Wednesday, 24 September 2008

Economics and climate

Yeah Gwil, it is so weird the way people are not more worried. It's as if there was a giant asteroid on collision course with the Earth, and no-one was paying attention. Well, at least it did make the front page of the Indy the other day. But where are the people running around in the street screaming?

Check out the posts I've put on the Institute wiki, particularly the video by the psychologist Daniel Gilbert. It's quite entertaining to watch anyway.
Gilbert explains the psychology of what's going on, why we're sleep walking to disaster. I'm reading a book at the moment called "Kluge" by another psychologist. It explains how our brains are a kluge. We have so many biases it seems like we're almost completely irrational. I will write more on this. Some people are getting what's going on, like Tom Friedman, with his book "Hot, Flat and Crowded" - he says rightly that we are entering the "Energy-Climate" era, you can't look at energy and environmental and economic issues separately. I believe that people like Friedman are seeing the world as it really is, or at least they have more accurate mental models of the world than most people do. I've not seen anyone do more than hint to the connection between human psychology and the fact that most people have very inaccurate mental models of the world.

Back to economic meltdown. Check out this FT article
Warren Buffet is about the most savvy investor in history. He compared the recent market bailout as avoiding an economic "Pearl Harbour". Bear in mind that the bailout hasn't even been agreed by Congress yet, let alone proved to work. Pearl Harbour could still happen. Think about your own financial security. This is the state of our global financial system BEFORE the oil supply starts dropping. What the f is it going to be like when the physical amount of oil starts dropping?

1 comment:

Nookyalar said...

Decent panel discussion of the origins and implications of the Wall St meltdown. It lasts for 1 hour.