Anyone read The Black Swan yet? I liked his earlier book Fooled By Randomness. I skimmed the Black Swan at the bookstore and liked it as well but was too cheap to part with the $20 :-) Here is an earlier post, linking to a nice podcast interview in which he discusses prediction and the dismal track record of certain prognosticators.
Taleb: "There are a lot of disciplines -- economics, political science -- where the expert is no expert. ... They don't have more predictive power than cab drivers ... do not take the experts seriously in these areas..." (He says this both on the podcast and on Charlie, but I quote from the latter. He's exaggerating -- remember his market perspective -- but not entirely wrong :-)
By the way, the current seizing up of the credit markets is not a black swan event -- a lot of people predicted it a long time ago!
"There are a lot of disciplines -- economics, political science -- where the expert is no expert. ... They don't have more predictive power than cab drivers ... do not take the experts seriously in these areas..."
ReplyDeleteAnd yet, time after time, economists are trotted out by their masters and sometimes even trot out on their own four legs so they can defend policies that bolster the position of the wealthy and powerful.
One would think intelligent men and women would understand that these economists are making pronouncments not about the real world we all live in but about simplified fantasy worlds created to (a) promote certain interests and (b) be mathematically tractable. But I suppose all the esoteric verbiage economists spew (not to mention the math!) is enough to frighten and/or confuse many into silence.
A lot of people also "predicted" that there will be NO credit crunch. The problem is whom would you trust back then? There are a lot of opinions and predictions at any point in time, some of them happen to be true and you see all these "predictors" on the TV. That's what it's all about.
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