Since Tim Geithner did not predict the economic crisis, Nassim Taleb has no interest in listening to him talk about it now. The author of The Black Swan, a book about risk and probability theory, told National Journal's Matthew Cooper that he did not listen to Geithner, who preceded him at the Washington Ideas Forum.
Taleb explained his simple metric for judging whose economic opinions are worth his time: "Did someone predict the crisis before it happened? ... If the answer is no, I don't want to hear what the person says. If the person saw the crisis coming, then I want to hear what they have to say."
Other unlucky economic figures who failed Taleb's test included writers Paul Krugman and Thomas Friedman.
"You have a million people on this planet who call themselves economists," Taleb said. "How many people understood the risks of the system [before the crisis]? ... Paul Krugman was not one of them."
Taleb took issue with Krugman's support of deficit spending. "This transformation of private debt, with all the moral hazard it entails, into public debt is, number one, from a risk standpoint, bad," he said. "And from an ethical standpoint, I find it immoral. The grandchildren should not bear the debts of the grandparents."
Taleb called Friedman's book The World is Flat "very bad for society," arguing that it did not adequately assess risk.
One person who did see the crash coming? Nassim Taleb. "In 2008, when the crisis happened, a lot of heads of state were interested in my message," Taleb said. "Including David Cameron."
Asked where the economy would be in 25 years, Taleb gave the vague response that "everything fragile will break." Oh, and that the Fed won't exist anymore. It will be replaced by something "I think more organic and that makes more sense."
Full video below
This article available online at: