Outrage!

If you have ever known someone who guessed drastically wrong about their desire to spend the rest of their life with their spouse, you know that when excessive optimisim crashes, it usually overshoots on the downside. And financial institutions, which are the collective repository of all of our guesses about the future, are often the locus of the economic equivalent of a nasty, nasty divorce. We are currently enduring the Alec Baldwin and Kim Basinger of economic corrections.

via Ask the editors: What difference does it make to the recession if Citibank and Bank of America fail? – Megan McArdle.

I have some observations:

  • Everybody has an opinion about the financial crisis and the bailouts. The opinions frequently use the word “outrage”. I have a suggestion: the next politician who uses the word “outrage” should be tied in a bag and dropped in the Potomac.
  • Most of the opinions are uninformed. Politicians and the chattering classes are chattering away. You’d be better served by listening to some primitive tribesmen from the headwaters of the Amazon.
  • Even those with informed opinions don’t agree. They have different philosophies and different understandings of economics and finance. Some use statistics, some use logic. In my book, logic trumps statistics every day of the week.

On the one hand, I resent politicians using people’s misery for their political advantage. On the other hand, human nature hasn’t changed, so it doesn’t pay to have great expectations.

What doesn’t pay, and doesn’t play, is outrage.

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