I’m thinking that before too long, I need to pitch a book proposal titled something like The Future: What We Know, What We Can Never Know, and What We Refuse to Know. It would be about the centrality of prediction in, well, absolutely everything that sentient species do; a look at the way the boundary between what’s knowable and unknowable has changed over the centuries, and where it stands today; current efforts to forecast / predict the future; and why we do such a good job of either listening to the wrong people for Very Serious Advice, or repeating mistakes we just made.
Like this one:
The FT is reporting today that the new fiscal rules for the EU “include a commitment not to force private sector bondholders to take losses on any future eurozone bail-outs”. If this principle really does get enshrined into some new treaty, it will be one of the most fiscally insane derelictions of statesmanship the world has seen — but it certainly helps explain the short-term rally that we saw today in Italian government debt….
The impetus for this completely insane policy seems to have come from the ECB, which genuinely seems to believe that bailing in private-sector banks, in the Greece restructuring, was the “terrible mistake” which caused the current euro crisis. Talk about confusing cause and effect: it was Greece’s fiscal disaster which caused the restructuring and the necessary bail-in.
To understand just how stupid this is, all you need to do is go back and read Michael Lewis’s Ireland article. The fateful decision in Ireland was to take the insolvent banks and give them a blanket bailout, with the banks’ creditors all getting 100 cents on the euro. That only served to put a positively evil debt burden onto the Irish people, forcing a massive austerity program and causing untold billions of euros in foregone growth, while bailing out lenders who deserved no such thing.
Are we really going to repeat — on a much larger scale — the very same mistake that Ireland made? Does no one in Europe realize that this is the single worst thing they can do?
It’s becoming increasingly clear to me that accountability– the need to be responsible for one’s actions, and to make decisions in the shadow of consequences for the value of your choices– is one of the things that makes futures anything approaching necessary, and that the rise of “nobody could have predicted” rhetoric and the constant softening of elite decision-makers’ landings after bad choices strikes at the heart of the field.