Starting towards an understanding of the crisis

Our Epistemological Depression In analysing what he considers the two major intellectual fallacies responsible for today’s crisis, I think Jerry Muller actually repudiates our entire recent swing towards rationalism.  The last thirty years have been dominated by cost-benefit analyses of everything, from actions requiring them (hiring a new employee) to those where such a calculation is completely unwarranted (choosing a spouse).  The love affair with numbers is basically synonymous, I believe, with other fallacies such as rational expectations, efficient markets, and sociobiology.  We tend to this amority arise when new technology allows us to examine existing phenomena in greater detail than before, and we believe that, this time, we can understand the true nature of the object in question.  Of course, we are always wrong.  I can only hope that this article from Bloomberg News indicates a growing, sustained trend.

This New York Times article describing Larry Summers’ years before entering the Obama administration demonstrate the stranglehold the financial industry has had, and continues to, over our political system.  One of the smartest men in our country was bought by hedge funds and banks, and I have to believe that one does not leave that world the same person as upon entrance.  I do not doubt that Summers is an intelligent, well-meaning guy, but he is looking more and more like Hank Paulson and Robert Rubin than Christina Romer.  The article also reinforces the pertinence and rectitude of

Simon Johnson’s “The Quiet Coup” in the Atlantic Monthly.  I have often made the comparison of America to a developing country based on our decrepit infrastructure, extreme poverty, low levels of education, malnutrition, corrupt political system, and vacuous leaders.  Johnson’s article explains the confluence of the last two as it relates to our financial services industry.  Basically, a political and economic elite has shared the same social space and colluded in propagating a narrow ideology to conceal the steadily increasing wealth and power they allocate to themselves.  (America, Fuck Yeah!)  The scheme eventually collapses but has been designed to spare the well-being of its designers.  Injecting my voice, the courageous politicians are those who stand up to this leviathan; so far, no one truly has.