Sublime

Weigh second- and third-order consequences.

“They have hired astronomers; they have hired mathematicians; they have hired physicists; they have even hired theologists. They never even interviewed an economist.”

It traditionally assumed that firms were independent, and so changes would be independent, and so their sizes and aggregate effects would be distributed normally.

so deeply uncomfortable saying, “I don’t know” or “it depends,” especially in finance.

This is why it always pays to triangulate your views with people who you know synthesize well.

Institutions that are “too big to fail,” and have a significant risk of doing so, should be broken into pieces that are small enough to fail without jeopardizing the financial system. As Alan Greenspan finally admitted, “Too big to fail is too big.” This is a catchy sound bite but it misstates the real problem. It’s not the mere size of an