Historians get really nervous about patterns. That’s changing a bit now. And the truth of it is there’s not much way to avoid the 500‐year cycle. You almost have to work too hard to unsay it, it’s so obviously there in every way. And if you say every 500 years we go through one, then you immediately say we’re in the 21st century and baby are we going through one.
We know very little about complex financial systems and how systemic risk, as it’s called, is computed and how you would manage policies. And if you look back at the financial crisis, you can either say, as many economists do, “It all had to do with badly‐designed rules,” which may be part of the story; it’s certainly part of the story. Or it may have to do with the interaction of those rules and human nature, like mortgage broker greed, optimism… And you see it not just in individuals who now have houses and foreclosure, but at the highest levels.