A Smart Man and an Idiot

At Scientific American, you can read an article by a smart man, Jeffrey C. Sachs on dealing with future economic and other crises that are coming down the pike:

Cascading failures are an emergent phenomenon of a network, rather than the independent and coincidental failures of its individual components. Although it is true that many banks in the U.S. and Europe simultaneously overinvested in mortgage-backed securities (MBSs) to their peril, positive feedbacks in the global economic system amplified those errors. Bank regulators and macroeconomic policymakers have focused too much attention on the individual nodes of the network (that is, on each bank, and each national economy) without proper regard for the system-wide amplification.

On the Wall Street Journal's Opinion page, you can read an article by a man who makes a lot of money selling a newsletter to people who work in the investment field.  It's no wonder these people never learn:

Gold is a hard master, and a capricious one, too, insofar as growth in the world's monetary base depends on the enterprise of mining engineers. But, as we have seen lately, there is no caprice like the caprice of sleep-deprived Mandarins improvising a monetary solution to a credit crisis (or, for that matter, of fully rested Mandarins setting interest rates by the lights of their econometric models).

...

After Mr. Bernanke gets a good night's sleep, he should be called to account for once again cutting interest rates at the expense of the long-suffering (and possibly hungry) savers. He should be asked to explain how the central-banking methods of the paper-dollar era represent any improvement, either in practice or theory, over the rigor, elegance, simplicity and predictability of the gold standard.