When You Don’t Know History, You are Doomed to Repeat It

“The Federal Reserve bank protected them at our expense: when “conservative” bankers make profits, they get the benefits; when they are hurt, we pay the costs.”


pg 43, The Black Swan: The Impact of the Highly Improbable by Nassim Nicholas Taleb

Here’s part of the paragraph before this line.

“In the summer of 1982, large American banks lost close to all their past earnings (cumulatively), about everything they ever made in the history of American banking – everything. They had been lending to South and Central American countries that all defaulted at the same time – “an event of an exceptional nature.” So it took just one summer to figure out that this was a sucker’s business and that all their earnings came from a very risky game. All that while the bankers led everyone, especially themselves, into believing that they were “conservative.” They are not conservative; just phenomenally skilled at self-deception by burying the possibility of a large, devastating loss under the rug. In fact, the travesty repeated itself a decade later, with the “risk-conscious” large bans once again under financial strain, many of them near-bankrupt, after the real-estate collapse of the early 1990s in which the now defunct savings and loan industry required a taxpayer-funded bailout of more than half a trillion dollars.”


About doucementgently

I'm a thirty-something female with loads of kids, a great husband, and lots of things on my mind. I plan on blogging about homeschooling, personal finance, the economy in the U.S., politics, family life, and the things my children do.
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One Response to When You Don’t Know History, You are Doomed to Repeat It

  1. This whole this is amazing…the Government has such an excellent track record of repaying money that it uses and doesn’t have.

    Mark this day on your calendar…twenty years from know we will regret it more than we do today.

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