market will eventually expand enough that the rest of the market will want to place greater importance on getting good information, so that they can get your business. None of this requires force.
"The key is intervening in such a way as to avoid a chain reaction while still making sure that the people who made bad decisions are hurt badly enough that they're unlikely to repeat their mistakes."
And if everyone is making bad decisions, what do you do then?
The real question to ask is how the government can get away with forcing any person or company (bank or otherwise) to do with their property other than they wish.
Valid point, however as long as the government is subsidizing the production of ethanol, farmers now growing food and other crops will be more inclined to change to switchgrass. If it is truly the fuel that will save the world, remove government subsidization and let it stand on its own strengths.
In 200 years the descendants of Guantanamo Bay will play roles in a post-apocalyptic film about a guy whose wife and kid were run over by a motorcycle gang, and he's out for revenge in his tricked-out hotrod.
Slashdot Mirror
"Ask them to explain first, what the word "socialism" means"
According to a random dictionary, socialism "advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole."
"to explain how that applies to the situation they've brought up by using that word."
Replacing insurance, which is a privately-provided service that is involved in the generation and distribution of wealth, with a government-controlled service funded by the public income, is synonymous with the quoted definition of "socialism".
And because it is funded with money taken forcibly from members of the public, the right to property is being violated.
"Keeping people alive is the ultimate goal."
As anonymous coward has already shown in another reply, this is your opinion, and your argument only works so long as you assume this is true for everyone. If your goal is to keep people alive, that's fine, and feel free to donate to worthy causes, but don't force it down everyone's throats, telling people they are responsible for everyone else, and must give up their rights to support that responsibility.
"Would you be kind enough to explain how compulsory (but not necessarily universal) healthcare implies losing property rights?"
Correction: it does not imply losing those rights, but having them violated. I work, and as a reward my productivity is converted into money that can be exchanged for others' productivity. I freely agreed to work for a given compensation to be paid by my employer. I exchange my productivity for property. To take away my property by force, against my will, is an unjustifiable, immoral violation of my right to my property (i.e. the right to the "sweat of my own brow" if you're a fan of Bioshock).
"publicly funded healthcare == socialism."
Well, going by a dictionary definition, socialism "advocates the vesting of the ownership and control of the means of production and distribution, of capital, land, etc., in the community as a whole", which is commonly seen as "the government controls a service involved in the trade of money or property". Are you suggesting that insurance companies are somehow a special case that does not fit the definition of a "service", which when controlled by the government, would imply socialism? If so, how does it not fit that definition?
"On the balance, I think that a well-run social program can lift society more than the distributed burden it engenders."
The key here is to answer the following question: why must such a safety net be provided by the government at the expense of violating everyone's rights? If you believe there should be safety nets, invest in a company that provides such a service. What is the justification for forcibly taking away a portion of everyone's productivity in order to fund such programs? Sure, it allows easy access to lots of money, but it is also no different from theft.
"so any "bailout" should have some kind of check"
But why must a bailout be provided by the government? If someone supports the cause of having safety nets for people, they can donate to a company that provides such a service. Why the need for mass rights violations?
"When I bought my house, there were easily several thousand pages of contracts. Either you have never bought a house, or you have an unrivaled tolerance for tedium."
If you don't like the complexity, hire a lawyer to go through it. Or tell them you won't buy unless they simplify the terms, and encourage other potential buyers to have the same attitude. If you're willing to sign without reading, then you assume that risk.
"How about uninformed people lied to by financial consultants?"
They can be compensated through the courts.
"Is that something that you would like to see ended?
Of course.
"What Obama is suggesting is having the state act like a big insurance company to which everyone is registered, while actual delivery of the service ("means of production") can and will remain in private hands."
Your argument only makes sense with your definition of socialism. If I take a dictionary definition, which includes "ownership and control of the means of production and distribution, of capital, land, etc.", then your whole argument vanishes, because insurance companies provide a service, and under your system, the government would do that service instead.
"the only difference is that the refund check for medical services is cut by the government rather than by an HMO"
But where does the government get the money from? That is the other difference. The money is taken by force, violating everyone's rights, rather than freely given by willing individuals.
"When a chronic illness or a single medical emergency strips away everything you own, what property rights do you have left?"
You're confusing property with property rights. To show what point, I'm not sure.
"We're accepting your suggestions."
... do not evolve into stable, self-regulating entities without external planning."
I've been making suggestions the whole time. The problem with the popularity of the suggestions is that they usually involve doing work yourself rather than having the government force everyone to change for your own benefit. What it comes down to is simple: many people are willing to disregard rights when it is convenient, but I am not.
"Respondant: Because we used to do X and it caused Y problem."
I have only seen you disregard X by assuming that there was some past problem with it. I haven't seen you actually state what the past problems were with it, nor how those problems justify violating rights. If that information was provided, we might make some progress in the discussion.
"I am suggesting that it started as an ineffective and simple system like the one you're proposing and it grew into the one we have today for a host of good reasons that you're not aware of."
I ask again, what are these reasons, and how do they justify violating people's rights? I have no doubt that the system started out simple, but I do doubt that it started as secure (ie, free of risk) as the one I suggested you try out (if you're worried about the risk of the current system).
"If your suggestion is to tear it down and start over"
That is not my suggestion, as it would likely violate people's rights. My suggestion is, if you fear the vulnerability of the market, don't take part in it, and instead work on creating a much safer alternative that people will be attracted to. Whether it succeeds or not is up to you, and I do not care either way, because its success is entirely proportional to your desire for security.
I have no doubt that in the current market people are actually acting out this proposal as the result of the recent situations, the problem is that the government is lessening the blow by saving those who made bad decisions and spread misinformation.
"They're dangerous in the sense that you pointed out: There's moral hazard involved."
Only if the funding for these safety nets is acquired through rights violations. If you feel there should be safety nets, donate some fraction of your income to a company serving that purpose, and persuade members of the public - your friends, family, neighbors - to do the same. What you shouldn't do is tell the government these things are so important that it justifies taking by force a fraction of everyone's property, in direct violation of a right the government has been charged with upholding.
"You could stuff your money in a mattress and avoid banking entirely, and you'd still more likely than not end up poor and hungry if the banking system collapses."
In the current system, yes, because I cannot choose not to be out of the system. I could minimize my risk by being self-sustaining on my own property, or by only trading with those who do the same.
"We can either address those problems collectively or ignore them, and historically, ignoring them has not been a good option."
My proposal for you, if you fear the risk of the system, is not to ignore the problems with the system, but to sidestep them and avoid them altogether. If you can get others to see the same risk, they will want to do the same, and the system will have that much more incentive to mend itself.
"But taxation is a violation of fundamental rights, right? So you're suggesting that we have courts and police that are paid for voluntarily?"
That would be the ideal situation, although I don't see getting there anytime soon, if ever. Working toward that goal is the only option, by reducing the functions of the government back to what they were supposed to be, and thus slowly reducing the number of rights violations.
"Banking systems
If by "external planning"
You're confusing animal rights with human rights. It is your natural right to do whatever you please so long as you don't violate the rights of others. Do what you want with yourself and your property, and do whatever you want with others and their property - as long as you get their permission first.
"You accepted this when you accepted the benefits of your society."
What is the reasoning behind this claim?
"Immunization from diseases killing you at age 1, a decent education, roads / electricity / clean water.
These things can all be provided by private industry without rights violations, and competition would work to lower costs while giving customers more of what they want.
"You are basically taking your ball and going home while keeping every benefit that society has given you for your own success.
No, I am getting involved in discussions to persuade the public away from the constant rights violations, with the hopes of eventually leading to the nomination and election of candidates that uphold rights.
"Most people would call that 'selfish'."
As would I. Now you have to show why that is a bad word.
"In your model we would be living in caves."
A pithy, frightening claim backed up by no rationale or evidence should always be disregarded no matter how pithy or frightening.
"The real real question to ask is how PayPal can get away with forcing any person or company (bank or otherwise) to do with their property other than they wish."
If you don't like Paypal's terms, don't agree to them. It's that simple.
Being that we are humans, I thought it was clear what I meant. Life, liberty, pursuit of happiness. These are rights that we all have as rational beings, and it is immoral for one person to use their liberty to violate the rights of another.
"I can't go outside at night."
You're talking about preemptively protecting yourself from rights violations with further rights violations.
"If we want to change the city, we require collective action."
Yes, you talk to members of the community and they gather to form a neighborhood watch to help preemptively prevent rights violations without violating other rights. If someone harms you, they can be brought to justice.
"If an epidemic spreads through the city..."
That is an emergency situation and has no bearings on determining how a normal (non-emergency) community should function. Obviously in an emergency the government would have to step in to stop widespread destruction and rights violations.
"Libertarianism is dogs eating dogs."
Who is advocating Libertarianism? The Libertarian Party is an unprincipled collection of people wanting laws changed for widely-varying and often contradictory goals. Despite their firm stance on drug legalization and "liberty", they nominated for presidential candidate the person who introduced the Defense of Marriage Act to Congress in 1996, and who has a long history of drug prohibition work for the DOJ and Congress.
"Or can you pay the $500,000 up front?"
Why would someone charge $500,000 if such a situation occurred? Nobody would buy and they would be stuck with the property. They would obviously have to reduce the asking price to reflect the market........
"(e.g. the natural right to kill someone and take their stuff)"
There is no such right. Read up on Wikipedia as well, if you'd like.
I'm perfectly happy giving up my right to take someone's stuff"
You don't have such a right. See above.
"This isn't a question of information. The reality is that nobody knows the future and that fluctuations in market values will happen."
Those fluctuations are caused by changes in information. Nobody need know the future, only the past and present, to whatever degree they are comfortable with.
"one of the end consequences is that the money you deposit is hard to keep track of."
But it need not be that way and the whole point of this discussion is to help bring about a different situation.
"It's not a question of whether it happens at "your bank" or not...."
Let me correct my wording: "If you don't know enough to be sure that such a "hiccup" could not affect your bank, you should take your money out of the bank and find somewhere else where you can be sure that they are not riding close to the tipping point."
"What you just described is creating a new banking system and letting it evolve into whatever the market would have it evolve into.
Indeed.
"That's how we got our current banking system, and it's a pretty darned good system."
That doesn't mean we can't do better. The current system will not improve as long as people keep getting safety nets for bad decisions they make.
"You'll run into the same problems people ran into over the centuries of banking, and generations from now, you'll probably end up right about where we are here."
I'm not proposing a new system. I'm saying that if you think the current system is subject to immense danger, take your money out of the system and only trade with people who agree to also stay out of the system; only then will you be able to avoid the risk. Do that, rather than violate everyone's rights with government regulation - forcing everyone else to change, rather than changing yourself.
"The short answer is that anarchy doesn't work..."
Who is suggesting anarchy? Someone needs to uphold and defend our rights, and that is what the government (through the courts and military/police) is charged with doing.
"We could take the principled path and allow a worldwide meltdown of the financial system that makes the Great Depression look like the late 1990s, creates armies of homeless, and kills a bunch of people."
You're attempting to show a direct causal relationship between a single action (or inaction in this case) and massive amounts of rights violations, by ignoring the actions and choices of millions of individuals inbetween.
Back to reality. People accept risk when they buy into a financial system, exchanging their productivity for a dollar amount with the hopes of getting a higher dollar amount from others' productivity. If the system fails, they can choose what to do from there. Some choose to continue working to be productive. Others may choose immoral actions that violate people's rights (theft, murder, etc). Those who choose to violate rights should be brought to justice.
"Alternately, we could work together to try to solve the problem by any means necessary."
I can agree with this, as long as these means do not involve rights violations.
And you did not answer the two conditional questions I posed immediately after that sentence you quoted.
Also, my purpose here is not to simply say "I don't like it" and leave, but to get discussion going that can eventually lead to candidates being elected who would rather uphold rights than violate them, eventually overturning the laws that do violate our rights.
That sucks for the sub designers that the only thing they have left to build their subs out of is steel and other non-toxic metals. The Chinese need to stop worrying about toys and start putting their lead where it is needed most.
"One of the principles of the social contract that one becomes a part of in a theoretically democratic society..."
... anarchy...
When did I sign this contract? When I was born? Am I agreeing to this contract every second (since birth) that I do not quit my job, take all of my property on a plane, and spend my life savings moving to another country? Is that how the contract works in a "democratic society"? If so, where is this explanation written down, and how does it justify the violation of everyone's natural rights as rational beings?
"Your argument cuts both ways, one could as easily say that one who advocates less government are risking the overwhelming violence of
I am not advocating no government or even less government. I am advocating that the government only function according to its original intended purpose - to uphold the rights of the citizenry; this is done through the use of force, when necessary, by the courts and the military/police. Whether such a move results in more or less government is of no concern. What the government has become instead is a rights-violating machine.
"The bottom line is that there are a huge number of possible chain reactions that can happen if a huge entity suddenly defaults on its debts. It can cause a lot of damage to the banking system."
That is why it is important for everyone at every level, who cares about their money, to know where it is going and how it is being used. Information is the key to stability. If you don't know enough to be sure that such a "hiccup" could not occur at your bank, you should take your money out of the bank and find somewhere else where you can be sure that they are not riding close to the tipping point.
"but not at the expense of a major financial meltdown"
If the entire market is so unstable as to be completely susceptible to such a "meltdown", then you should not take part in that market, find like-minded individuals also willing to avoid those risks, and only trade with them. Your mini-market will eventually expand enough that the rest of the market will want to place greater importance on getting good information, so that they can get your business. None of this requires force.
"The key is intervening in such a way as to avoid a chain reaction while still making sure that the people who made bad decisions are hurt badly enough that they're unlikely to repeat their mistakes."
And if everyone is making bad decisions, what do you do then?
The real question to ask is how the government can get away with forcing any person or company (bank or otherwise) to do with their property other than they wish.
Valid point, however as long as the government is subsidizing the production of ethanol, farmers now growing food and other crops will be more inclined to change to switchgrass. If it is truly the fuel that will save the world, remove government subsidization and let it stand on its own strengths.
In 200 years the descendants of Guantanamo Bay will play roles in a post-apocalyptic film about a guy whose wife and kid were run over by a motorcycle gang, and he's out for revenge in his tricked-out hotrod.
And by then he'll actually have a flying car.