Should the credit raters undergo a security clearance?

Sir, Nassim Nicholas Taleb and Pablo Triana, “Bystanders to this financial crisis were many” December 8, are right in that we need to extract more accountability from the experts and from those that showed themselves incapable of questioning the experts. And, now and again, a please-return-your-Nobel-Prize back does not have to be so bad for the Nobel Prize either. That said I do not share in the extremisms like that of retiring “Value-at-Risk” books from the shelves” especially because those are exactly the books that now need to be reread so that we can learn from a better understanding of What-Was-Really-at-Risk.

Also, let us not look at this financial crisis as created only by financial scientists gone mad. The financial regulators are also to blame. Not only did they introduce minimum capital requirements for banks based on their own subjective interpretation of what risk means and without giving much thought on how that would affect the whole system but they also empowered some few credit rating agencies to be the official guides on risks which, as we have seen, was a magnificent act of pure madness.

Let me here ask the question that perhaps best helps to place the whole issue of the credit rating agencies in its real perspective. Since these agencies have been given so immense powers that if misused could turn them into dangerous weapons of mass destruction capable of inflicting big sufferings on humanity… should then the individual credit raters have to undergo a security clearance? Of course I do not imply any planned wrong doings, that I swear, but I guess you have to agree with me that this is at least great stuff for nail-biting movies.

Speaker’s Corner revisited

In 1872, the British Parliament decreed Speaker’s Corner in Hyde Park of London as a place reserved for free expression, and initially it attracted all those extremists who, although qualifying as nuts, still had the right to vent their opinions. Lately, we have all witnessed how the original Speaker’s Corner speakers moved into Speaker’s Studios and now radicalism, anarchy, or fundamentalism is voiced on prime-time television. All of us others considered as boring in-betweens, have now to settle gratefully for slots in after-midnight cable television, or Speaker’s Corner, (or FT when they published us).

Sir Cass Sunstein discusses the fundamental issue of “How the rise of the Daily Me threatens democracy” January 11, and he should be commended for it since indeed the most dangerous weapon for mass-self destruction in any society is divisiveness; as a columnist in Venezuela I should know; there I write in green but my readers can only read me in yellow or in blue.

The current sheer overload of information forces many to use a very simple though also very dangerous initial classification system that uses some basic common denominators. The one of these most recently used is of course Bush, and which has otherwise clear-minded people thinking: “Hugo Chavez speaks against Bush? Then he must be good!”

How do you fight it? The only way I know is by always pointing out the many shameful similarities of the extremes and trying to make life in the middle seem interesting, fun and chic. But, it still takes guts to swim in the middle of the river and not crawl up on an extreme safe shore!