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Bankers and Fishermen

March 5, 2009

Rachel pointed me to Michael Lewis’ fascinating account of the great Icelandic meltdown in Vanity Fair. As always, Lewis draws an amusing and insightful picture. It’s a Fishermen’s Logic:

Fishermen, in other words, are a lot like American investment bankers. Their overconfidence leads them to impoverish not just themselves but also their fishing grounds. Simply limiting the number of fish caught won’t solve the problem; it will just heighten the competition for the fish and drive down profits. The goal isn’t to get fishermen to overspend on more nets or bigger boats. The goal is to catch the maximum number of fish with minimum effort. To attain it, you need government intervention.

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