Saturday, February 25, 2012

The Subsidy Of Limited Liability

Vinay very interesting on the implicit subsidy that government gives to business in the form of limited liability.

1 comment:

John Powers said...

Vinay Gupta is asking fundamental questions.

The trouble with questions about stock markets is the informed answer too often is: "It's anyone's guess." So nobody seems really sure how much of the market is high frequency trading. But everyone seems to agree that a lot is. And yet news of stocks is never reported that way. The pretense is that stock holders are owners. What does it mean to own a stock for 11 seconds or 20 seconds?

Clearly there's a subsidy, but I'm not holding my breathe that might soon change. But asking the question itself rocks the boat of conventional wisdom about ownership.