Taleb on BP, the Iceland volcano, and other Black Swans: an interview by Christopher Leyden. The unexpected, the high impact, and the contrived narrative of explanation are aspects of the Black Swan. Fragility, and the fact that we're error prone are discussed. This is a extended explication of Taleb's ideas. My notes: The Net increases unpredictability. Too much debt. Unpredictability and debt are not friends. Government has transformed private debt into public debt. Governments can't go bankrupt. The government has bailed those who took the risks and placed the burden on our grandchildren. We are now more dependent on expert mistakes. Distrust of predictions. Debt is a spreading cancer. It's more than an issue of economic swings. I know Keynes well, and he understood uncertainty well. Keynes lived in a different environment. What worked in the Great Depression won't work so well now. We need to clean up the system now. Instead, we just Paul Krugman doesn't understand extreme events; his models don't work into the world today. If Krugman is wrong, the costs are monstrous. Given predictions have been wrong in the past, why would we trust them now. The stimulus packages are bets. Unfortunately, we've run chronic deficits, so we don't have the cushion to risk stimulus. We can get into a Madoff-like Ponzi scheme.
Black Swans can be very consequential. 5-20 novels make up the bulk of sales of novels in English. Black Swans involves surprise. Someone is a turkey. 2nd, after the fact you think that you've figured out what really happened. 20-20 hindsight.
Black Swans started with agricultural and the increasing complexity of society. Who saw the magnitude and effect of the Great War? The internet now takes things global, such as the universality of the Harry Potter phenomena. The internet causes scaling on a new level. Taleb's greatest fear is now on the natural level, not the economic level.
Networks should be more stable, but not if there is a dominant mode. Networks often increase vulnerability. The global economy is such a complex network, it's difficult to determine where trends come from or what effect they will have.
News makes us stupid. The media skews. Taleb prefers face-to-face contact. He doesn't spend too much time on the web because the net can take a life on its own. Taleb likes to meet people and speak with them.
Taleb likes history as it consists of facts and take emphasis away from theory. But history comes to us as a backwards narrative. It can also provide an overly deterministic view, that is was bound to happen the way it did. History lacks counter-factuals. This is learning too narrowly from history. History and newspapers tend to focus on the last cause, the anecdote, rather than the complex system. Aristotle realized the difference between causes. Learn the facts, avoid theoretical history. Newspapers offer theories and explanations, which we like, but which can deceive us.
We are now in an age of fragility. The island effect in biology: more species per area on an island. We no longer have the island effect of culture. Where will we hide from the next antibiotic resistant germs? The whole planet will be affected about that which travels by plane than by foot. We are more mollified by air conditioning, lack of hunger, and therefore weaker, more vulnerable. Leyden talks about the problem of monoculture in agriculture. For instance, Taleb found the same apple where ever he goes around the world. Example: the Irish dependent on potatoes.
So must we disconnect? Taleb likes city-states > nation-states. Nature is very connected, but nothing is too great in its system. Taleb doubts regulators because they hide weakness. Taleb says protect the small guy by not protecting the big guy.
Two lungs aren't "efficient", but they are redundant. But because of this, we're safer. We need this redundancy to counter-act fragility. The four quadrants involve two environments: Mediocrastan and Extremistan. In the former the Black Swan is inconsequential, in the latter, it's consequential. Then he measures exposure the Black Swan.