Black Swans & Financial Risk

Here is a short interview of Nassim Nicholas Taleb at The Atlantic magazine. The source of the video is here:



I like some of what Nassim Nicholas Taleb says, but there is a lot I don't like. Yes, risk was behind the collapse. But his view that the Federal Reserve should be abolished and that Keynesian economics doesn't apply "this time" and that Paul Krugman has got things wrong are all things I disagree with him about. His love of the UK's new prime minister, David Cameron, is misplaced. I believe the austerity policies of Cameron will be a disaster. As Krugman has pointed out many times, the austerity approach is a "race to the bottom". The Republic of Ireland took the austerity approach early and its economy continues to collapse in a death spiral. Taleb's economics is just plain unhelpful. He doesn't appreciate the Keynesian economics is the only way to get out of the rut quickly and with minimal damage. Taleb focuses on the debt and worries that it is a burden for the grandchildren while ignoring the millions unemployed now and the children suffering because their parents have lost their home, don't have jobs, and can't feed them.