Bertoldt Brecht, Mixed Social-Profit Models, And Repossessed Goats

Economics remains a "soft" science, but it is firming up nicely with improvements in data collection and processing. And there could be some astounding outcomes for economics in our future. For example, some thinkers like Edward O. Wilson see economics as the gate way to a unification of knowledge or what he calls consilience. Obviously, we will not see any formula for unity next week, but there are aspects of this line of thinking that affect us today. One of them involves the search for a golden mean between "doing good" and "doing well" in the world of finance. That is, how to provide financial services to a full spectrum of the world population while, at the same time, keeping the bank afloat. You may think this has no effect on your life, but you're sorely wrong. The "generosity" of housing bankers Freddie Mae and Fannie Mac to both customers and employees is the reason the value of your house dropped by a third in the last few years.

In the developing world, something called microfinance also struggles with doing good and doing well. For international banking, microfinance has raised a number of questions involving compatibility and worth. Do small loans to high risk borrowers in India improve society? Is this a world-wide subprime disaster in the making? Is it all a self-deception that gives the Manhattan investment banker a warm feeling as he views the city below from his penthouse balcony?

Read more about it here in a post at The Volokh Conspiracy.

Thanks to Instapundit for the link.