This Year's Lay

Bernie Madoff is every bit as emblematic of this financial era as Enron CEO Kenneth Lay was of his. Is anyone really all that surprised that such a Ponzi scheme could exist in this era of electronic purchase and transfer of derivatives based on bullshit? Especially when Bernie was one of the inventors of electronic trading?

Paul Krugman hits the nail on the head:

Most of all, the vast riches being earned — or maybe that should be “earned” — in our bloated financial industry undermined our sense of reality and degraded our judgment.

Think of the way almost everyone important missed the warning signs of an impending crisis. How was that possible? How, for example, could Alan Greenspan have declared, just a few years ago, that “the financial system as a whole has become more resilient” — thanks to derivatives, no less? The answer, I believe, is that there’s an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they’re doing.

So as we've always suspected, nobody knows anything, and with this debilitating crisis, they know even less.

If there's any lesson of intelligentsia on the Internet, it's that the experts so often aren't, that there's trumping intelligence outside of the career track. In the political Web, it really started with the 2000 Gore-Bush recount and developed over the course of the Bush Administration to fully bloom in this past year.

And now for the financial world.