by Zeke Allen

Created on: May 04, 2009

This is outrage.
If you really want to understand what I am talking about, you probably ought to read The Black Swan or Fooled By Randomness or even Liar's Poker, the authors know way more than me and write better than me too.
If you just want to get this over with, I'll say it as concisely as possible.
First off we have some rather large and incredibly dangerous assumptions:

1. Intelligence can be measured by degrees awarded, salary, and political power or positions
2. The government is always incompetent and inefficient, particularly when compared to private industry, even more particularly when compared to all the incredibly intelligent (as measured by degrees from Ivy League Schools, big salaries, and political power) folks on Wall Street
3. Public servants like Hank Paulson, Tim Geitner, Alan Greenspan, et al. are actually interested in serving "the public" as opposed to "their public" which consists mainly of them and their friends, generally employed on or slightly off Wall Street, generally very wealthy, and generally interested in making sure they can make more money.
4. Financial instruments are so complex that ordinary people, even ordinary people with highly intelligent minds and the ability to read and parse huge quantities of information cannot understand them. They are so complex and so amazingly intricate that only the people who write them (and subsequently watch them destroy the financial system) can work with them and understand them.
5. Shareholders who received completely unrealistic returns on their money for years should now be shielded from the necessary adjustment because they didn't understand the risk involved when they invested.
6. The United States is a representative (representative of the general public) democracy.

Now that you are not making any of these assumptions, we can get back to the rage that you've waited so patiently for.
Bear with me, I am going to talk about the International Monetary Fund. Briefly.
According to a friend who worked there, it is so filled with inefficiency, corruption, and all other problems associated with a large, constituent-less bureaucracy as to be nearly non-functional, but it does serve a particular purpose. In this case, it serves to explain a problem that exists in the United States that people in the IMF have witnessed all over the world.
As detailed by Simon Johnson in his article "The Quiet Coup" in this month's Atlantic, the ability of any oligarchy to take over the reins in even relatively stable "democracies"

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