Tuesday, December 16, 2008

"Who Could Have Known?"

Arianna Huffington has a piece criticizing the "Who could have know" era. She says, for example, that Iraq, Fannie Mae, Citigroup, and Bernie Madoff were each
entirely predictable. And, indeed, [each] was predicted. But those who rang the alarm bells were aggressively ignored, which is why it's important that we not let those responsible get away with the "Who Could Have Known?" excuse.
Here is the comment I posted in reply.
It would be nice if it were that easy. Just be sensitive to all the risks. But it's not. Certainly there are some things that people should have been aware of. Bush and co. were particularly skilled at ignoring information they didn't like.

But we are all now aware of the black swan effect, the possibility that something unexpected will occur that will cause a disaster. One simply cannot be aware of all the possible black swans. That's true by definition. A black swan is something one has never before seen and therefore is something for which one cannot prepare explicitly and cannot be on the lookout for. The only way to prepare for black swans is to remain strong and healthy in a generic sense. That's the best one can do. If one is sufficiently strong, healthy, resilient, and creative in times of stress, one has a good change of being able to deal with black swans when the appear even though one cannot anticipate them all.

1 comment:

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