Author Nassim Taleb and Nobel Laureate Daniel Kahneman discuss the intricacies of the financial crisis and its far-reaching influence.
Looking forward, they offer proposals to remedy the situation and prevent it from ever recurring.
John Brockman's career has encompassed the avant-garde art world, science, books, software, and the Internet. In the 1960s, he coined the word "Intermedia" and pioneered "Intermedia kinetic environments" in art, theatre, and commerce, while also consulting for clients, such as General Electric, Columbia Pictures, Scott Paper, The Pentagon, and the White House.
In 1973, he formed Brockman, Inc., the international literary and software agency specializing in serious nonfiction. He is the founder of the nonprofit Edge Foundation, Inc. and editor of Edge, the highly acclaimed website devoted to discussions of cutting edge science by many of the world's brilliant thinkers, the leaders of what he has termed "the third culture."
Daniel Kahneman pioneered the field of heuristics and biases with Amos Tversky. He won the 2002 Nobel Prize in Economics for his work on human decision-making.
Nassim Nicholas Taleb
Nassim Nicholas Taleb is an essayist, belletrist, and researcher.
Taleb is currently a researcher at London Business School. He the Dean’s Professor in the Sciences of Uncertainty University of Massachusetts at Amherst, Fellow in Mathematics in Finance, Adjunct Professor of Mathematics at the Courant Institute of Mathematical Sciences of New York University (since 1999), and research fellow, Wharton School Financial Institutions Center, and Chairman, Empirica LLC.
Taleb held senior trading positions with trading houses in New York and London and operated as a floor trader before founding Empirica LLC. His degrees include an MBA from the Wharton School and a Ph.D. from the University of Paris. He is the author of Dynamic Hedging, Fooled by Randomness, and The Black Swan.
Taleb is spot on, but what i find strange is his complete dicarding of his past, he assumes this morale ground, without accepting his past follies, he was an exponent ov VAR himself, should at least say that it can work, in the absence rare events.
Taleb specialized in natural science and Kahneman in psychology are almost better expert for financial crisis than third one - economist. For me only these three aspects (human,physical, and financial capital) can solve this complexity. I do not see synthesis. How will synergy emerge without better understanding of wrong allocation in resources, too much in physical, and to little in human capital.
It appears to me that Taleb is analyzing an event that already had happened, kind of crying over spilled milk. Anyone can make the "should have" kind of comments for after the fact events. Funny thing is that he did not make a thundering loud announcement of what may happened to the world before. To me he is using fancy terms to explain a more simpler situation. First, I believe the models that the Phd's that wall street hired years ago are valid only and if only the financial instituations use due deligence to manage their money which is to only loan money to folks/companies who are qualified for the loan and can truly able to pay back, not just loan money to folks/companies who are just breathing which is what I saw a couple of years ago. These financial institutions are taking on excessive risk by themselves, not because of the models. The fact that the banks were loaning money without regard to the ability of folks/companies to pay back was what prevented me from investing more into real estate a few years back. The models that these smart guys put together I believe will put more financial resources into the world market and push everyone to a higher standard of living. It will allow the underdeveloped countries to have the option to have an easier method to draw the resources available to develop their country. Interesting point from Taleb but the bottom line is that I do not agree with his after the fact analysis.
Our economic power dive looks hopeless if we stay the course. Read Web of Debt (2008) by Ellen Hodgson Brown for insights into the money supply/banking fraud that has bankrupted the US and other economies around the world. We must nationalize the Federal Reserve Banks (private), begin to print our own debt free money (not Federal Reserve Notes loaned from the Federal Reserve System), require 100% reserve banking, recapitalized by United States Notes). Business cycles are manipulated by the Federal Reserve through interest rate, reserve and money supply manipulation. We could have a stable economy if we get the private banking system out of the control of our money supply. Similar discussions in the documentaries viewable on-line at www.themoneymasters.com .
Taleb is quite correct about how utterly anti-intellectual business programs are (other than schmoozing venues). I must however defend the minority of economist (20%+ from left & right) who have been fighting the very idiocies of neoclassical economics for several decades explicitly. We are considered 2nd rate, don't get good positions, & are nor even admitted into the "clubs."
Most of the points made here are intimately known to those of us who attend alternative/heterodox conferences & read each others' work. Bringing the philosophy & rhetoric of economics to the public's attention is a very important thing indeed & I applaud Taleb for his efforts.