My bubble of faith burst when Mr. Greenspan admitted that he had been wrong, after decades of setting policy for every administration, both sides of the isle. Since my first college course in economics in ’77, I’ve never really fully understood national/international economics. This clip makes me feel not so all alone. Is there really any hope for the rest of us to understand?
But something said in this interview shines a bit of light on the entire phenomena of economics: the entire system is driven by human emotion. And who among us can predict human emotion by the masses. It’s a little easier, if not scary to believe that human emotion, and therefore world economics, can be controlled, or at the very least, influenced.
In these modern days of nanosecond stock trading, how much does human emotion really come into play. Yes, it was humans that wrote these programs that make decisions to the order of thousands per second. And most likely human emotions and their reactions were taken into consideration. But nobody will argue that human emotions are fickle at best. Even if it can be done occasionally, predicting human emotions has to be quite difficult.
Anyway, it will be interesting to see how this all pans out in the coming years. The recovery actually seems to be gaining strength, if the media would simply get out of the way and leave emotions to weddings and cute kid pics.