It is tempting, indeed irresistible under conditions of uncertainty, to base policy to a degree on theoretical preconceptions, on a worldview, an ideology. But shaped as they are by past experiences, preconceptions can impede reactions to novel challenges.
One can't expect to receive praise, or even to avoid criticism, for preventing a bad thing from happening unless people are sure the bad thing would have occurred had it not been for the preventive effort. If something unlikely to happen doesn't happen (and, by definition of "unlikely," it usually will not happen), no one is impressed. But people are impressed — unfavorably — by the costs incurred in having prevented the thing that probably wouldn't have happened anyway.
Most people, even most experts, were especially unlikely to be persuaded by prophets of doom in the absence of a machinery for aggregating and analyzing information bearing on large-scale economic risk. There was no financial counterpart to the CIA to assemble an intelligible mosaic from the scattered pieces.
A focus of reform, therefore, should be the creation of a centralized, unitary financial-intelligence apparatus in government that would have complete and continuous access to the books of all financial institutions.
He is talking his book, which comes out in a month.
