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Nassim Taleb: Dangers of Protecting the Status Quo

Name: Nassim Taleb: Dangers of Protecting the Status Quo
Uploaded: 2013-04-22T20:31:54+00:00
Duration: 1 min 15 s
Channel: GHION.AI
Description: In this monologue, Nassim Taleb criticizes the Federal Reserve and governments for failing to apply the principle of antifragility in crisis response. He…

22 Apr 2013 · 1 min

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1:15

In this monologue, Nassim Taleb criticizes the Federal Reserve and governments for failing to apply the principle of antifragility in crisis response. He argues that crises should be leveraged to improve systems rather than restored to their pre‑crisis state. Using the 2000 California crisis as a positive example, he contrasts it with the approaches of Japan and Europe, which aim to preserve the status quo and inadvertently enrich those who caused the crises. Taleb warns that easy monetary policy fuels speculative gambling in financial markets and undermines the necessary trial‑and‑error process that drives genuine economic progress.

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The thing is what the Fed has been doing, the idea of the government, they don't understand antifragility, they don't understand that when you have a crisis, you should come out of it better than you were before. You guys had your crisis in California, remember? 2000, you weren't born many of you, okay, so almost, right? So you came out of it better off than before. No, it cleaned up the system. So you should never let a crisis go to waste. Now what happened in Japan and here and in Europe, they have a crisis, now they shoot to establish the system to bring it back to what it was before without letting what is fragile break and new things come in its place, you see. So the monetary policy aims at preserving the status quo and then also a side effect is of course to enrich those who who were involved in the crisis, all right, in causing the crisis. And of course it's not good to have such a, you know, to have very easy money because you don't want people to take money and go gamble with it in the stock market, you want it to go use the money for what you're doing, the real thing, the trial and error that you don't get respect for losing a little bit all the time.