Tuesday, November 25, 2008

Unintended, adverse, long-term consequences.

The efforts to prevent the market from disciplining excesses will have unintended, adverse, long-term consequences.

One legacy will be the existence of a large number of uncompetitive companies which will cause profit margins to fall for their more productive competitors.

Another consequence will be a long-term deflationary malaise, which will keep interest rates ridiculously low to the detriment of savers.

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