Tim Harford, FT, yes, let us be real blunt: criticism works, but only when it is acknowledged.

Sir, I refer to Tim Harford’s “Let’s be blunt: criticism works” September 13.

Let me cite from John Kenneth Galbraith’s “Money: Whence it came, where it went” 1975: “What people do not understand, they generally think important…[but] If one is pretending to knowledge one does not have, one cannot ask for explanations to support possible objections.”

That describes the case where the walls have become too high for constructive criticism to even be acknowledged by the participants.

Take for instance the Financial Times. For a decade, in thousands of letters, I have informed its editor, its reporters and its columnists, of some serious weaknesses in the portfolio-invariant credit-risk weighted capital requirements for banks. Yet I have not been able to get any assistance in transmitting to the regulators some simple questions asking for explanations.

For instance this very straightforward question: Dear regulator. Since dangerous financial excesses do always result from building up too large exposures to assets that are ex ante perceived as safe but that ex post turn out to be risky, why must banks hold more capital against what is ex ante perceived as risky?

The regulators do not want to answer little insignificant me… but, if it was FT who formally asked for explanations that would of course carry much more weight.

And frankly is not asking for explanations “Without fear and without favour” that what journalism is all about? Why then do you not then stop pretending you know so much and dare ask for some explanations? Or is this just too much criticism for you to swallow?

I am not only asking FT for help. I just send out a message to all US congressmen and governors with a list of questions it behooves them to make to the Fed, FDIC, and OCC.

@PerKurowski

If John Kay truly believes in liberal education, he should help question the decisions of the job-specific trained.

Sir, John Kay writes: “the capacities to think critically, judge numbers, compose prose and observe carefully — the capacities that education can and should develop — will be as useful then as they are today” “The timeless benefits of a liberal education” August 26.

Indeed but that requires that the capacity of thinking critically gets a chance to be heard by those who certify having job-specific skills. And for that to happen those who write newspaper columns have a very special role in forwarding the observations.

Here just one example: Bank regulators, with supposedly many job specific skills, decided for instance that assets rated BB- present immensely more possibilities of generating unexpected losses than assets rated AAA. And as a consequence they require banks to hold much more capital against BB- assets than against AAA assets.

And there are freethinkers like me who holds that to be utter nonsense, because clearly the riskier an asset is perceived, by definition the less are its possibilities to generate unexpected losses. 

But, can I get help to forward this and many other similar observations on our current bank regulations? No - because journalists clearly believe much more in the regulators' job specific skills than in any liberal education and critical thinking. Is it not so Mr. Kay?

@PerKurowski