5 ms·

Unless you're an entrenched partisan, I think it's still a tad too early to call Obama's economic policies "disastrous" or "calamitous."

by compay 17y ago

cwan 17y ago
I'm pretty sure that Taleb isn't a partisan - having also been pretty critical of Bush/Republicans (though he did point out the Obama administration's spending is magnitudes larger than his predecessor(s)). In the lead up to the crisis, Taleb was one of maybe only a couple people who not only forecasted the crisis but bet right on how it might occur. He used similarly dire language and was laughed at by many of his detractors. For this reason alone he shouldn't be so quickly dismissed.
- nostrademons 17y ago
  "For this reason alone he shouldn't be so quickly dismissed." I'm not sure he'd agree with you. Taleb's books repeatedly stress the importance of survivorship bias. In any population, they'll be someone forecasting just about any conceivable event. No matter how unlikely events turn out to be, somebody is eventually going to be right, and then that person is lauded as a genius for having forecasted correctly. When really they've done no such thing; rather, people have just retrospectively picked out the person who happened to guess right. I think Taleb would say you shouldn't dismiss him because there's ample evidence throughout history that he's right, not because he happened to guess right this time. Whenever debt levels have risen to what they are now, it's resulted in economic instability and chaotic behavior. It's not just this century: you can find examples back to Roman times.
neilk 17y ago
I think Taleb's main complaint is that Obama has not changed the incentives for Wall Streeters to put the economy at risk. Instead, we've had a big and apparently permanent transfer of risk from private to public, exacerbating the situation. A Goldman Sachs executive just boasted that their business methods hadn't changed at all from before the crash. Think about that for a second.
- BrentRitterbeck 17y ago
  I hear this from people all the time. From a financial viewpoint, the markets exist to transfer capital from those that have it to those that need it. In addition to that, the markets exist to transfer risk from one party to another. People outside of finance need to realize that companies like Goldman, when they are speculating, serve a legitimate purpose. They provide a mass of liquidity that otherwise wouldn't be there. So, before you start thinking about changing the way things work, imagine what things would be like if you attempt to remove speculators from the market. If you tie Wall Street's hands too much, last year's freezing of the credit market would look like a nice summer day.
  - deleted 17y ago
    [deleted]
  - neilk 17y ago
    Your slippery slope looks pretty flat to me. Some regulation does not mean locking down the entire market. And anyway, Taleb is proposing complete liberation for speculators; the only thing is they can't do it and expect bailouts, and they can't get some quasi-official stamp that says "AAA", please invest widows' and orphans' money here. From a financial viewpoint, the markets exist to transfer capital from those that have it to those that need it. No, that's what communism was supposed to do. Under capitalism, we use the market to allocate capital efficiently, to its most productive use. Perverse incentives, like excessive bonuses or government bailouts without penalties, interfere with the efficient allocation of capital.
    - BrentRitterbeck 17y ago
      Your twist on the poor being the group that "needs" the money is a clever little play on words, but you, and everyone else here, knows exactly what I meant. Companies need money. Investors have money. As for some god-given right to bank accounts, I never said any such thing. It's not my fault, nor Wall Street's fault, that people aren't better prepared to understand finance. It's a dog eat dog world. If you want to keep hold of your money, learn how to invest for yourself, place it with a broker and accept that even they may lose money, or hide it in your bed. Those are your options. Under capitalism, we use the market to allocate capital efficiently, to its most productive use. You are not distilling finance enough. Your definition is a first-year economics definition. That's a definition from an idealized world. In the real world, companies exchange shares for cash. They invest that cash into the business to create value. Other instruments have their own purposes, but it's all about taking either money or risk and transferring it from one party to another based on needs.

Unless you're an entrenched partisan, I think it's still a tad too early to call Obama's economic policies "disastrous" or "calamitous."

by compay 17y ago

Unless you're an entrenched partisan, I think it's still a tad too early to call Obama's economic policies "disastrous" or "calamitous."

cwan 17y ago

I'm pretty sure that Taleb isn't a partisan - having also been pretty critical of Bush/Republicans (though he did point out the Obama administration's spending is magnitudes larger than his predecessor(s)). In the lead up to the crisis, Taleb was one of maybe only a couple people who not only forecasted the crisis but bet right on how it might occur. He used similarly dire language and was laughed at by many of his detractors. For this reason alone he shouldn't be so quickly dismissed.

nostrademons 17y ago
"For this reason alone he shouldn't be so quickly dismissed." I'm not sure he'd agree with you. Taleb's books repeatedly stress the importance of survivorship bias. In any population, they'll be someone forecasting just about any conceivable event. No matter how unlikely events turn out to be, somebody is eventually going to be right, and then that person is lauded as a genius for having forecasted correctly. When really they've done no such thing; rather, people have just retrospectively picked out the person who happened to guess right. I think Taleb would say you shouldn't dismiss him because there's ample evidence throughout history that he's right, not because he happened to guess right this time. Whenever debt levels have risen to what they are now, it's resulted in economic instability and chaotic behavior. It's not just this century: you can find examples back to Roman times.

neilk 17y ago

I think Taleb's main complaint is that Obama has not changed the incentives for Wall Streeters to put the economy at risk. Instead, we've had a big and apparently permanent transfer of risk from private to public, exacerbating the situation. A Goldman Sachs executive just boasted that their business methods hadn't changed at all from before the crash. Think about that for a second.

BrentRitterbeck 17y ago
I hear this from people all the time. From a financial viewpoint, the markets exist to transfer capital from those that have it to those that need it. In addition to that, the markets exist to transfer risk from one party to another. People outside of finance need to realize that companies like Goldman, when they are speculating, serve a legitimate purpose. They provide a mass of liquidity that otherwise wouldn't be there. So, before you start thinking about changing the way things work, imagine what things would be like if you attempt to remove speculators from the market. If you tie Wall Street's hands too much, last year's freezing of the credit market would look like a nice summer day.
- deleted 17y ago
  [deleted]
- neilk 17y ago
  Your slippery slope looks pretty flat to me. Some regulation does not mean locking down the entire market. And anyway, Taleb is proposing complete liberation for speculators; the only thing is they can't do it and expect bailouts, and they can't get some quasi-official stamp that says "AAA", please invest widows' and orphans' money here. From a financial viewpoint, the markets exist to transfer capital from those that have it to those that need it. No, that's what communism was supposed to do. Under capitalism, we use the market to allocate capital efficiently, to its most productive use. Perverse incentives, like excessive bonuses or government bailouts without penalties, interfere with the efficient allocation of capital.
  - BrentRitterbeck 17y ago
    Your twist on the poor being the group that "needs" the money is a clever little play on words, but you, and everyone else here, knows exactly what I meant. Companies need money. Investors have money. As for some god-given right to bank accounts, I never said any such thing. It's not my fault, nor Wall Street's fault, that people aren't better prepared to understand finance. It's a dog eat dog world. If you want to keep hold of your money, learn how to invest for yourself, place it with a broker and accept that even they may lose money, or hide it in your bed. Those are your options. Under capitalism, we use the market to allocate capital efficiently, to its most productive use. You are not distilling finance enough. Your definition is a first-year economics definition. That's a definition from an idealized world. In the real world, companies exchange shares for cash. They invest that cash into the business to create value. Other instruments have their own purposes, but it's all about taking either money or risk and transferring it from one party to another based on needs.