Oct 8, 2008

wisdom of crowds vs. stupidity of crowds

this short report from our favorite usa is tragically ridiculous...

my takeaway is that people, and especially crowds are often massively stupid and will eat anything if somebody makes them believe it is good. sometimes they don't even have to believe it is good, they just move with the crowds. buy your dream home... you can do it..

the financial world took great advantage of this in recent years, but it turned out that the crowds they poisoned dragged them down too after all.. well, too bad.. the evil and irresponsible financial machine fucked itself up seriously..

where does a crowd start to make wise decisions? was it really that hard to see that real estate prices can't go up and up endlessly? was it really hard to see that gas prices aren't going to stay low? wasn't it evident that an adjustable rate mortgage can actually adjust in a way that you won't be able to pay it??

great corporations, legislators, industries have huge responsibility. they shape the trends, crowds will follow. using economic growth, profit, gpd and the like as the only important indicators for success is not only short sighted and foolish, it is also evil.


Ricco said...

The economic system, the way it is practiced now only allows profit maximizing companies. As competition would deal with the ones that think that profits are not important.
It would be the role of governments to deal with the inefficiencies of the system and e.g. create taxes for goods with incorrect prices like petrol.
And as it seems, if you don't do enough regulation before you have to pay the price after.

Anonymous said...

Great news about this in this Hungarian article

Lez said...

Personally I don't have any difficulties imagining Americans living in deep dumbness. They still do it today although they are one lesson ahead now.

Lezlancs said...

One more thing:
wassuuuuuup :)

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