“Efficiency, in fact, can be hazardous to our well-being, and a strategic amount of inefficiency is crucial in keeping society healthy.”https://twitter.com/TheAtlantic/status/1255518102734987266 …
It is an interesting point that Adam Smith's invisible hand doesn't design for system-wide robustness. Curiously, this means that the US economy might have been more resistant to shocks back in the mid 20th century, when it was composed of a small number of oligopolies.
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This is correct. But if large, fragile, and poorly managed companies were allowed to fail instead of being bailed out, we could have a market that rewarded planning for potential disruption - and the economy would likely be much more robust.https://twitter.com/paulg/status/1255737338866675712 …
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Only if the executives are allowed to fail too. If the captain of industry and their officers know they are first into the lifeboats then these ships are going to keep crashing into icebergs.
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The local equilibrium responds to global forces.
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Socialism for the rich. Cool system. /sarc
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if the economy was in the hands of people trying to get the best deal on mortgages in 2008, the free market doesn't account for oligopolies acting in the worst interest of the economy
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isn't this largely due to bailouts capping long term downside but quarterly earnings rewarding short term upside?
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classic trading EV for variance
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