Rod Dreher

David Leonhardt says that yes, BP had a reputation for cutting safety corners, but we shouldn’t make the mistake of thinking that the rest of us are immune to falling into the same cognitive trap that the oil giant’s executives did. Excerpt:

For all the criticism BP executives may deserve, they are far from the only people to struggle with such low-probability, high-cost events. Nearly everyone does. “These are precisely the kinds of events that are hard for us as humans to get our hands around and react to rationally,” Robert N. Stavins, an environmental economist at Harvard, says. We make two basic — and opposite — types of mistakes. When an event is difficult to imagine, we tend to underestimate its likelihood. This is the proverbial black swan. Most of the people running Deepwater Horizon probably never had a rig explode on them. So they assumed it would not happen, at least not to them.
Similarly, Ben Bernanke and Alan Greenspan liked to argue, not so long ago, that the national real estate market was not in a bubble because it had never been in one before. Wall Street traders took the same view and built mathematical models that did not allow for the possibility that house prices would decline. And many home buyers signed up for unaffordable mortgages, believing they could refinance or sell the house once its price rose. That’s what house prices did, it seemed.

You read Taleb’s book yet, now out in a new paperback edition? You should. It’ll mess with your head.
By the way, the BBC’s Peston reports speculation among BP execs that the company’s name is destroyed in the US now, such that it may have to leave America entirely. You know what? About the only thing that could possibly make me feel sorry for this company is if George Rodrigue, the Cajun Thomas Kinkade, came out with a drawing of that horrible little Blue Dog, all covered in oil and looking for its master. You know it’s coming. If you spot one, let me know, so I can galumph down to the Prytania to throw popcorn at the screen. But I digress…

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