The Atlantic's Matthew O'Brien wants us to look at this chart.
Which supposedly shows that the bankers know more about the stock market today. And ignore the chart below which shows that bankers have been using their superior knowledge to control stock volatility.
His logic seems backwards, volatility seems larger today than in 1929. And further, the markets are getting more volatile.
If bankers and government have gotten better then why do we have this repeating pattern, and why did the market today drop much faster in 2009 than 1929? Further, is O'Brien saying that the current, nearly vertical, rise in market evaluations come from superior knowledge of today's magicians?
He claims that industrial production dropped much further in the 1929 crash. OK, but our GDP has dropped smoothly from 4% to 2% over the last thirty years. If bankers were much more accurate today, then why all the stock volatility for a mere 1/15 percent/year drop in GDP? Is he saying that the great depression was some major error in government? I don't think so, the Great Depression was a well know coordination failure, a risk well known at the time, having little to do with government.
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