MNeagle
14th May 2010, 07:54 AM
WASHINGTON (MarketWatch) -- The experts are ruining the world.
The technocrats we've counted on to run the machines, institutions and systems of our advanced civilization have not only failed to protect us from disasters, they now admit that they don't have a clue as to why they failed.
In just the past few weeks, we've seen top experts confess that they don't know what they are doing.
Consider:
•Top securities regulators and the leaders of the exchanges confess to Congress that they don't know what caused the sudden drop in stock prices last Thursday, a market meltdown that destroyed about $1 trillion in wealth in a manner of minutes.
•Top company and government officials confess to Congress that they don't know what caused a massive oil leak in the Gulf of Mexico, nor do they know how to stop it.
•Top economic and financial leaders in Europe confess that their grand experiment in a common continental currency was designed to fail because it lacked any meaningful controls on national debts.
•"Fabulous Fab," a clever trader at Goldman Sachs, confesses that he didn't understand the implications of his own financial creations, the kind of paper that forced the global economy to its knees.
•Robert Rubin, the man who was once credited with saving the global economy, confesses that under his watch Citigroup grew too large and too complex to manage (but not too big to fail).
•Top executives from the world's largest car maker confess that they don't know why one of their best-selling vehicles sometimes accelerates out of control.
And for years, economic experts told us that housing prices would never fall, and if they did, the damage would be "contained."
The failure of these experts isn't an isolated event.
Their individual failure is a microcosm of the failures of the institutions that we've carefully built up in order to create a prosperous, fair and free society.
Capital markets enrich the few and impoverish the many. Governmental institutions are corrupted by money and entrenched interests. Schools teach us not to think, but to consume. The media stuff us full of empty entertainment and gossip. The food industry pumps us full of empty calories and chemicals. The courts aren't just and the churches aren't holy. The energy industry poisons our world. The health industry gives us care we cannot afford.
Our disasters are mostly man-made, but we deny responsibility for those disasters. Everywhere we turn, we hear the excuses: Who could have known? Everyone does it. It wasn't me.
It's no wonder that people are disillusioned and have lost their faith in governments, companies, unions, markets, political parties, the mainstream media, the organized church, the expertise of the people who are supposed to run the world.
In Greece, the people riot against the experts' solution. In America, the Tea Party waves their pitchforks, promising to take America back from the elites, which is just fancy-pants way of saying "experts."
Learning curve
Once upon a time, grandiose mistakes only spurred us on to greater efforts. When the Titanic sank, we turned to the few that created the problem -- the naval architects -- to figure out what went wrong to make sure it was never repeated. When the Challenger exploded, it was the experts -- the aeronautical engineers -- who fixed the problems and kept the shuttle flying.
Today, we don't trust the experts to make it right. The experts are willing to take the fame and fortune of success, but not the responsibility for failure. If the experts cannot really fix the problems instead of papering over them, what good are they?
These experts are the victims of their own success. In their hubris, they've created systems that are too big and complex to monitor or control. We thought the invisible hand would protect us; we put our faith in complexity itself. The machines and institutions designed to eliminate human error also eliminated human responsibility.
Capital markets are taken over by the fastest computers, computers so fast that humans can only watch helplessly as fortunes are snuffed out. Oil rigs can go deeper than ever before, so deep that even the best-planned safeguards fail. Complex frankensteinian financial instruments turn on their creators and destroy the innocents in the village below.
The 20th century taught us what happens when we combine state-of-the-art military technology with extreme nationalism and ideologies. Perhaps our generation will learn before it's too late what happens when we surrender ourselves to our machines and markets and collateralized debt obligations that are too big or too complex.
We need smarter or more honest experts, or we need them to build manageable systems.
It's not too late to regain control of our world, and we need the experts to do that. After all, when the plane hits a flock of geese and the engines go out, you'd still rather have Captain Sullenberger in the cockpit than Ron Paul.
Rex Nutting is Washington bureau chief of MarketWatch.
http://www.marketwatch.com/story/the-invisible-sledgehammer-2010-05-14?pagenumber=2
The technocrats we've counted on to run the machines, institutions and systems of our advanced civilization have not only failed to protect us from disasters, they now admit that they don't have a clue as to why they failed.
In just the past few weeks, we've seen top experts confess that they don't know what they are doing.
Consider:
•Top securities regulators and the leaders of the exchanges confess to Congress that they don't know what caused the sudden drop in stock prices last Thursday, a market meltdown that destroyed about $1 trillion in wealth in a manner of minutes.
•Top company and government officials confess to Congress that they don't know what caused a massive oil leak in the Gulf of Mexico, nor do they know how to stop it.
•Top economic and financial leaders in Europe confess that their grand experiment in a common continental currency was designed to fail because it lacked any meaningful controls on national debts.
•"Fabulous Fab," a clever trader at Goldman Sachs, confesses that he didn't understand the implications of his own financial creations, the kind of paper that forced the global economy to its knees.
•Robert Rubin, the man who was once credited with saving the global economy, confesses that under his watch Citigroup grew too large and too complex to manage (but not too big to fail).
•Top executives from the world's largest car maker confess that they don't know why one of their best-selling vehicles sometimes accelerates out of control.
And for years, economic experts told us that housing prices would never fall, and if they did, the damage would be "contained."
The failure of these experts isn't an isolated event.
Their individual failure is a microcosm of the failures of the institutions that we've carefully built up in order to create a prosperous, fair and free society.
Capital markets enrich the few and impoverish the many. Governmental institutions are corrupted by money and entrenched interests. Schools teach us not to think, but to consume. The media stuff us full of empty entertainment and gossip. The food industry pumps us full of empty calories and chemicals. The courts aren't just and the churches aren't holy. The energy industry poisons our world. The health industry gives us care we cannot afford.
Our disasters are mostly man-made, but we deny responsibility for those disasters. Everywhere we turn, we hear the excuses: Who could have known? Everyone does it. It wasn't me.
It's no wonder that people are disillusioned and have lost their faith in governments, companies, unions, markets, political parties, the mainstream media, the organized church, the expertise of the people who are supposed to run the world.
In Greece, the people riot against the experts' solution. In America, the Tea Party waves their pitchforks, promising to take America back from the elites, which is just fancy-pants way of saying "experts."
Learning curve
Once upon a time, grandiose mistakes only spurred us on to greater efforts. When the Titanic sank, we turned to the few that created the problem -- the naval architects -- to figure out what went wrong to make sure it was never repeated. When the Challenger exploded, it was the experts -- the aeronautical engineers -- who fixed the problems and kept the shuttle flying.
Today, we don't trust the experts to make it right. The experts are willing to take the fame and fortune of success, but not the responsibility for failure. If the experts cannot really fix the problems instead of papering over them, what good are they?
These experts are the victims of their own success. In their hubris, they've created systems that are too big and complex to monitor or control. We thought the invisible hand would protect us; we put our faith in complexity itself. The machines and institutions designed to eliminate human error also eliminated human responsibility.
Capital markets are taken over by the fastest computers, computers so fast that humans can only watch helplessly as fortunes are snuffed out. Oil rigs can go deeper than ever before, so deep that even the best-planned safeguards fail. Complex frankensteinian financial instruments turn on their creators and destroy the innocents in the village below.
The 20th century taught us what happens when we combine state-of-the-art military technology with extreme nationalism and ideologies. Perhaps our generation will learn before it's too late what happens when we surrender ourselves to our machines and markets and collateralized debt obligations that are too big or too complex.
We need smarter or more honest experts, or we need them to build manageable systems.
It's not too late to regain control of our world, and we need the experts to do that. After all, when the plane hits a flock of geese and the engines go out, you'd still rather have Captain Sullenberger in the cockpit than Ron Paul.
Rex Nutting is Washington bureau chief of MarketWatch.
http://www.marketwatch.com/story/the-invisible-sledgehammer-2010-05-14?pagenumber=2