I didn't write this. The author is a friend who emailed this article with a request that I post this on Daily Kos; I do so gladly. She's a noted playwright and a thought-provoking author, and her husband is Larry Seaquist, my Democratic state representative and interim party chair. I hope you enjoy this piece.
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Risk Management, According to Moby-Dick
Carla Seaquist
From Main Street the view is, in a word, frightening. We see the Wall Street firms that were bailed out in the ’08 crash because they were “too big to fail” are now, three years and a blizzard of reform later, grown even bigger---so big, says economist Simon Johnson, that when the next crash comes, they’d be “too big to save.” And the next crash? Increasingly we hear it’s a matter of when, not if, and that it will be worse than the cataclysm of ’08. Making it—what: Catalcysm Squared? The End?
Can we not manage better than this?
Apparently not. Risk management post-crash has not been confidence-building, either in Washington or on Wall Street itself. Disregard the P.R. fatuously trumpeting the “going forward” theme, check instead the risk management statements at the big Wall Street firms: Muzzy language continues to create an illusion of calm. Reference may be made there to market “volatility,” but none to the role that firm may have played in fomenting the volatility.
Crucially, in these risk statements the dog still not barking is…Main Street: Wall Street continues to assess risk only as it bears on itself---and not on the larger economy or on the nation. Meanwhile, lurking, lurking is the hidden derivatives market, estimated value now at 600 trillion dollars. Why is there so little discussion of this perilous risk: because its impact on our 14 trillion dollar economy is too awful to consider? Call me anxious, very anxious.
Which is why we need…Herman Melville. In his masterpiece Moby-Dick, or The White Whale, Melville speaks in vivid language of fatal things---things “fatal to the last degree of fatality”---words perfectly pitched to our present fraught state. While Moby-Dick remains in essence an epic tale of one man’s obsession and its killing costs, it also instructs on the risks of risk, as it were---and Wall Street needs to take these dead-serious lessons onboard. I will propose how in the closing. Readers will draw their own instruction in the following review without interference from me.
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