Speculative markets have always been vulnerable to illusion. But seeing the folly in markets provides no clear advantage in forecasting outcomes, because changes in the force of the illusion are difficult to predict.
Interpretation
Speculative markets are often misleading, and recognizing this doesn't necessarily improve prediction accuracy.
Robert J. Shiller highlights the complexity of speculative markets where illusions can cloud judgment. While it's essential to recognize the follies within these markets, understanding them doesn't simplify forecasting outcomes, as the dynamics of these illusions are unpredictable and can change rapidly.
In practice
During a financial seminar discussing market behavior.
Those on the downside of rising economic inequality generally do not want government policies that look like handouts. They typically do not want the government to make the tax system more progressive, to impose punishing taxes on the rich, in order to give the money to them. Redistribution feels demeaning. It feels like being labeled a failure.
That's the world we live in: when it comes to economics, people have emotions; it's not like chemistry or physics.
Money management has been a profession involving a lot of fakery - people saying they can beat the market, and they really can't.
We should not be focusing on quick solutions. The really important concern for policymakers everywhere is to prevent disasters - that is, the outlier events that matter the most.
If we wait until income inequality is much more severe, we will have a whole class of new superrich who will probably feel entitled to their wealth and will have the means to defend their interest. That's already gone far enough. We shouldn't let it become more extreme.
I think that a lot of people in all walks of life have the impression, of course, that, 'I specialize in something. I can't - I don't have the time to read other things. I'll just go to pure entertainment when I'm relaxing, and then I'll come back to my pure specialty.' That produces - that attitude produces idiot savants, unfortunately.
Freedom only for supporters of the government, only for the members of one party - however numerous they may be - is no freedom at all. Freedom is always and exclusively freedom for the one who thinks differently. Not because of any fanatical concept of 'justice' but because all that is instructive, wholesome and purifying in political freedom depends on this essential characteristic, and its effectiveness vanishes when 'freedom' becomes a special privilege.
From 1970 onwards, our culture told both sexes that individual expression was paramount. And for women, that was defined as the right to choose an interesting a career, a high-status mate, the desirable handbag or vacation, the perfect family size, and a definitionally fruitless quest for 'perfection.'
The literature of the inner life is very largely a record of struggle with the inordinate passions of the social self.
Far off, men swell, bully, and threaten; bring them hand to hand, and they are feeble folk.
No effect of work can be eternal.
Fake is as old as the Eden tree.
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