You can, at least virtually, at http://www.rahamuseo.fi/peliEnglish.htm thanks to the central bank of Finland. I did pretty well according to the newspapers. Too bad President Obama overlooked me when choosing the latest three members of the Board of Governors of the Federal Reserve. (Actually, his choices look very strong to me.)
Archive for the ‘amusing diversions’ Category
PBS has done an interesting and entertaining show on “rational” economic models vs. psychological models in the light of the recent crisis. Link here. The program gets into the pool player analogy, shows experiments like auctioning a dollar (which is a great example of an experiment that people very quickly learn not to be tricked by), and ends with John Cochrane and Bob Shiller (who gets the last word). What I see from inside finance and academia is a great surge of rational economic models on various features of the crisis. The study of psychology and economics has been moved to the back burner. We are studying models with moral hazard, adverse selection, informational asymmetries, and lack of knowledge rather than the psychological search to understand the actions of homo economicus and to identify which actions are self-interested and which are mistakes. In some sense, this is a condemnation of the previous models as at least incomplete. In another it reflects the fact that the “rational model” is an approach rather than a testable theory (apart from the unscientific concept of welfare commonly used in economics and at the heart of the psych-econ vs. rationalist debate). A question for those outside of these research debates. . . Do you think the American public is angry because it believes that the bankers, executives, etc. acted in their own, rational self-interest or because it believes they made mistakes that anyone could have made? I would guess the former, with perhaps the exception of the mortgages written “that people could not afford” where the public blames either the borrowers or the lenders.
My brother-in-law pointed out this post on the WSJ blog and it made me laugh. It has a fair bit of truth: John Q. Public does not understand the extent to which derivatives and banks support business as usual during good times. I think the quote is from the movie “A Few Gold Men.”
You want the truth? You can’t handle the truth. Son, we live in a country with an investment gap. And that gap needs to be filled by men with money. Who’s gonna do it? You? You, Middle Class Consumer? Goldman Sachs has a greater responsibility than you can possibly fathom. You weep for Lehman and you curse derivatives. You have that luxury. You have the luxury of not knowing what we know: that Lehman’s death, while tragic, probably saved the financial system. And that Goldman’s existence, while grotesque and incomprehensible to you, saves pension funds. You don’t want the truth. Because deep down, in places you don’t talk about at parties, you want us to fill that investment gap. You need us to fill that gap.
We use words like credit default swaps, collateralized debt obligation, and securitization? We use these words as the backbone of a life spent investing in something. You use them as a punchline. We have neither the time nor the inclination to explain ourselves to a commoner who rises and sleeps under the blanket of the very credit we provide, and then questions the manner in which we provide it! We’d rather you just said thank you and paid your taxes on time. Otherwise, we suggest you get an account and start trading. Either way, we don’t give a damn what you think you’re entitled to!