Tuesday, February 22, 2011

BIG Prophets

Nassim Taleb told CNBC Friday:
"The problem I have is that Republicans love big business and Democrats love big government, and I hate both big business and big government."

Taleb was one of the few people who criticized the finance industry and warned about the financial crisis of 2007–2010.

Other successful prognisticators were Robert Shiller and Peter Schiff. You'd think that since both of these economists predicted the financial crisis, we should follow their advice on fixing the economy. Unfortunately, Shiller advocates Keynsian solutions while Schiff prescribes a libertarian/Austrian approach.

It strikes me that faith in an invisible hand of the marketplace is just as idealistic as faith in the balance of power between government regulation and industry. Talk to any devout capitalist or devout socialist and you'll find yourself talking to an idealist. Reality is a lot more complex and messy. Big government and big business depend on each other and are even interchangeable at the top. In other words, I think we're still in big trouble.

No comments: