–Whether or not it is true that most markets are mostly efficient most of the times, inefficient market are hardly the solution for weak regulation. That solution is to manage the resulting mess since markets and regulations fail to live up to the promises for them.
–In all the talk about the need for prudential risk regulation systemwide, few seem ready to face this challenge: The larger and more complex the system, the less the regulation of risk will be the focus of management.
Attention will unavoidably shift to the now greater surprises and unknown unknowns well outside frequency distributions or worst-case scenarios. Indeed, to equate system uncertainties and unknown-unknowns with systemic risk is the disaster to forestall rather than unintentionally hasten.
–If fireflies can do it, why can’t humans? If fireflies can self-organize and flash in unison, why can’t humans better regulate their own behavior?
Well then let’s carry that to its logical conclusion: If earthworms can do it, why can’t humans? If earthworms can move tons of soil, why can’t humans do the same in the name of economic development?
Self-regulation, as a wit put it, stands in relation to regulation the way self-importance stands to importance.
–George Bernard Shaw, in one of his polemics against the U.S. Constitution, counseled Americans to farm out the important stuff to Europeans: “Some years ago I suggested as a remedy that the American cities should be managed from Europe by committees of capable Europeans trained in municipal affairs in London, Berlin, Paris, etc. San Francisco rejected my advice and tried an earthquake instead. . .”
–I remember a tense meeting during the height of the California electricity crisis. Rumors were about as to whether some organizations would survive the upheaval. A senior executive at state grid transmission center told the group: “My view is that we are jumping under the table and the earthquake is happening and what we have to do is to hope this isn’t a nuclear attack and that the rubble will settle and when it does, we get up and be the only ones around who know what to do.”
–Policy and regulation look much more like the rubbished artist studios of Edgar Degas and Francis Bacon. It is a world in which clutter and worse can be used for wildly different ends depending on in whose way it has been sorted. Sigmund Freud and H. Rider Haggard were enthusiastic collectors of hundreds of carvings and antiquities to inspire their work. Freud at his improvising best gave one of his patients Haggard’s She to get her thinking, but she already had read it.
–My California Driver Handbook reads: “Remember, if a pedestrian makes eye contract with you, they are ready to cross the street. Yield to the pedestrian.” ARE THEY CRAZY? These days, the last thing a pedestrian wants to do have eye contact with on-coming drivers. “They’ll just speed up if you do that and head right for you!”
–I remember the speed-up to decolonization as one of the most significant developments and turning points in the last half of the previous century. Little did we know the now-‘then.’