Friday, September 19, 2008
Will the finance industry repeat the same mistake in the future? No, they won't make the exact same mistake again, but they are creative and will find new ways to make it. That is the foundation of the finance industry; it isn't very profitable without them in the short term, or very profitable with them in the long term. It is called separating fools from their money. The public good of finance is the allocation of capital to where it is best used. The private good is that it does better out of the hands of fools. Unfortunately, taxpayers are often left as the greatest fool.