Posts
Thursday, May 13, 2010
Evidence and data: what caused the financial crisis?
One of my favorite bloggers, Barry Ritholz, has a great essay up on his blog today about the 30 year trajectory of American financial policy and innovation that underlies the crash. The essay is short, to the point, and readable. He says that data and evidence have to underlie explanation; ideological and political beliefs are not equivalent to data and evidence. He says that many people are rewriting current history to absolve themselves and their pet political or ideological stance from blame.
Subscribe to:
Post Comments (Atom)
Really interesting essay. I think the most frustrating part of the bailout is that the executives and politicians who played major roles in causing the financial meltdown spin stories and shift blame when the truth is obvious. I remember the executives at the Goldman hearing talking in circles instead of owning up to what everyone knew they had done. Unfortunately history is always biased but I hope people continue to question these politicians and executives to support their actions with real data.
ReplyDeleteI really like this post. Ritholtz does a good job making the distinction between an objective analysis of the crisis and one that serves a political or ideological interest. I think it's important to think about a person's motivations when they offer up an explanation of the crisis.
ReplyDeleteI really enjoy the last paragraph of the essay in which he states "Its way past the time to call out their intellectual dishonesty. If you cannot show any data, if you cannot prove what you are alleging with actual facts, you need to be called out for what it is you actually are: Proponents of a failed philosophy." You can't just play the blame game if you cannot prove it with facts and data. But on the other hand as Tommy pointed out in class last week is that you cannot always trust the facts and data that are presented. So as we sift through everything and try to pinpoint what and who caused this crisis we must analyze not only data but determine how valid it is, because many people committed fraud to cause the crisis and they will probably do it again to relinquish any guilt of it.
ReplyDeleteI was really interested in what he was saying and to a certain extent I have to agree with him, data should play a much larger role in not only policy, but planning. However, He totally ignores the fact that data itself can be very misleading. To me the most problematic sentence is this one: "Of course, folks like Hassett hate this factual history." "Factual history," is an incredibly problematic phrase as the definition of facts relies on an implicit assumption that historical events can be simplified without changing the nature of the facts. I may be too extreme in this view and I can understand and even agree with some of what Ritzholtz says, but he pretends that "data and facts" are real and that nothing else is, he assumes that data isn't in and of itself problematic.
ReplyDeleteGreat essay that was very readable. The thing that comes to mind when I read this is that there are a lot of facts and as we have talked about in our class is that you can't always be sure on the date at hand. One should take it into consideration but that doesn't means its all true. Its just hard to point out exactly who caused this crises.
ReplyDelete"Rather than produce evidence, they create story lines unsupported by facts. But Monkeys love a good narrative, and so they give that to them." I think he is succinct and to the point in his opposition of political agendas. His emphasis on data as evidence is hard to ignore or disprove which is why I believe he offered to pay $100,000 to anyone who could disprove him.
ReplyDeleteThis was a very interesting essay. He points to data for evidence, but like Tommy presented last week, data can be very deceptive and may not be sufficient or credible in certain cases. I do like that he points out the differnt aspects of this blaming trend and provides some insight on his opinion of the blaming that has taken place.
ReplyDelete