Re:The Fed’s imminent interest-rate decision – Is America re...
by SilasX on Friday December 11, 2015 @09:09PM
(#10721466)
One word: Arms-race.
If everyone has to signal what percentile of competence they are, and you offer cheap loans to people who provide a certain signal, then everyone will start having to buying the service that send that signal. People are collectively blowing a lot of resources to signal the same thing (and irrespective of how much they value having such a vacation).
If everyone has to signal what percentile of competence they are, and you offer cheap loans to people who provide a certain signal, then everyone will start having to buying the service that send that signal. People are collectively blowing a lot of resources to signal the same thing (and irrespective of how much they value having such a vacation).
Scott Alexander provides a great exposition of that dynamic in "Against Tulip Subsidies": http://slatestarcodex.com/2015/06/06/against-tulip-subsidies...