http://www.project-syndicate.org/commentary/skidelsky9/English

Given your academic interest in economic sociology, even though I’m off topic here, this is probably the place (and time, in a thread winding down) to post this.

I have the impression generations have to learn things anew, about war, about class-conflict, about anti-intellectualism.

I harbor an optimism that this election, because of the complex involvement of economics and class and war, might be a turning point. This is now an election in which gut instincts about national security and foreign threats don’t cut it.  The economic crisis is riveting and personal, and forces people to observe that governance is complicated, that real knowledge is essential, that having good advisors is critical—and that the morons on television are useless at explaining what’s going on and we must demand better.

Maybe, hopefully, possibly. We need an end to anti-intellectualism, and perhaps the confluence of this economic crisis and this election frames a beginning.

How did the WHOOPS thing happen? As J Thomas says—Rules of the Game. Their AAA rating was based on a supposedly iron-clad “take-or pay” legal contract that municipalities had signed to buy power from a series of 5 nuclear power plants being built. Despite constant reports of cost overruns and the likely-hood that some would be canceled, the bond’s ratings were maintained with the “iron-clad” contract cited as the reason. And bond sales continued likewise, citing their AAA rating as a reason. Brokers who voiced fears that if the project went Tango Uniform those contracts would be broken no matter what the words on the paper said were told that: “theirs is not to reason why.” etc., i.e., KEEP SELLING! Naturally, the project failed, the municipalities went to court and won, and the value of the bonds went to zero—along with the value of thousands of retirement accounts worth of life’s savings—WHOOPS! A perfect example of the way life really works according to J Thomas.

It was the rules of the game.

The players mostly don’t get to make the rules. So the rules said, you could do this stuff that would cause trouble later and make a lot of money, or you could do safe things and make a little bit of money and then get fired because you didn’t make enough money.

A whole lot of people knew there was trouble coming. But this quarter you either made your money, or else you got out of the game. And if you got out of the game five years ago when it was clear the trouble was coming eventually, that was five years of bonuses etc you didn’t get.

Is it worse than our military guys who’ve known for 30+ years that MAD won’t work in the long run and we’re going to eventually have a global thermonuclear war?

What’s special about America is that even a large subset of the supposedly smart people are dangerously idiotic – see the crisis on Wall Street.

GIBSON: And you didn’t say to yourself, “Am I experienced enough? Am I ready? Do I know enough about international affairs? Do I—will I feel comfortable enough on the national stage to do this?”

PALIN: I didn’t hesitate, no.

GIBSON: Didn’t that take some hubris?

PALIN: I—I answered him yes because I have the confidence in that readiness and knowing that you can’t blink, you have to be wired in a way of being so committed to the mission, the mission that we’re on, reform of this country and victory in the war, you can’t blink.

http://www.nakedcapitalism.com/2008/09/new-imf-study-of-banking-crises.html