Nassim Taleb: ARRA Stimulus Leads to Total Canadian Domination
Too bad Nassim Nicholas Taleb delivered this speech in French to an audience in Canada. Americans should hear, in American, the Black Swan author's thesis that the Obama brain trust has made the recession worse. Playing to his audience, Taleb says the U.S. economy is so sick that Canada has become a better bet for international investors.
Taleb is a critic of the policy expert class, and he accuses the Nobel Prize bureaucracy of rewarding economists who misunderestimate risk. His book's title refers to a phenomenon in which, even in their worst-case projections, Natalie Portman and Mila Kunis failed to predict they would be in a ballet movie so arty they'd have to kiss to get people to buy tickets.
The Credit Unwind—and the resulting implosion of experts that should be starting, any, day, now—has provided Taleb indefinite dining out privileges at the handful of North American restaurants that are still in business. But apparently he insists on paying. Here are a few gems from Taleb's talk at the Salon Speakers series in Montreal, courtesy of Bloomberg's Frederic Tomesco:
Obama did exactly the opposite of what should have been done… He surrounded himself with people who exacerbated the problem. You have a person who has cancer and instead of removing the cancer, you give him tranquilizers. When you give tranquilizers to a cancer patient, they feel better but the cancer gets worse… [T]otal debt is higher than it was in 2008 and unemployment is worse.
Today there is a dependency on people who have never been able to forecast anything. What kind of system is insulated from forecasting errors? A system where debts are low and companies are allowed to die young when they are fragile. Companies always end up dying one day anyway.
The first thing to do if you want to solve the mortgage problem in the U.S. is to stop making these interest payments deductible. Has someone dared to talk about this in Washington? No, because the U.S. homebuilders' lobby is hyperactive and doesn't want people to talk about this.