Did Wall St. Bonuses Cause the Financial Crisis?
An affirmative answer to those questions is the underlying thesis of Nassim Taleb's op-ed in the New York Times today. Taleb, the financier famous for authoring "The Black Swan," proposes ending bonuses for all systemically important financial institutions: the Wall Street banks, some insurance companies, the biggest hedge funds.
Taleb is probably one of the smartest people I've ever encountered.
I've learned more from Taleb and his books than almost any other living thinker. Most people misunderstand the lessons of The Black Swan which is a great frustration to him. He wrote a book that tried to explain that we need to make ourselves less vulnerable to unpredictable shocks -- and people instead went around trying to predict the next shock to the system. They missed the point about unpredictability, about the limits of our knowledge of future events, altogether.
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