06 January, 2012

Parallel Lack of Standards: the IPCC & Bust Banks

See Donna Laframboise’s What Financial Meltdowns Teach Us About the IPCC”:
Boomerang: Travels in the New Third World is Michael Lewis’ latest book on the global financial train wreck.  Brimming with sharp observations and fabulous turns of phrase, it examines recent financial shenanigans in Iceland, Greece, and Ireland among other places.
I experienced a shock of recognition while reading those case studies.  People were doing bizarre things that they—and all of those around them—should have known would lead to tears.  Yet almost everyone bought in.  Normal rules were jettisoned.  Ordinary morality was abandoned.  Disbelief was suspended.  The few souls who tried to sound the alarm were ignored, ridiculed, demoted, or fired.
In other words, the behaviour I’ve spent the past three years writing about isn’t unique to climate science.  The same pattern is horrifyingly evident elsewhere.  It’s as though our IQs have all dropped sharply in recent years.  It’s as though we have no standards anymore.  [...]
When a Danish bank wrote a report concluding that something was amiss in the Icelandic banking sector the reaction was eerily similar to what we see in climate science.  The messenger was accused of having suspect motives and the message was summarily dismissed.
When an economics professor from Chicago gave a speech five months before Iceland’s economy crashed in October 2008 (in which he declared that their banks were already dead and that the economy had no more than nine months) Lewis reports that Iceland bankers in the audience “sought to prevent newspapers from reporting the speech.”
In other words, a gang of Icelandic kids trashed their nation’s economy.  And rather than stopping them, the grownups went along for the ride.  The checks-and-balances we would all expect to have been in place, the safeguards we would imagine going hand-in-hand with financial transactions of that magnitude, were entirely absent.
Does this make rational sense?  No.  Does it sound plausible?  Not really.  But it happened.  And the people of Iceland are going to be living with the consequences for a long, long, long time.

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