It was once taken for granted that all swans were invariably, uniformly, unfailingly white. When Europeans "discovered" Australia, however, they also discovered black swans. Today the term "black swan" is used for an event that blasts apart the boundaries of received knowledge and rational expectation.
Kevin Phillips, who has made the circuitous journey from Reagan strategist to economic populist, challenges us to discern the black swan on the economic horizon. In "Bad Money" (scheduled for 4/15 publication), Phillips suggests that the financial services sector, responsible for some 40% of economic growth and employment during the Bush presidency, as presently constituted is a WMD that ultimately will demolish not only itself but the fundamental economic parameters to which we are accustomed. The new economic America that will reluctantly emerge is likely to have vastly different expectations and structure.
(Have you come across the term "neutron loan" in the financial press? Like a neutron bomb, a neutron loan destroys the people and leaves the houses standing.)
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