| Here's a thinker for you... A doctor makes money only when we're sick... A cop needs crime to keep his job... A firefighter needs houses to go up in smoke... And a soldier, of course, needs war... Even my mechanic is in on it. He smiles when he hears that soft metallic rattle from deep within the engine. Who, then, is cheering for our best interests? Who wants us to succeed... to have the fancy car... the big-screen TV... and the vacation house we hardly ever visit? A burglar, of course. The better off we are, the better off he is. Perverted Incentives Before you go thinking this is some trope about the government and taxation, think again. A rich population would stuff a government's tax coffers... but it'd quickly kick that government to the curb. A well-off society doesn't need big social programs or easy-money handouts. No. This is about a different story... one that's making big headlines. I like to muse about the free market and what it looks like in a pure form. But it's only as good as the incentives we place behind it. Once we pervert the incentives, things go south. Crypto is a fine example. "It's the biggest scam... ever," I saw one angry commenter write recently. In a period like this one, it's not hard to see where the angst comes from. The failure of FTX shows just how perverted the whole mess has become. With so much bullishness in the sector and so few folks willing to ask the right questions, it was easy for things to get out of hand. Sam Bankman-Fried (infamously known simply as SBF), the founder of FTX, had every incentive to help his users bid up prices and keep hoards of money flowing in. The richer his customers got, the more he could leverage their savings. Once the scheme reached its pinnacle, FTX melted down on itself. It was wholly predictable. The incentives were all wrong. And the market fixed the mistake in the painful way it's oh so known for. It's a grand lesson for investors. It's critical that we always understand the other guy's incentives. | 
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