All finance is great when debtors have a good plan… Force-feeding debtors is worse than feeding geese for foie gras
Sir, Martin Wolf writes: “Houston, we have a problem. We have a great deal of evidence that too much finance damages economic stability and growth, distorts the distribution of income, undermines confidence in the market economy, corrupts politics and leads to an explosive and, in all probability, ineffective rise in regulation. This ought to worry everybody.” “Why finance is too much of a good thing” May 27.
When I was an Executive Director in the World Bank 2002-2004 there were a lot of discussions about “debt sustainability”. I hated it… because it all sounded like a torturer calculating how much pain you could inflict before your tortured fainted.
I even left a blog titled http://unsustainabledebtsustainability.blogspot.com hanging around there out on the web.
Debt is great; there never is enough of it, as longs as you know what to do with it, and you truly believe you can repay it.
All other financing, forced down the throat of debtors…odious credit, is much worse than feeding geese to produce foie gras... something that at least has a purpose.
It all comes down to the same problem, we are in hands of regulators who want to regulate more than what they want to know what they are regulating for. And it’s our own fault, more Martin Wolf’s than mine, for not calling their bluff.
PS. I have also alerted Houston:
@PerKurowski
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