10 Principles for a Survivable Economy

Nicholas Taleb is best known as the author of "The Black Swan". A black swan is a highly improbable event that can disrupt well laid plans, and send the future into a self destruct cycle. The current financial services crisis -- which Obama is making immeasurably worse -- is an example of what some persons consider a black swan. It is clear that our current political / economic hybrid system is not structured to deal with black swans. Taleb makes a few suggestions on how to improve it, and make it more flexible -- and more capable of surviving. (via SimoleonSense)

1. What is fragile should break early while it is still small.

2. No socialisation of losses and privatisation of gains.

3. People who were driving a school bus blindfolded (and crashed it) should never be given a new bus.

4 Bonuses do not accommodate the hidden risks of blow-ups. It is the asymmetry of the bonus system that got us here.

5. Counter-balance complexity with simplicity.

6. Do not give children sticks of dynamite, even if they come with a warning

7. Only Ponzi schemes should depend on confidence. Governments should never need to “restore confidence”.

8. Do not give an addict more drugs if he has withdrawal pains.

9. Citizens should not depend on financial assets or fallible “expert” advice for their retirement.

10. Make an omelette with the broken eggs. _FinancialTimes_via_SimoleonSense_and_More at ZenPundit.

The Obama-ites in the White House are not “socialists” ( at least not most of them) but there is a great love of liberal-minded technocracy there, and a seemingly boundless self-confidence in the ability of high-minded, upper-middle class, progressive, wonks and lawyers from the “good schools” (or investment houses - in some cases, both) to micromanage not just our lives for us, or even the United States of America but the global economy itself. Sort of a Superempowered Oligarchy of Good Feelings.

The ancient Greeks had a word for that: hubris. More importantly, the Obama-ites are wrong here - adding endless amounts of regulatory complexity is not going to give them the kind of granular control or positive returns that they seek to obtain from the system. Counterintuitively, they should be radically simplifying where and to the degree they safely can instead. _ZenPundit

Zen Pundit has clearly located one of the largest problems with the Obama administration: its precarious dependence upon an arthritic and politically correct Ivy League view of the world which has never had sound applicability -- particularly now. Greedy, corrupt wonks -- legends in their own minds -- have grabbed control of America's pocketbooks and its potent arsenal of technology and knowledge acquisition. Obama himself is even worse, much worse, than the unscrupulous wonks working for him. There is nothing that Obama would not trade away for another fix of adulation.