Information Landmine

"The Americans keep telling us how successful their system is. Then they remind us not to stray too far from our hotel at night." - An un-named EU trade representative quoted during international trade talks in Denver, Colorado, 1997.

Friday, April 10, 2009

Everyone's a super-hero...

One of the interesting things about the financial crisis is that it functions as a sort of economic Rorschach blot: everyone thinks that this proves that they were right all along, that everyone should now listen to them, and that we will all then be delivered to their particular version of the promised land.

So for example, democratic socialists think that this is an example of what happens if you have too much deregulation, and that now we'll regulate properly and get capitalism back on the leash, serving the public where it belongs. Libertarians take exactly the opposite view, and think that banks got too big and too risky because of too much government involvement, and if everyone would only listen to them, we'd have a free world of small-business-owning Rand-bots.

Nicholas Nassim Taleb has an opinion piece in the FT about how this proves everyone should have been reading his books, and that we should get rid of all those so-called experts:

The economics establishment (universities, regulators, central bankers, government officials, various organisations staffed with economists) lost its legitimacy with the failure of the system. It is irresponsible and foolish to put our trust in the ability of such experts to get us out of this mess. Instead, find the smart people whose hands are clean.
[By which I assume he means him.]

Similarly, Simon Johnson of the IMF thinks the problem is that America's bankers won't let the IMF have their way, whilst Dani Rodrik thinks that this is a vindication for the idea of moving away from big institutions like the IMF and letting national governments have more say over their own finances.

What with all these folks getting stuck in, I was thinking I'd have a go myself. Until recently I was actually working on a way to blame this all on Jade Goody. I was hazy on the details - something to do with the credit crunch being a result of our sense of entitlement to stuff we've done nothing obvious to deserve. Guess it's back to the drawing board...


Anonymous Anonymous said...

Great post Pete. Don`t know about the liberatarian take though... but may be you can explain it to me over a drink sometime. Rob

14 April, 2009 11:06  

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