One Comment

I don’t recall Prof. Bainbridge warning of the instability in the securitized mortgage business: Defaults were presumed to be independent with respects to regions, and they weren’t. Thus his analysis of Obama’s speech should be taken with a grain of salt.

I once tried to explain why Social security can not be privatized to a very intelligent woman programmer. She just couldn’t get it although it was simply that the reserves for such a system would equal or exceed our national wealth, a rather simple concept. For some reason financial matters are very difficult to most. President Clinton used to say things about the economy that were both conventional wisdom and foolish at the same time. The reason I am so fond of President Clinton is that he listened to actual experts and acted appropriately (NAFTA comes to mind.) We had good times even with the dot com bust.

All three of the contenders for President, including Senator Obama, also say things about the economy that are both conventional wisdom and foolish at the same time. To me Senator Obama is the brightest of the three. He is mystified that anybody would not see that OJ was proved guilty beyond all doubt, and he explained in 2002 why the attack on Iraq would be wrong. He would be able to understand his advisors and not have to rely on his gut alone.

I have high hopes for Senator Obama, and I actually dread the other two.