Friday, 19 January 2018

Carillion: for and against PPI

Mainly Macro (namely Simon Wren-Lewis) has written a good piece on the collapse of the large bulding firm (Carillion) that won contracts to build for the government. Not only are the points clear, telling, and fair; the writing is unusually free of the blemishes of hasty, late-night, blogging.

He fairly sees advantages as well as disadvantages in letting private firms compete for contracts. Competition holds down prices. But private firms seem to needs more supervision than they tend to get; supervision of quality and of management ethics. Furthermore, lending to private firms is riskier than lending to Government, and so interest rates are higher.


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