R.I.P. American and Global Prosperity, as Predicted in 2007

Nassim Taleb is a Lebanese genius who is skeptical of the
"too big to fail" mentality and believes most intellectual elites, including the chattering-class mainstream-media morons who prattle their praises and adore these elites, are full of what he calls "scholarly-sounding verbiage AKA (b......t)." Here's why you don't see him on CNBC or the cable nightly nitwittery:

Taleb wrote that most people ignore consequential rare events that he calls "Black Swans" because we are more comfortable seeing the world as something structured, ordinary, and comprehensible. Taleb calls this blindness "the Platonic fallacy" and argues that it leads to three distortions:

Narrative fallacy: creating a story post-hoc so that an event will seem to have an identifiable cause,
Ludic fallacy: believing that the unstructured randomness found in life resembles the structured randomness found in games. ...
Statistical regress fallacy: believing that the structure of probability can be delivered from a set of data

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He also believes that people are subject to the triplet of opacity, through which history is distilled even as current events are incomprehensible. The triplet of opacity consists of

an illusion of understanding of current events,
a retrospective distortion of historical events,
an overestimation of factual information, combined with an overvalue of the intellectual elite.

Taleb, an anti-Platonist, believes that universities are better at public relations and claiming credit than generating knowledge. Knowledge and technology are generated by what he calls "stochastic tinkering", rarely by top-down directed research.

The above is a summary of his writings in various areas. In 2007 he predicted the worldwide meltdown in The Black Swan:

Globalization creates interlocking fragility, while reducing volatility and giving the appearance of stability. In other words it creates devastating Black Swans. We have never lived before under the threat of a global collapse. Financial Institutions have been merging into a smaller number of very large banks. Almost all banks are interrelated. So the financial ecology is swelling into gigantic, incestuous, bureaucratic banks – when one fails, they all fall. The increased concentration among banks seems to have the effect of making financial crisis less likely, but when they happen they are more global in scale and hit us very hard. We have moved from a diversified ecology of small banks, with varied lending policies, to a more homogeneous framework of firms that all resemble one another. True, we now have fewer failures, but when they occur ....I shiver at the thought.

The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup. But not to worry: their large staff of scientists deem these events "unlikely".

Nessim appears to be much like CK Prahalad, recently deceased management guru who started with a Jesuit education and:

after completing his BSc in Physics from Loyola College in Madras. One day, after noticing that many temporary workers were using old or torn gloves (managers gave out new gloves according to seniority), Prahalad argued for distributing new gloves to the workers who handled the most dangerous stuff instead. It was more a common sense than path-breaking thought but Prahalad's manager was impressed and began mentoring him by bringing him business books. Later CK called

the Union Carbide experience a "major inflection point" in his life where he "learned about the extraordinary wisdom of ordinary people."

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Nessim Taleb also believes in the essential wisdom of what he calls "stochastic" and what I call "amateurish" tinkering. Remember an "amateur" does something for the love of it, not the esteem of his colleagues or end-of-the-rainbow profits. Prahalad ended up at my alma mater, the University of Michigan, where it is more often the flyover-country spirit of innovation rather than the quasi-marxist corruption of the two left coasts that motivates and inspires the inhabitants.