Thursday, February 10, 2011
Via Tyler Cowen, see this post on bank CEOs absconding with shareholders' wealth. I have been pointing out this sort of thing in papers, blog posts, and comments for some time. Contra some Austrian theorists who think that the business cycle is characterized by "mistakes" followed by "regrets" on the part of entrepreneurs, what we see in these actual cycles is "theft" followed by "skedaddling." Of course, the marks have regrets later -- they were the marks after all. But there is just no need to account for "systematic errors" on the part of entrepreneurs.