Showing posts with label Wall Street. Show all posts
Showing posts with label Wall Street. Show all posts

Saturday, August 20, 2011

Book Review: Willful Blindness


Willful Blindness: Why We Ignore the Obvious at Our Peril, by Margaret Heffernan; 2011, Walker & Company, New York.
According to the bio on her book jacket, Margaret Heffernan is a former producer for BBC radio and TV and has been CEO of several interactive media companies. She came across the term “willful blindness” in the transcript of the Enron trial, and it so interested her that she eventually wrote this book about it. The term “willful blindness” means “you are responsible if you could have known, and should have known, something that instead you strove not to see (p. 2).” It matters not whether this avoidance was conscious or not. As with so many books, the subtitle makes the point. This becomes a communication topic because none of us can reach an audience that will not listen.
Heffernan goes on to examine in detail ten important causes of willful blindness, with examples ranging from match.com’s use of affinity (like attracts like) to the role of fatigue in the disastrous explosion at BP’s Texas City oil refinery to the factor of being too sure of one’s ideas in the collapse of the world economy.  She makes interesting connections by means of these causes. For example, Alan Greenspan, the former chairman of the Federal Reserve, held onto the idea that “free, competitive markets are by far the unrivaled way to organize economies (quoted on p. 59)” long after the derivatives market endangered the economy in ways that he, of all observers, should have seen. He chose to hold onto what he already believed rather than see the facts in front of his face, a trait he shares with much of the world’s population, including some folks who believed that an alien space ship would save them from a world-ending flood back in 1954. Even after their entire prophecy proved false, most of them continued to believe, just as many American politicians continue to believe in “free, competitive markets” today.
Heffernan uses a chapter to examine each of the ten causes of willful blindness, and then gives us hope by including a chapter on people who do not blind themselves and one more chapter on ways to reduce one’s own blindness. Heffernan weaves her stories together very neatly around her themes, never losing track of the need to keep the reader involved. She uses a wide range of history and research to support her ideas, but this book reads far better than an academic paper. (Following up the endnotes is optional.) She gives a good bibliography and index, each of which increases the academic value and believability of Willful Blindness.
If you ever ask, “What was he thinking?” or “How could they not know?” read this book.

Tuesday, January 26, 2010

Bernanke: A new used car

Bernanke: Too big to fail

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This link goes to a CNN Money article pointing out that Wall Street will "punish" the country by dropping market values should Ben Bernanke not be appointed to a second term. It goes on to give a coherent history explaining exactly why he must not be re-appointed.

Bernanke captained the ship that sailed full speed ahead onto the rocks where it remains. He then played a leading part in rewarding the bankers who steered it there. The fact that Wall Street now has the power to punish the US government ought to be a message: these banks are too big not to fail. This country, or any other, cannot afford business interests big enough to overpower the government. Bernanke has ably represented the bankers against the interests of the United States. This must stop.

Specifically, Bernanke's central offense, as chairman of the Federal Reserve Board, has been to keep interest rates inappropriately low, leading to the credit bubble that collapsed and brought the entire economy down with it. Bernanke still insists that Federal policy did not cause the crash, thus clearly demonstrating that he has yet to learn from his mistake.

Bernanke's more current offense is the bailout. He did his best to pour over $700 billion into Wall Street, resulting primarily in obscene bonus payments to the bankers who are the agents of the disaster. Meanwhile, lending to small businesses, the best chance of reviving the economy, has dropped dramatically. Those specific decisions have been made by the people who are receiving bonuses for no reason that I can imagine.

Obviously, I disagree with the article's conclusion that Bernanke should be retained because he "has been at the helm for so long." The ship is on the rocks; the captain insists upon keeping it there. Get rid of him. Let's find somebody to patch up the holes and get afloat again.