Sunday, September 14, 2008

Avoiding Crises

Last week the US government brought 50 percent of the US mortgage market under its wing by taking control of Fannie Mae and Freddie Mac.

In effect the US government is to spend billions of dollars on propping up the US real estate market and US financial firms which are tanking.

This is a colossal disaster which US tax payers will pay for for generations to come.

Could this have been foreseen, and if so, could something have been done to head of such a huge disaster?

Probably not.

Too many people were earning too much money from the profligacy and many /very/ smart people were backing them up saying that their business models were mathematically water tight. It reminds me of the emperor's new clothes story.

Hiroshima was another case. Air forces flattened many cities before Hiroshima, thing was it was only sometime after Hiroshima that people fully realised that the whole earth could be wiped out by a handful of these nuclear bombs.

Could 9/11 have been stopped due to some far sighted official looking for more stringent passenger checks on airlines, and foreseeing the possibility of a "plane bomb" scenario?

Many people did actually foresee such crises, but groups of people are slow to change, more often than not reacting after the horse has bolted.

Pearl Harbour, Hiroshima, krismon, 9/11, Hurricane Katrina; all completely preventable and yet pretty much inevitable due to people's mindsets.

The next 9/11 or krismon will also be preventable but it will be almost certainly something very different from what went before, and will slip through the cracks, nothing will be done until it's too late.

We learn history so we do not make the same mistakes made in the past, however often it is learnt too well.

No comments: