The Great and Powerful Oz

Human beings aren't very good at predicting the future. Perhaps, because it is difficult, mystical powers are conferred on anyone who appears to have the knack. Just like in the Emerald City; power, prestige and great riches are lavished on the anointed (or self-anointed). Inevitably, it all ends badly. Any five-year old knows from fairy tales that these are fleeting gifts. When the inevitable happens, we are harsh to judge, banish and vilify that which was lauded just recently. As soon as he is exposed by Dorothy, the Wizard must leave the Emerald City immediately.

Why then, do we act surprised when it turns out that Alan Greenspan is no more prescient than any off us; that Wall Street executives and money managers have no crystal ball; that a succession of Treasury Secretaries have no answer for the future. We are not five-year olds. We should stop acting like them.

The answer lies in the present, not the prescient. Before anyone can act to fix a problem, it is necessary to be transparent about the symptoms. What are the assets on the balance sheets of the banks? Who will be hurt if we let the debt and equity holders of broken institutions be wiped out? There is no Wizard out there. There are only hard realities and painful choices that we have to make a society based on what resources are available and how we want to steward them for ourselves and the future. 

Our government has no more ability to create resources where there are none than the Wizard of Oz.  Look carefully behind the curtain.