This essay was inspired by a man named Nassim Nicholas Taleb, author of a very famous book, “The Black Swan”. This is not about the Natalie Portman movie, it is a very interesting book on where our financial experts went wrong leading up to the economic disasters in the last few decades. It is a bit mathematical, and certainly covers some philosophical points. It may be boring for some people, but for those who want to know how some things work, it is well worth the effort.
The term Black Swan comes from the fact that for centuries, nobody knew there was such a thing as a black swan. All swans in the known world were white. One day, people went to Australia and lo-and-behold, what did they find but black swans. No longer were all swans assumed to be white. The discovery of black swans was a totally unexpected event.
Nassim Nicholas Taleb took that idea, and describes the 9/11 terrorist attacks, hurricane Katrina, the US financial system disasters in the 1980’s, 1990’s, and the 2000’s as black swans. They were all big, life changing events, not predicted, and most people believe they should have been predictable if only we had connected the dots. That’s a black swan.
How do you make yourself ready for an unpredicted, really big, life-changing event? Think like a boxer. These guys work out extensively every day by doing calisthenics, getting punched on the body and the face, and by keeping to a training diet. When the big fight comes, their body is in condition, and they are ready for the big punches their opponent is certain to deal them.
Being able to handle all the little punches, adversities, and problems in everyday life is one way to be ready for the “Big One”. There are obviously many dimensions to this idea, and many are sound. Allergy shots are given everyday to inoculate the body from the really big shock of a heavy, Atlanta Georgia allergy season. Infants and toddlers should be allowed to crawl on floors, go to those pre-schools which are germ incubators, and to generally let their little bodies learn to cope with the little attacks of daily life so they can grow up prepared to handle the tough, and germ infested world.
Is there any connection with the economic world, i.e., government and other institutions?
Socialism, communism, and fascism try to insulate people from the economic travails of life, i.e., joblessness, bankruptcies, natural calamities, fraud, and greed. Instead of letting people learn to deal with joblessness and their own economic problems, the state tries to protect them. Inevitably, the government is going to screw up big time (lowering credit standards for home buyers), and a VERY BIG catastrophe will ensue. It is the big government-caused disaster that hurts people, not the little ones they have accustomed themselves to handle.
It is endemic to big government and big corporations that are “too big to fail” that really bad things will happen, on huge scales. If the government is limiting depositor risk in the banking system by bailing out big banks, all they are doing is transferring the bank’s risk of doing business to taxpayers. This should be considered criminal, it is certainly illogical, and in many cases, stupid.
We have heard all our lives, “Don’t sweat the small stuff.” I have extended it to, “Don’t let the little people get you down”. Now, the watchword is changing to, “Watch out for Big Brother”. He is here, he is malicious, and he is unrelenting. Look for more big problems, bank failures. crony-capitalism, and downright corruption in our government.
Corruption goes hand-in-hand with big government.