Niall Ferguson had an excellent short column on the financial crisis in this past Sunday’s The New York Times Magazine (here). I liked the piece, especially where Ferguson punctures some of the conventional wisdom about regulation vs. de-regulation.
I appreciated Ferguson’s reminder that we have to be very careful when drawing conclusions, especially when the topic is emotionally fraught. These days of stress and strain seem to emphasize the cognitive biases most of us are prey to:
Human beings are as good at devising ex post facto explanations for big disasters as they are bad at anticipating those disasters. It is indeed impressive how rapidly the economists who failed to predict this crisis — or predicted the wrong crisis (a dollar crash) — have been able to produce such a satisfying story about its origins.