Saturday, September 20, 2008

Blame Greed, Blame Gravity

White, from the Division of Labour, wrote this incredibly lucid statement regarding all who believe that the current financial crisis is caused by greed:
On greed, let me repeat: If unusually many airplanes crash during a given week, do you blame gravity? No. Greed, like gravity, is a constant. It can’t explain why the number of crashes is higher than usual. And let me add: This isn’t a morality play. What we’re seeing are the consequences of monetary-policy distortions of interest rates and regulatory distortions of incentives, amplified in some degree by private imprudence, not the consequences of blackheartedness.

1 comment:

Max said...

I had this same thought many months ago. If you blame greed for why banks fail or gravity for why planes crash you wouldn't be wrong. But you wouldn't be getting to the heart of the matter.