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Yes you are correct, root cause != person to blame. But.... That is such a over simplification and ignores a lot, most, of the issues in the GFC. * Regulator

by worik 6y ago

Yes you are correct, root cause != person to blame. But.... That is such a over simplification and ignores a lot, most, of the issues in the GFC. * Regulatory capture * Illegal behaviour by trusted actors (chiefly banks) * Corrupt judges * Carelessness by trusted agencies e.g., credit rating agencies Long long list of the collection of failures in the international financial system in general and American civil society in particular.

roenxi 6y ago
Any issue can be made impossible to solve if enough details are highlighted. Deciding what to eat for breakfast is an impossible collection of nutrient requirements, bodily requirements, long and short term tradeoffs, economic problems and social expectations. Yet somehow we mostly manage. "Oh but it's complicated" is a completely standard line of misdirection that comes up very regularly when people are making repeated bad decisions. Even small children sometimes try it. It is very, very rarely true and particularly in totally synthetic systems like the monetary one. There is always a point of greatest leverage that could be changed and it makes sense to call that the root cause and try changing it. Now I'm totally open to the idea that I don't know what the point of greatest leverage is in the GFC. I haven't read the regulations and I wasn't in the room when the money was being handed out. But there were billions to trillions of dollars in fake wealth that turned out never to have existed. The fact that the banking industry skated through with the same people largely in charge suggests strongly that no serious attempt was made to figure out who exactly was screwing up.
- worik 6y ago
  "But there were billions to trillions of dollars in fake wealth that turned out never to have existed" That is not true. They were financial assets which only have the value that people put into them. They are underpinned by confidence. Confidence goes away, it takes value with it. "no serious attempt was made to figure out who exactly was screwing up" Exactly. Some very powerful people got very rich and it was in now bodies incentives to find anybody accountable. These are interesting and may help you understand: https://en.wikipedia.org/wiki/Minsky_moment https://en.wikipedia.org/wiki/Minsky_moment https://www.sonyclassics.com/insidejob/ https://www.sonyclassics.com/insidejob/

by worik 6y ago

roenxi 6y ago

Any issue can be made impossible to solve if enough details are highlighted. Deciding what to eat for breakfast is an impossible collection of nutrient requirements, bodily requirements, long and short term tradeoffs, economic problems and social expectations. Yet somehow we mostly manage. "Oh but it's complicated" is a completely standard line of misdirection that comes up very regularly when people are making repeated bad decisions. Even small children sometimes try it. It is very, very rarely true and particularly in totally synthetic systems like the monetary one. There is always a point of greatest leverage that could be changed and it makes sense to call that the root cause and try changing it. Now I'm totally open to the idea that I don't know what the point of greatest leverage is in the GFC. I haven't read the regulations and I wasn't in the room when the money was being handed out. But there were billions to trillions of dollars in fake wealth that turned out never to have existed. The fact that the banking industry skated through with the same people largely in charge suggests strongly that no serious attempt was made to figure out who exactly was screwing up.

worik 6y ago
"But there were billions to trillions of dollars in fake wealth that turned out never to have existed" That is not true. They were financial assets which only have the value that people put into them. They are underpinned by confidence. Confidence goes away, it takes value with it. "no serious attempt was made to figure out who exactly was screwing up" Exactly. Some very powerful people got very rich and it was in now bodies incentives to find anybody accountable. These are interesting and may help you understand: https://en.wikipedia.org/wiki/Minsky_moment https://en.wikipedia.org/wiki/Minsky_moment https://www.sonyclassics.com/insidejob/ https://www.sonyclassics.com/insidejob/