Nobel economist Ed Prescott says:
Don’t subsidize inefficiency. Cut tax rates to get people to work more. This financial stuff is much ado about nothing. I don’t see any reason for the taxpayers to bail out Goldman Sachs in a roundabout way. Let these businesses go bankrupt. They gambled, they lost. That’s part of life.Numerous economists agree with Prescott. See this, this, this, this and this.
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It's a popular sentiment and I agree within limits. The government should do what it can to see that the economy or the banking system do not collapse as a result of the gambling of executives. However, in doing so, it needs to make sure that executives, shareholders, other companies that invested in risky instruments lose their shirts.
ReplyDeleteIf a company or bank is too big to fail, it is too big. Take it over, break it up into manageable pieces, and sell it back to the private sector.
I second it!!
ReplyDeleteJust let me go out of existence ASAP
A Nobel prize does not confer expert status on anyone anymore. If anything, it makes people suspicious. Look at all the liars, crooks, and murderers who have received a Nobel prize over the years. Mostly from the Left, too, that should tell you something. Nobel carries the same fishy smell as Rhodes Scholar these days.
ReplyDelete