Sunday, September 21, 2008

Greed indeed

Steve Horwitz points us to Division of Labour for this fine passage:

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.

I have now heard the "greed" explanation too many times for comfort. Adam Smith and many thereafter have had some things to say about self-interest. At what point does this one of the seven deadly sins become toxic? When (as the quote mentions) a number of policies and regulations line up in a very bad formation.

Inept business people deserve bankruptcy. Those engaged in fraud deserve jail time. House of Representatives members who accept large checks from Fannie and Freddie while "supervising" them, at least deserve an end to the right to gerrymandered districts. Senators that accept such funds ought to be shamed into returning them. Lest they be seen as greedy.