Margaret Wente in today’s Globe and Mail:
The lesson of the black swan is that the world is governed not by ordinary and predictable events but by extraordinary and unpredictable ones. The asteroid that wiped out the dinosaurs is an example of a black swan. The Internet is a good black swan, the crash of ’08 a bad one. Except for one or two eccentric cranks, no one saw it coming.
An easily Googlable Bloomberg story, in which Nassim Taleb, author of The Black Swan, insists the economic crisis is not—repeat, not—an example of a black swan, and explains that among other people he—Taleb—saw it coming some time ago.
“The financial ecology is swelling into gigantic, incestuous, bureaucratic—when one fails, they all fall,” Taleb wrote in The Black Swan: The Impact of the Highly Improbable, which was published in 2007. “The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup.”
Taleb said the current crisis is a “White Swan”, not a Black Swan, because it was something bound to happen.
“I was expecting the crisis, I was worried about it,” Taleb said. “I put my neck and money on the line seeking protection from it.”
Wow, is that ever embarrassing. And it’s precisely why we’re not reading Wente anymore unless someone calls our attention to something particularly extraordinary. In this case, that person is Dan Gardner, who politely notes this egregious error on his new blog.