(3089/898) Free markets, predictions and information

2276) The stock market is s strange and wonderful thing. The immense effort that goes into explaining booms and busts masks their essential irrationality. One day mutual-fund investors are happy to shield their eyes from the wild risks they're taking;the next they're terrified and stuffing cash under mattresses. Everyone pretends to understand the panic; no one really does. Something changes in the collective mind.

Michael Lewis
"The Capitalist: The Silent Boom"
New York Times Magazine (1/12/1997)

2277) There are all sorts of necessary social and economic goods, [Robert] Kuttner says [in Everything For Sale], that markets can't be relied on to provide. Free markets underinvest in pure research, so government needs to finance it, or to structure the economy so that private companies can afford to conduct it. Government made us prosperous by creating the higher education system, railroads, canals, commercial aviation and the Internet. Moreover, markets generate problems - pollution, dangerous products, economic disasters like bank failures - so they need to be regulated. Regulation does not retard growth: "The zenith of the era of regulation - the postwar boom - was the most successful period of American capitalism." Finally, markets fail to provide all citizens with such essentials as health care, physical safety and basic economic security, so these have to come from government.

Nicolas Lemann
"When Markets Fail" in
New York Times Books Review (1/26/1997)
citing and quoting Robert Kuttner
Everything for Sale: The Virtues
and Limits of Markets (1997)

2278) We are endlessly indulgent of prophets and prognosticators, astrologers and nostrodami. They must, after all, know something. They can't be completely wrong, can they?

Julian Barnes
"Back to the Future" in
New York Times Book Review (1/26/1997)
[review of Paris In the Twentieth Century by
Jules Verne and Jules Verne by Herbert R. Lottman]

2279) Most predictions tell us less about the future than about the time at which the prediction was made. "Nineteen Eighty-four" is a surer guide to 1948, when Orwell was writing his novel, than to his dated hell.

Julian Barnes
"Back to the Future" in
New York Times Book Review (1/26/1997)
[review of Paris In the Twentieth Century by
Jules Verne and Jules Verne by Herbert R. Lottman]

2280) The nation whose population depends on the explosively compressed headline service of television news can expect to be exploited by demagogues and dictators who prey upon the semi-informed.

Walter Cronkite
A Reporter's Life (1997)
quoted by Tom Wicker in
"Broadcast News" in
New York Times Books Review (1/26/1997)