Sunday, 11 December 2016

We Have A Problem......

After the occasional ups and many downs of the last couple of decades or so there is a great deal of interest in risk and how to avoid it so that economies and finance can run smoothly.

The trouble, it is alleged, is politics, sharp intake of breath.

This article in Naked Capitalism by Lambert Strether seeks to deal with the problem, or at least explain it. In discussing The Limits he says,


 Whatever independence is claimed, in practice the financial authorities are authorised by, controlled by, and gain their legitimacy from the political leadership.

Not surprisingly, the mandate from political leadership is to look at financial and economic risk, not to look at risk that has been created by politicians themselves.

This makes it hard for the financial authorities to incorporate political risk as a determinant of systemic risk, despite its importance.


We are all doomed.

1 comment:

  1. I like this comment from your link.

    The take home for me, is that there is no technocratic fix to societies problems. We all need to engage in honest politics.

    Indeed. I'll just take a look out of the window for airborne pigs.