Peter Thiel: And, obviously, there were ways in which the incentives had gone completely haywire for both the lenders and borrowers to take ridiculous amounts of risk. On the other hand, I would worry that the reaction is that the US becomes like Japan, that it becomes a country in which people just invest in cash and T-bills and maybe five or ten year government bonds and are taught that the correct answer is just take zero risk. Zero risk works as a business model for Japan because it’s a high end manufacturing county. It does not work as a business model for the US. What the US does, the US has comparative advantage vis-à-vis other countries in the world is that it is the place in the world where people do new things. And so, if you get rid of the idea of the ability to take risk in the US, it’s much worse than getting rid of it in Japan. If you say that it’s no longer going to be permissible for people to take any type of risk in the US, then you basically have no business model for the US and the US will lose the global competition even more badly than it is currently losing.
Recorded: October 23, 2008