This is a linkpost for https://putanumonit.com/2018/12/14/defense-of-finance/
I'm sharing the link instead of a full cross-post because this essay has:
- 5,300 words
- 2 footnotes, with links that actually work
- 1 GIF, 2 charts, 5 expanding brains
- 30+ lively comments
This is a "much more than you wanted to know" type post on the financial industry:
- Why everyone hates it, except for people in positions of power.
- The value of finance in coordinating trade across space and time, told via the parable of Banksy and the corn cobs.
- Are mortgage-backed securities a scam or a brilliant innovation?
- The stupid arguments about bailouts, and the smarter arguments for/against bailouts.
- Economists writing books about bank equity ratios without googling what those equity ratios actually are.
- What is up with equity ratios? Is making banks hold 50% capital the solution to financial crises?
- What banking regulations actually make banks do.
- The inextricable romance between finance and government.
- A final request for incrementalism and humility.