The virtues of the free market that I find work are heavily involved in diversity of thought, and as a mechanism that efficiently aggregates the people who need/want with the people who have/supply. There are of course naturally arising conditions that can hamper that, a lot of which have to do with another author, James Suroweiki (sp?) who did the book on crowd wisdom had to say on harnessing it and what causes it to fail. I think that in many cases market regulation is not as nuanced to individual situations as he's suggesting that are required, and that politicians are not naturally disposed to solutions which are not affirmatively and supremely confident in their particular solutions' success. I can't think of any politician that has ever uttered even the hint that a particular plan might fail unless it's the 'other guy's plan that's under scrutiny.
I also liked the point (naturally) that a lot of the regulatory spider web that still existed at the time of the collapse was in part responsible for the eventual extra levels of complexity that brought about the recession. There are layers of complexity which are just endemic to such a system as a large-scale economy, and then there is the complexity we sometimes add to it, in this case either the intra-corporate policy, or the extra-corporate regulation that can themselves aid in the self-destruction of whole companies or whole systems by the tendency to further couple elements of their respective systems. Independence is key.
What's irritating from my perspective is that we have 50 smaller laboratories (and countless more on the county governance level) to see what or will not work locally here for us in the U.S., but because the only other time in our country's history that state's rights were put into significant assertion was to support one of the few things it shouldn't and couldn't do (in terms of slavery) and therefore taints the term and the justification that it might be worthwhile to let the states actually handle a greater part of the load on several fronts. The push however, is not for that kind of decentralizing, decoupling of infrastructure. The regulations we have at the moment I see as increasing the coupling effect, and increasing the odds that the seemingly insignificant will become catastrophic.
There is little or no humility of the kind Harford is keen on in government or in corporate bodies to think that any such paradigm shift in thinking is likely to take hold. As he put it himself in his TED talk video which I link to quite often, we are besieged with "little Gods" both in public and private sector, and what's worse, is that being a 'little God' is exactly what most voters seem to expect out of their candidates, who are only too happy to oblige in taking on the role. I know it's common to say that corporate roles seem to attract the self-absorbed and the greedy, but the prideful are attracted to roles of prominence, both in the corporate and the public sphere. Hell, I know people in the local community who have let the smallest amount of authority granted go right to their head, for no other reason than they simply had the authority.
Greenspan wasn't necessarily libertarian in a few key ways. He was a monetarist, in favor of a master rate-setter in terms of trying to anticipate and set the bar for the interest rate preemptively rather than figuring out a way to harness the boots-on-the ground wisdom put forward by the aforementioned Suroweiki, who himself is not as far as I know libertarian, but aware of the folly that kind of top-down approach intends to accomplish. Some paradigm-shifting needs to be done in terms of the Fed as well, and what we come to expect from any such institution. I wouldn't mind seeing it replaced with a more diffuse system itself for what we seem to expect it to do. What that would look like I have no idea. I just know the bar that has to be realistically met in how it handles: Independence of diverse points of view (even ones who are 'clearly' wrong), decentralization, and a means to aggregate information.
I know I said I wasn't going to comment very much for the next few days, but you had a very polite and kind response, so I felt it deserved the best I could do.
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Date: 3/5/12 00:24 (UTC)I also liked the point (naturally) that a lot of the regulatory spider web that still existed at the time of the collapse was in part responsible for the eventual extra levels of complexity that brought about the recession. There are layers of complexity which are just endemic to such a system as a large-scale economy, and then there is the complexity we sometimes add to it, in this case either the intra-corporate policy, or the extra-corporate regulation that can themselves aid in the self-destruction of whole companies or whole systems by the tendency to further couple elements of their respective systems. Independence is key.
What's irritating from my perspective is that we have 50 smaller laboratories (and countless more on the county governance level) to see what or will not work locally here for us in the U.S., but because the only other time in our country's history that state's rights were put into significant assertion was to support one of the few things it shouldn't and couldn't do (in terms of slavery) and therefore taints the term and the justification that it might be worthwhile to let the states actually handle a greater part of the load on several fronts. The push however, is not for that kind of decentralizing, decoupling of infrastructure. The regulations we have at the moment I see as increasing the coupling effect, and increasing the odds that the seemingly insignificant will become catastrophic.
There is little or no humility of the kind Harford is keen on in government or in corporate bodies to think that any such paradigm shift in thinking is likely to take hold. As he put it himself in his TED talk video which I link to quite often, we are besieged with "little Gods" both in public and private sector, and what's worse, is that being a 'little God' is exactly what most voters seem to expect out of their candidates, who are only too happy to oblige in taking on the role. I know it's common to say that corporate roles seem to attract the self-absorbed and the greedy, but the prideful are attracted to roles of prominence, both in the corporate and the public sphere. Hell, I know people in the local community who have let the smallest amount of authority granted go right to their head, for no other reason than they simply had the authority.
Greenspan wasn't necessarily libertarian in a few key ways. He was a monetarist, in favor of a master rate-setter in terms of trying to anticipate and set the bar for the interest rate preemptively rather than figuring out a way to harness the boots-on-the ground wisdom put forward by the aforementioned Suroweiki, who himself is not as far as I know libertarian, but aware of the folly that kind of top-down approach intends to accomplish. Some paradigm-shifting needs to be done in terms of the Fed as well, and what we come to expect from any such institution. I wouldn't mind seeing it replaced with a more diffuse system itself for what we seem to expect it to do. What that would look like I have no idea. I just know the bar that has to be realistically met in how it handles: Independence of diverse points of view (even ones who are 'clearly' wrong), decentralization, and a means to aggregate information.
I know I said I wasn't going to comment very much for the next few days, but you had a very polite and kind response, so I felt it deserved the best I could do.