I have nothing to say about the finan­cial crisis, because I dis­cover that as a heavy news reader who has scraped through classes on law, eco­nomics and com­plex sys­tems, and even read some Galbraith on a bus once, I don’t have even first prin­ci­ples to judge what has just hap­pened in the US finan­cial system. The subject–the impen­e­trable inter­play of finan­cial “instruments”–is so inscrutable that any com­pre­hen­sible nar­ra­tive one tries to tease out of it by watching the shadows it casts on the wall seems to have more to do with what goes on in one’s own head than what goes on in the stock mar­kets or board­rooms or policy lairs of the world. I just have no idea about where it came from, or what it means, or what should be done, or where it will go. All I’ve learned is that the people who pre­sum­ably do have the exper­tise to deal with this, pos­sibly don’t.

But everyone is telling one story or another about it all the same. And they usu­ally boil down to public versus pri­vate, gov­ern­ment versus market. Here’s a somehow rather heart­ening thought from com­menter HH at Crooked Timber:

The left-​​right polar­iza­tion over and pri­vate enter­prise is over­shad­owed by the larger con­flict between truth and lies. Both free market and planned eco­nomic sys­tems can func­tion with rea­son­able effi­ciency when oper­ated with com­pe­tence and integrity. Neither can func­tion when overrun by thieves and liars.

America’s moon landing pro­gram and nuclear sub­ma­rine projects were mas­ter­pieces of cen­trally planned, gov­ern­ment spon­sored endeavors. France’s nation­ally con­trolled nuclear power pro­gram achieved great suc­cess, while America’s pri­vately man­aged nuclear power efforts stum­bled. It is the ani­mating vigor and func­tional integrity of a pro­gram that is the best pre­dictor of suc­cess, not its ide­o­log­ical grounding.

To which I think I would add that we get a some­what better chance at choosing thoughtful cri­teria for what ‘suc­cess’ means for public enter­prises than for private.

Here’s an old-​​hand finan­cial tech­ni­cian inter­viewed by Reason mag­a­zine people:

(Just inci­den­tally, I’m tickled to note that the Reason blog linked to this little old web­site a few days back).

I don’t under­stand how he gets from some of his premises to some of his con­clu­sions. But his cen­tral premise feels about right: nobody knows how to value these deriv­a­tives, which seem to have absorbed so much of the nations wealth and now may or may not even par­tic­u­larly exist as real enti­ties in the real uni­verse. The old bosses didn’t know how to value them, and the new bosses won’t either, once they’ve sunk so much more of the country’s trea­sure into get­ting a chance to try.

But we won’t admit to our­selves that we’re dealing with an uncer­tainty, will we? Instead we’ll talk our­selves into believing one thing or the other, and forge ahead on that basis.

A sep­a­rate but related ques­tion: how does a country that can’t afford equi­table edu­ca­tion or health care keep finding hun­dreds of bil­lions of dol­lars lying around when there’s a country to be invaded or a bank to be bought out? Where does all this money come from? And why wasn’t it there before?