A fine post by Guido, quoting Warren Buffet back in 2002:

When Charlie and I finish reading the long footnotes detailing the derivatives activities of major banks, the only thing we understand is that we don’t understand how much risk the institution is running.

And if you can’t understand that, then the whole basis of capitalist judgement – namely weighing rival costs and benefits judiciously with an eye to maximising competitive advantage now and in the future – is rendered impossible.

Mind you, at least one politician seems to have had some prescience. But his legislative attempt to try to fix a growing problem did not get far.

Amidst the tsunamis of words being emitted about this vasty financial drama, some simple messages make the most sense:

There are two ways to reduce the connection between politicians and money. One is to reduce the role of money. The other is to reduce the role of politicians.

I choose the latter. I contend that reducing the role of money of politics in order to make politics more honest is like trying to make airplanes safer by reducing the role of gravity.

What politicians can do is ensure that the rules and context provide for thorough transparency, so that we all can do our best to understand what is happening when we pay over our money to some or other financial institution. Knowledge underpins discipline.

Meanwhile poor Polly is railing against Ayn Rand:

Gordon Brown’s stewardship of the Treasury over the past decade is now under scrutiny. He followed Alan Greenspan, worshipper at the feet of Ayn Rand, a free marketeer whose extreme and influential libertarianism let markets rip, kept interest rates too low and failed to regulate the banks’ wild lending.

Greenspan of course was favoured by Republicans and Democrats alike over a long period of expansion for the world economy.

But has Polly actually read Atlas Shrugged?

If she did, she would fine that the libertarian philosphy of its hero John Galt and heroine Dagny Taggart is founded squarely in personal responsibility and self-discipline of the highest order.

The fact that Governments, high-paid financiers and even journalists don’t always live up to those noble standards is not Ayn Rand’s fault.

Luckily all those sick of McCain and Obama alike have another winning option.