Limited liability

So now even The Australian is wondering whether some guy who ran a really bad property investment trust deserves to keep the enormous amounts of money and houses he made now that the trust is completely failing.

What limited liability means is that people take risks not in their own right but using a fake person called a corporation, so that when the corporation goes belly-up, the guys in suits still get to keep their big houses. There are exceptions to this principle but they are rare and only cover cases of criminal fraudulence or negligence, not bad luck or even incompetence.

At law school I was given to understand that without this form of protection, hardly anyone would bother to start a business of any scale at all. Admittedly my law school was full of Marxists but the guy who taught us corporate law was definitely not one of them. This is why when I hear pious talk about ‘moral hazard’ from economists and finance journalists I hold my nose.

Sorry I had to go into all that. Anyway, on Friday night Grace and I discovered Barack Obama’s Flickr account, so now I’ve friended the President-Elect, which to be honest felt a bit weird.

And there’s now an animated version of Get Your War On.

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