Sometimes I wonder if we don’t know 90 percent of what most of us laymen need to know about the financial crisis from simply reading Michael Lewis and John Lanchester. From Lanchester’s latest, in which he briefly and expertly slices to the heart of current crises with Northern Rock, Jon Corzine’s firm, and Olympus:
Three leading companies in three different businesses in three different countries, and the common thread between them is that an interested outside party, paying the closest of attention, and immersing herself in all the publicly available information, would have had no chance of knowing what was really going on. It’s the kind of thing De Quincey calls ‘a vicious obscurity’. Nobody knows anything: that was William Goldman’s axiom for anyone who has anything to do with the movie business. Fair enough – but it isn’t supposed to apply to the working of huge, publicly owned companies in developed modern economies. And yet, it seems to be the case that even here, especially here, nobody knows anything. Wow. There’s so much big-picture bad economic news at the moment that it may seem hard to get excited about this point – but it is an important one, because it shows just how badly capitalism has been functioning, even on its own terms.