When Is A Black Swan Not A Black Swan ?

Many many years ago, when I was a student and studying history, I had an idea that reading documents was only a part of what should be looked at when studying a group or a nation's history. History professors back then taught that there were primary and secondary sources of information. Newspapers and letters written at the time of events under question are primary sources to the historian. But, I had an idea that works of art, music, literature and styles of clothing etc., said something about a people and their values.

When I look through the Sunday New York Times, I see watches and jewelry and expensive handbags and other items that are advertised. They all try to convey that one can not live the "good life" without these items. So much of our culture is slanted towards the accumulation of wealth. And, the New York Times is not the only place I see this. Take a look through VANITY FAIR magazine and you will see more items being put forward and again the emphasis is on the accumulation of wealth.

I find nothing wrong with people wanting to accumulate wealth, but I do have a problem with people cutting corners to do it.

There is a theory out there called the Black Swan. Before black swans were discovered in western Australia, people only knew of white swans. A black swan became something of an near impossible event occurring. More recently the event of 9-11 and the collapse of the housing market have been referred to as Black Swans. Both of these events were believed to be highly unlikely to happen before they occurred.

But, my question is: when the system is gamed, can the disaster that follows be considered a Black Swan event? I will grant that the terrorist attack of 9-11 is a classic Black Swan event. Who would have predicted that a group of terrorists would use commercial aircraft to carry out a terrorist attack of such a magnitude?

On the other hand, I do not see the collapse of the housing market as quite a Black Swan event. Knowing as I do that the housing bubble was perpetuated by the credit rating agencies willingness to game the system, can the financial crisis that followed really be considered a Black Swan?

Now let us move on to the oil spill in the Gulf of Mexico. When Congress, in their wisdom, placed a cap of $75 million for any accident resulting from an oil spill in the Gulf of Mexico, and BP made a risk calculation that they would rather pay the paltry sum of $75 million than expend the additional expense of following their own oil drilling procedures, can we call such an event a Black Swan? I do not think so. Like any corporation faced with holding down their expenses and driving every invested dollar to maximize its return on investment, can BP be expected to behave in any other manner? Congress, in my opinion, had as much to do with the oil spill in the Gulf of Mexico as BP by virtue of the risk/reward they put in place for BP to deal with.

The corruption in the government agency that is responsible for the oil drilling companies to adhere to the proper care and procedures for drilling in the gulf can hardly be considered a Black Swan event in my opinion. Gaming the system does not make the odds more likely, it simply, to my mind, insures it.

The bottom line is that people need to remember this and vote for representatives that work for the good of all the people and not just the corporations that flood the airwaves with their slick commercials.

Stay tuned.