The lingering headline on the front pages this week is that JP Morgan Chase suffered a massive loss on a hedging strategy, costing them $2 billion. That’s no small mistake, and it’s an example of how bad decisions in the free market can cost big money. But just because mistakes have consequences doesn’t mean that the mighty hand of government needs to step in to save us from ourselves. However, that’s what some on the left are now calling for.

The news of this blunder hit last week when JP Morgan CEO Jamie Dimon revealed that the bank took a $2 billion loss over the past six weeks in a strategy intended to hedge against risks to the bank’s assets that could come from market volatility caused by the Euro crisis. On Sunday’s Meet the Press, Dimon admitted, “In hindsight, we took far too much risk. The strategy we had was badly vetted. It was badly monitored. It should never have happened.”

The company is certainly paying the price in losses, as are those responsible for the bad decision making. The Los Angeles Times reports that the bank’s stock fell 12% since it disclosed the loss last week, the executive who oversaw the department responsible for the loss retired on Monday, and JP Morgan’s reputation as an extremely well managed bank has been damaged.

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