Over at NPR, George Mason professor Russ Roberts looks at why Goldman Sachs prospers as Bear Stearns and Lehman Brothers die, despite following more or less similar business practices. Key point:
[C]apitalism is a profit and loss system. The profits encourage risk-taking. The losses encourage prudence. If the taxpayer almost always eats the losses for the losers, you don’t have capitalism. You have crony capitalism.
The content deserves close study. So does the delivery; Russ is one of the clearest economics writers there is.
