This article — Our Epistemological Depression — makes a lot of sense. It’s been my feeling all along that the bailouts and stimuli were frantic panic motions. No, make that emotions. I don’t see any evidence that any of the 535 members of Congress really have a clue what’s happened, much less why.
Barack Obama and his advisors and cabinet haven’t done or said anything much different. Should we call it Do Something Syndrome Even If It’s Wrong Syndrome? DSSEIIWS?
I think we’re screwed because our leadership does not know how to lead, merely that they must react, even if their reactions make the situation worse.
In Too Big To Fail? Or Too Big Not To Fail? I wrote:
What about that old saying warning one not to put all their eggs in one basket? Would heeding this have helped the “too big to fail guys” in fending off disaster?
Muller explains how this strategy, when carried to extremes had “…unintended and unanticipated negative consequences. The purported virtues mutated into vices.”
There was a belief in the financial sector that diversification of assets was a substitute for due diligence on each asset, so that if one bundled enough assets together, one didn’t have to know much about the assets themselves.