Nassim Taleb of “Black Swan” fame has a new book out entitled “Skin in the Game”. Below is an interview with John Solman of PBS ‘Making Sense’. In this he argues:
- a financial system works only if the people who are running it have a stake in the outcome.
- a society should be built around risk and reward – if you make good decisions you do well but if something goes wrong you are penalised.
- Currently profit is privatised and loss is socialised, where the taxpayer only has a downside and will never have the benefit of what’s going on.
- The financial system is at risk if people can make money transferring risk to others and aren’t penalised. Dangerous, unfair and immoral
- The Federal Reserve tried to cure debt with debt, transferring debt from one to the other, from the private to the public.
- The system loaded — laden with debt and with pseudo experts will collapse eventually.