In the ongoing debate about the impact that studies of public ignorance should have on the study of culture, Mark Fenster and Bret Chandler assume that wider political participation must be our goal, because, to them, political ignorance is a culturally imposed, and therefore removable, obstacle—as if, without the baleful influence of culture, political participants would be well informed. Culture is indeed a primary influence on people's political opinions, so political scientists should indeed study the role it plays in the (...) formation of political beliefs. But such studies should begin with ignorance as people's default position, and should refrain from assuming that the source of ignorance is cultural domination or manipulation. (shrink)

In the ongoing debate about the impact that studies of public ignorance should have on the study of culture, Mark Fenster and Bret Chandler assume that wider political participation must be our goal, because, to them, political ignorance is a culturally imposed, and therefore removable, obstacle—as if, without the baleful influence of culture, political participants would be well informed. Culture is indeed a primary influence on people's political opinions, so political scientists should indeed study the role it plays in the (...) formation of political beliefs. But such studies should begin with ignorance as people's default position, and should refrain from assuming that the source of ignorance is cultural domination or manipulation. (shrink)

ABSTRACT The illusion of explanatory depth, which has been identified by cognitive psychologists, may play a prominent role in encouraging regulatory action. This special type of overconfidence would logically lead regulators to believe that they are aware of the relevant causes and consequences of the activities they might regulate, and of the unintended side effects of the regulatory actions they are contemplating. So, as with other cognitive biases, the illusion of explanatory depth is likely to lead to mistakes. And unlike (...) the biases that have been the focus of so much behavioral economics, the illusion of explanatory depth is uniquely resistant to correction by those who are aware of it as a general problem and rigorously attempt to keep it under control. (shrink)

In Free Market Fairness, John Tomasi defends classical-liberal principles not because of real-world considerations but on ideal-theoretic grounds. However, what constitutes a sufficiently “ideal” ideal theory is debatable since, as Tomasi shows, regimes that range from laissez faire to heavily interventionist can all be classified as legitimate from the perspective of ideal theory. Conversely, if ideal theory can allow for realistic constraints, as Rawls does, then we should recognize that even under ideal-theoretic conditions, political actors face logistical, epistemic, and motivational (...) challenges that only intensify in the real world, where questions of feasibility become paramount. (shrink)

ABSTRACT Capital regulations stemming from the Basel accords created incentives for banks to securitize mortgages, even risky ones; hold them at a correspondingly low Basel risk weight; or shift them off of banks' balance sheets to obtain even greater leverage. Securitization was praised by economists and regulators for dispersing risks to investors across the world, providing greater resilience to the financial system. However, since in reality banks tended to hold onto securitized assets—either on their balance sheets or off of them, (...) in off‐balance‐sheet entities—the accumulated credit risk remained with the banks, especially in the “shadow banking sector.” This explains the heightened vulnerability of the financial system to a sudden collapse. (shrink)

ABSTRACT The financial crisis was caused by the complex, constantly growing web of regulations designed to constrain and redirect modern capitalism. This complexity made investors, bankers, and perhaps regulators themselves ignorant of regulations promulgated across decades and in different “fields” of regulation. These regulations interacted with each other to foster the issuance and securitization of subprime mortgages; their rating as AA or AAA; and previously their concentration on the balance sheets (and off the balance sheets) of many commercial and investment (...) banks. As a practical matter, it was impossible to predict the disastrous outcome of these interacting regulations. This fact calls into question the feasibility of the century‐old attempt to create a hybrid capitalism in which regulations are supposed to remedy economic problems as they arise. (shrink)