Intended Consequences

After two years of studying the cause and effects of what is now labeled the great recession, one of the most frequently used terms dealing with the damage inflicted on investors and our economy is unintended consequences. I find this terminology a form of hypocrisy for the mere fact that one would have to assume that those individuals in control of making the decision that resulted in the negative consequence were oblivious to its potential damage. I would contend that they are not only fully aware of the situation, but deliberately choose these moves because the perceived short term reward out ways the long term risk. In one of the books i am currently reading the crash of 2008 and what it means by George Soros, he refers to this aspect as the theory of reflexivity, where a battle between the cognitive and manipulative mind occurs and investors usually side with the more speculative and risky position therefore exposing themselves to the downside. They are in constant pursuit of what he calls perfect knowledge which few achieve. I think this same theory applies to not only the stock markets worldwide, but is currently at the root of many of the worldwide dilemmas we are witnessing today. For example our government seems quite content with bolstering our debt load to offset the effects of this recession, BP looked away when it was fully aware of the potential catastrophe looming in the Gulf, and this administration as well as others in the past have deregulated our markets so that the derivatives market worldwide is left to spread its systemic damage. But as Thomas Friedman states in his book Hot, Flat, and Crowded that the real game-changer will be Mother Nature herself by imposing such harsh restrictions upon the worlds inhabitants, as the result of our repeated rejection of embracing the renewable energy market today with the same passion as we did with the information technology sector in the past.