Quote of the Day

"The source of the problem is really quite simple: Give smart people go-for-broke incentives and they will go for broke. Duh."

Alan S. Blinder, Professor of Economics, Princeton University

In my day job, I hob-nob with lots of financial types, including guys who invest and manage Other People's Money ("OPM"). Mr. Blinder has nailed it - when gains accrue to the gambler but losses are absorbed by others, it is rational to gamble like a drunken sailor, all day, every day. The Other People providing the Money have to step up and figure out a way to make the gamblers suffer the losses. That will do more to moderate booms and busts than all the regulations, past and future, that the government might dream up.