I thought we pretty explicitly bailed out most of the incumbents. A few were allowed to be sacrificed, but most of the risk wasn't realized, and instead rolled into new positions that diffused it across the economy. 2008's "correction" should have seen the end of most of our investment banks and auto manufacturers. Say what you want to about them (and I have no particular love for either), but Tesla and Bitcoin are ghosts of the timeline where those two sectors had to rebuild themselves from scratch. There should have been more, and Goldman Sachs and GM et al. should not currently exist.
> A few were allowed to be sacrificed, but most of the risk wasn't realized, and instead rolled into new positions that diffused it across the economy.
Yeah that's a more accurate framing, basically just saying that in '08 we put out the fire and rehabbed the old growth rather than seeding the fresh ground.
> Tesla and Bitcoin are ghosts of the timeline where those two sectors had to rebuild themselves from scratch
I disagree, I think they're artifacts of the rehab environment (the ZIRP policy sphere). I think in a world where we fully ate the loss of '08 and started in a new direction you might get Tesla, but definitely not TSLA, and the version we got is really (Tesla+TSLA) IMO. Bitcoin to me is even less of a break with the pre-08 world; blockchain is cool tech but Bitcoin looks very much "Financial Derivatives, Online". I think an honest correction to '08 would have been far more of a focus on "hard tech and value finance", rather than inventing new financial instruments even further distanced from the value-generation chain.
> Goldman Sachs and GM et al. should not currently exist.
