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I had a small showing of the extraordinary Katrina documentary, Trouble the Water, at my apartment the other night. It reminded me that we’ve never bothered to trace all of the money that was supposed to go into rebuilding; and that the engineering flaws in the levees have simply been patched up and restored.
Noone has learned much of a lesson in the financial world either,
since the near-collapse of our financial system last year, and all of the old structures that allowed a dramatic failure to happen without warning are one more being strengthened. Somehow our nation’s financiers haven’t taken a hit to their reputation, since they and the betting parlors are still the only professions legally allowed to satisfy the gambler’s itch… yet the economists have, and many are in a funk rather than working hard to solve newly-discovered puzzles.
This is happening all over the world. It is instructive, for instance, to see Dubai‘s response to feeling the collapse of the small facet we call a real-estate bubble, since it is a year delayed from the crunch felt in the US in an economy built largely on real-estate. Everywhere, people who find themselves locally better off, even if none of the fundamental problems have been resolved, consider themselves “out of trouble”. You hear it in political rhetoric, in the reports of firms and sectors.
It’s a bit like being saved from a plague and instantly relaxing investment in preventive medical research… we should be better students of history than that.