{"id":3044,"date":"2008-10-13T09:49:59","date_gmt":"2008-10-13T09:49:59","guid":{"rendered":"http:\/\/scienceblogs.com\/principles\/2008\/10\/13\/the-bright-side\/"},"modified":"2008-10-13T09:49:59","modified_gmt":"2008-10-13T09:49:59","slug":"the-bright-side","status":"publish","type":"post","link":"http:\/\/chadorzel.com\/principles\/2008\/10\/13\/the-bright-side\/","title":{"rendered":"The Bright Side"},"content":{"rendered":"

Throughout the unfolding financial meltdown, I keep finding myself thinking that there might be one small, positive effect to come out of this: namely, a much-needed dose of realism and humility for market advocates. Because, really, after reading this Steven Teles post<\/a>:<\/p>\n

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All through the financial crisis, governments have failed to act in a powerful, concerted way when markets were susceptible to a signal of a major shift in direction. The nature of market panics is that they don’t necessarily find their bottom when they reach some measures of the “fundamentals”–they reach their bottom when everyone thinks that everyone else believes the bottom has been hit. That is often when some set of governmental actors make what markets actors plausibly believe that other market actors will think is decisive action. In the absence of such a focusing event, things keep spiraling downward.<\/p>\n<\/blockquote>\n

If I never hear another goddamn libertoonian holding forth on the “wisdom of crowds” and the superiority of markets to governments in all things, it will be too God damn soon. The financial system is in free fall because a bunch of brain surgeons on Wall Street managed to convince themselves that they could get rich by making bad loans to people with no ability to pay them back, and that there was nothing that could possibly go wrong with this plan. And now that the scheme has failed in an entirely predictable manner, these same geniuses are going into a hysterical panic like a bad caricature of a 1950’s tv housewife, because the government isn’t acting decisively enough to bail them out.<\/p>\n

The next time some financial genius pipes up to tell me how we ought to run colleges more like businesses, it’s going to be very hard for me to keep from slapping him silly.<\/p>\n

Matthew Yglesias suggests another possible bright spot<\/a>, but I’d settle for a little quiet from the market maniacs.<\/p>\n","protected":false},"excerpt":{"rendered":"

Throughout the unfolding financial meltdown, I keep finding myself thinking that there might be one small, positive effect to come out of this: namely, a much-needed dose of realism and humility for market advocates. Because, really, after reading this Steven Teles post: All through the financial crisis, governments have failed to act in a powerful,… Continue reading The Bright Side<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"1","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28,75],"tags":[],"class_list":["post-3044","post","type-post","status-publish","format-standard","hentry","category-politics","category-society","entry"],"_links":{"self":[{"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/posts\/3044","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/comments?post=3044"}],"version-history":[{"count":0,"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/posts\/3044\/revisions"}],"wp:attachment":[{"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/media?parent=3044"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/categories?post=3044"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/chadorzel.com\/principles\/wp-json\/wp\/v2\/tags?post=3044"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}