Debt

I am not all that averse to the expansion of credit, and acces to credit; I thought James Grant's Money of the Mind was somewhat over done and had really perverse distributional implications. Nonetheless, a culture that fosters debt over enterprise is not likely to provide expanded opportunities over the long term. So this column by David Brooks makes some valuable points (and, boy, was that hard to type). I would particularly pair this comment by Brooks:

"Wall Street has played a role. Bill Gates built a socially useful product to make his fortune. But what message do the compensation packages that hedge fund managers get send across the country?"

with this comment by Keynes:

"Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. The measure of success attained by Wall Street, regarded as an institution of which the proper social purpose is to direct new investment into the most profitable channels in terms of future yield, cannot be claimed as one of the outstanding triumphs of laissez-faire capitalism…."

And this'll be the second time I've quoted Keynes on speculation.

(Thanks to Kevin Drum for the pointer to Brooks.)