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The '08 Meltdown Is Like Vietnam

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The economic meltdown of 2008 is like the catastrophe of the Vietnam war, a reviewer says," the NYT Week in Review team notes. "Both were brought on by “the best and the brightest” while skeptics went unheeded."

"While granting that Vietnam took a higher direct toll in lives, Simon Johnson in The New Republic Johnson writes:

… With all the appropriate corrections and disclaimers, the parallels are eerie and the contrasts are telling. Halberstam completely nailed the characters who led us deeper into Vietnam: their combination of self-confidence, experience, limited worldly understanding, deficient empathy—and this was perhaps the most amazing discovery—collective lack of wisdom. Patterson’s characters have essentially the same attributes. His portraits are sympathetic and most of his individuals are enviably brilliant, although not generally charming. But put all these brains together and let them build mathematical systems of “risk management” and “hedging,” and what do you get? By far the most dangerous financial system ever known.

Michael Lewis tells this story through their antithesis on the short or negative side of the market. His characters are exceedingly reminiscent of Daniel Ellsberg, a smart yet quirky fellow who confronted Defense Secretary Robert McNamara with skepticism and finally—in deep disgust—took it upon himself to leak what became known as the “Pentagon Papers.” Lewis’s heroes face down authority, but not in meetings and with memos or in the back of Air Force planes. Instead they run around trying to find ways to place bets on the collapse of the entire system of “subprime” mortgage financing in this country. They face an amazing wall of incomprehension—a wall constructed from group-think."

SOURCE:   New York Times