Capital Institute Blog

Adair Turner, Chairman of the FSA (the SEC of the United Kingdom) is smart, articulate, and more aware than any senior regulator or finance official currently in power on this side of the Atlantic in my judgment. His 2011 Clare Distinguished Lecture in Economics and Public Policy on Reforming Finance is worth reading. In it, he discusses three interrelated ongoing…

I attended the annual US Department of Agriculture conference this week in Washington DC. My job was to participate on a panel with The Savory Institute, organized by the Risk Management Agency of the USDA. Our topic was “Critical Thinking: The Best Risk Management Tool.” My message was about systems thinking, and how the financial system collapse

I am no Middle East expert, and clearly there are a multitude of factors beyond a humiliated fruit cart vendor in Tunisia that have triggered the revolutions playing out on our nightly news. Certainly decades of repression and unfathomable corruption (Mubarak is thought to have in excess of $40 billion invested securely outside Egypt) are primary drivers. But I would…

“We conclude first and foremost that the crisis was avoidable,” declared Phil Angelides, chairman of the Financial Crisis Inquiry Commission.  No act of God.  Thanks Mr. Chairman. The report is weak and inconclusive, with no clear root causes.  The FCIC is no Pecora Commission, the exhaustive, two year inquisition into the causes of the 1929 crash in which

I sure got that one wrong. At the end of my 2009 year end letter to Lloyd Blankfein, Chairman and CEO of Goldman Sachs, the third in an exchange that took place during the depths of the financial crisis, I predicted that Goldman clients would begin to defect, either of their own volition, or because their own

I have discussed the problem of reductionist thinking, grounded in the Enlightenment, in the past. Nowhere is reductionist thinking more in force than in finance. Derivatives disaggregate risk into component parts, and then atomized parts are reconstructed into new wholes using securitization. This process goes on, with greater and greater leverage applied until it

Andrew Carnegie’s essay titled “Gospel of Wealth” 

I was privileged to co-sign this Open Letter to President Obama as the UN Climate Change Conference opened in Cancun last week.  It calls for the US to live up to its prior commitment to support climate change funding for mitigation and

“There Will be Fuel”, by Clifford Krauss, was the feature article in a special Energy section of the NY Times on November 16th. Not only was it amateur and unbalanced, it was irresponsible. The thesis was “peak oil is a joke, we’re now swimming in oil”. Nothing could be

I am grateful to the Triple Crisis Blog for making me aware of the passing this month of the great mathematician, Benoit Mandelbrot, who coined the term “fractal”. Mandelbrot defined a fractal as “a rough or fragmented geometric shape that can be split into parts, each of which is (at least approximately) a reduced-size

I recently gave the keynote at the annual meeting of Oregon Rural Action in La Grande, Oregon, “Making the Shift: Building a Vibrant Local Economy Amidst the Broken Global Financial System.” (My slide deck is posted on our resource section here.) To