Tinkerbell

The political dimension is that in which things become true if enough people believe in them, but one can never acknowledge that it is the Tinkerbell principle which supports the whole thing. It is, in this sense, fraud.

To take it to the next step, one can thus create something out of nothing. Fractional reserve banking, for example.

Bethany McLean 12/02/2010 "All the devils are still with us"

Bethany McLean is the journalist who uncovered the Enron scandal, and was penalized for this, just days before the company went tits up. This book looks at the current mess.

She starts with her bio. Math/English major, grunt job at GS, grunt job at Fortune (or a similar mag), turns it into a bi-weekly column "Stocks to watch" where she finds companies with a great story and hypes them. Learns cynicism-- great stories don't make great companies, and people cook the books.

So she writes about Enron, and gets it right.

Now she has written about the credit mess. The usual fault is human greed and incompetence.

Does it all as human stories. that's what Journalists do. Founder of countrywide sees homeownership as a boon, wants it for everyone, and wants his company to be the biggest in the world. So he offers any kind of mortgage that anyone else offers, and takes the same shortcuts needed to compete (short-term).

Don't underestimate incompetence.
Bad incentives lead to bad behavior.
Nothing has been fixed.

She is a horrid speaker, full of word-stuttering (repeating a phrase 3 times), but I think I would like to be her friend.