The naivete of which she accuses Silver is that Silver assumes that the modelers are striving for accuracy in their models (and that they failed to achieve accuracy). With some linked evidence, she asserts that the modelers in the financial industry knew that their models were inaccurate, but that those models supported the corrupt narrative that enriched them, and so perpetuated them. In other words, in the finance world (she says, with some apparent understanding and evidence) the wilfully inaccurate models were a means to a corrupt end.
The fundamental problem she sees is that incentives in the financial industry are not aligned with accurate models, that inaccurate models were deliberately used to further short-term performance at the expense of further inflating the bubble.
"most of the misallocation of capital was done by firms doing things like trusting AAA rated securities"
On this, she links to specific evidence that the "trust" they were exercising was knowingly misplaced because the incentive was always to get the next big bonus.
Until any contrary evidence, all Government is corrupt by definition (and yes, I call lobby-led politics "corruption"). In a true and free market "finance" is not corrupt, if you can't pay your debts you're out of it, this has been true since this industry was first invented by the Italians around the 1300-1400s.
In this latest crisis the problem was that the financial market was mostly led by Government-mandated decisions, starting with the Bear Stearns rescue in early 2008.
Like they say, money has no smell. Anyway, it's a very long discussion :)
What can I say? To each his own. I did not say that you, jeremyarussell, or any specific person taken "per se" needs a higher thingie to stop him/her from committing any crimes, it's just that for example the 20th century has been marked by some of the most heinous crimes in our existence as a species while in the same time only a small percentage of our fellow humans are psychopathic or sociopaths or however else you want to call those who commit crimes for pleasure only. Somehow, to make up for the difference (in the "people killed vs. natural-born-killers" ratio), I believe that we have somehow to look deeper into ourselves. Also pls. see this: https://en.wikipedia.org/wiki/Banality_of_evil.
And now that I'm reminded of Hannah Arrendt and the crimes of the 20th century, and for once to make a documented reference to Godwin's law on the internets (and to give people real reasons for down-votes), there's this little photo right here (http://imgur.com/PfM0e) of the Tiraspol (https://en.wikipedia.org/wiki/Tiraspol) train-station taken during WW2 by a German soldier. I paid around 0.50 euro-cents for the photo in an antiques shop (I live in Eastern Europe), around with other photos taken by the same soldier on the top of Eiffel Tower in occupied Paris or on the shores of the Aegean in Thessaloniki.
Now, those train tracks that you see in the photo at first don't signify anything by themselves, what with the peasant women waiting patiently for the next train or what-have-you. But if you happen to know (like for example I do) that tens of thousands (if not hundreds of thousands) of Romanian Jews (Romania being the country where I grew up and currently live in) were carried in trains to their final destination to close-by Transnistria (http://isurvived.org/Transnistria.html) then you begin to see things differently.
It took my country's Government close to 60 years to finally starting to acknowledge that we actually did exterminate people in Transnistria. Up until not that long ago there still was a statue of Ion Antonescu (https://en.wikipedia.org/wiki/Ion_Antonescu), the guy who ruled this country when all these, let's say really bad things happened, in a church's front-yard a couple of metro stations from where I'm now writing this comment. In fact, if I were to take the tramway to work tomorrow instead of the metro I would pass right by the said church (no statue of him now), which Antonescu actually helped build (the church, that is). Do you honestly think that church-building Ion Antonescu thought of himself as being a bad person?
And this is one of the many reasons why I think Governments do not deserve our trust.
Sorry for the long rant, now I can go to sleep :)
No worries about rants, I like reading them and trying to get myself to not just see another's point of view, but to own it, try and make it mine and get an even deeper sense of what's going on behind the words. And sleep well.
[[Call me “asinine,” but I have less faith in the experts than Nate Silver: I don’t want to trust the very people who got us into this mess, while benefitting from it, to also be in charge of cleaning it up. And, being part of the Occupy movement, I obviously think that this is the time for mass movements.]]
Ahhh, so she was part of the Occupy movement and comes from the world-view that the financial system and government is corrupt. She should have said that up front. Makes what she is saying make more sense.
Nate Silver doesn't believe those things, and so that largely explains why they come to different conclusions.