Lawrence Summers, former president of Harvard, home of the rat psychology of Skinner and Quine, today offered a lesson in behavioral economics.
From a transcript of Summers’s remarks (for a video, see the previous entry)–
“An abundance of greed and an absence of fear on Wall Street led some to make purchases – not based on the real value of assets, but on the faith that there would be another who would pay more for those assets. At the same time, the government turned a blind eye to these practices and their potential consequences for the economy as a whole. This is how a bubble is born. And in these moments, greed begets greed. The bubble grows.
Eventually, however, this process stops – and reverses. Prices fall. People sell. Instead of an expectation of new buyers, there is an expectation of new sellers. Greed gives way to fear. And this fear begets fear.
This is the paradox at the heart of the financial crisis. In the past few years, we’ve seen too much greed and too little fear; too much spending and not enough saving; too much borrowing and not enough worrying. Today, however, our problem is exactly the opposite.
It is this transition from an excess of greed to an excess of fear that President Roosevelt had in mind when he famously observed that the only thing we had to fear was fear itself. It is this transition that has happened in the United States today.”
Related material
Harvard-Style:
Spatial Practice,
Paris-Style:
“Voids, a Retrospective,”
an exhibit of empty rooms
that runs through March 23
at the Centre Pompidou
See also “Art Humor“
and “Conceptual Art.”