Having explained to everyone what’s wrong with the world, Black Swan celebrity Nassim Taleb now explains how to fix it.
Taleb’s full “To Do” list in the FT here. Here’s a summary:
1. Bust up anything too big to fail.
2. Don’t socialize losses and privatize gains.
3. Don’t give people who were driving a school bus blindfolded (and crashed it) a new bus. New management and regulators, please.
4. Do not let someone making an “incentive” bonus manage a nuclear plant. Odds are he would cut every corner on safety to show “profits” while claiming to be “conservative”.
5. Keep it simple, stupid. [Easier said than done?]
6. Ban complex derivatives because no one understands them.
7. Stop trying to “restore confidence” by denying rumours. If you have to “restore confidence,” it’s because you’re weak.
8. Don’t try to cure drug addicts by giving them more drugs. Ie, the solution to the crisis is not to get everyong loading up on debt again.
9. Citizens should not invest in financial markets. “Markets…do not harbour the certainties that normal citizens require. Citizens should experience anxiety about their own businesses (which they control), not their investments (which they do not control).” [And the alternative is?]
10. “Make an omelette with the broken eggs. “Finally, this crisis cannot be fixed with makeshift repairs…. Let us move voluntarily into Capitalism 2.0 by helping what needs to be broken break on its own, converting debt into equity, marginalising the economics and business school establishments, shutting down the “Nobel” in economics, banning leveraged buyouts, putting bankers where they belong, clawing back the bonuses of those who got us here, and teaching people to navigate a world with fewer certainties.” Then we will see an economic life closer to our biological environment: smaller companies, richer ecology, no leverage. A world in which entrepreneurs, not bankers, take the risks and companies are born and die every day without making the news.”