Peter Sellers, the Pink Panther, and the credit crunch

the clouseau complex

31Mar08

I’ve been thinking for a while that the Pink Panther films hold some useful lessons (no, really), but not exactly the ones that the Econophysics blog has come up with in a timeless post from late January.

In a virtual way, I have been standing right next to Econophysics blog for nearly a year. Right here, to be precise. But, for all sorts of reasons, I’ve been looking the other way, and it’s about time I offered some acknowledgement. For those who don’t follow finance, let this be a little pointer to someone who knows a lot more about it than I do and can offer up some enviable insights that the Knackered Hack can only really prod bluntly at. So this is a long overdue hat-tip to a blog that can help explain what has been going on, and make some judgements about the politics of it all, and whether the tools of finance have been used wisely or not. It’s also worthy of note that only yesterday Econophysics was listed at economics.alltop.com. I can’t imagine how that might happen; maybe the panther, or the invisible hand, strikes again.

As Clouseau might say: “Monsieur Econophysique iz a critique of ze système yeu kneur…” — the system that delivered us the credit crunch, that is. In this post, he explains how those responsible for the crisis manage to get us to look the other way, to focus on the rogue trader like SocGen’s Jerôme Kerviel for example, while a more sophisticated fraud is being perpetrated. Econophysics characterises this fraud as a hypocritical shrugging of the shoulders by its architects while they simultaneously seek a government bailout on a millennial scale. These same people would scorn support for a social system that might aim to rescue more quotidian personal recklessness or misfortune lower down the social scale. To quote Econophysics:-

What about the politicians that looked the other way when all of this was going on? They weren’t being wined and dined by the Jerome Kerviels of the world nor were they concerned about what would happen to ordinary Joes and Joannes that voted for them when the supposedly non-rogue, but (in some ways) far more crazy financial dealings of those who were wining and dining officials blew up. No, it was the business-world’s equivalents of ‘Sir Charles Lytton’ [David Niven] that did attend the Grandes Ecoles, the Ivy Leagues, etc., that got our leaders and regulators to look the other way.

And looking the other way is at the heart of our crisis. One of the basic tricks of magicians is to use devices that distract the audiences’ attention from what they should be focused in on in order to not get tricked … smoke and mirrors. A good magician knows that human beings are more likely to be interested in the stumbling and bumbling Inspector Clouseau rather than the coldly calculating Phantom.

The mess that we are in is because we believed in a mirage, a possibility suggested in an excellent article by David Leonhardt of the New York Times. Just as Inspector Clouseau repeatedly escaped death by pure dumb luck, we had managed to escape financial disaster (until now that is) by Clouseau-esque good fortune.

I’ve been wanting, for some time, to write about what I’d term “the Clouseau Complex”: Peter Sellers’ depiction of lucky incompetence as brought to life by Inspector Clouseau. For me, Clouseau is the comic epitome of what so many of us know about success and failure: that there are some people who can get themselves into positions of authority and continue to succeed while everyone who comes into contact with them (except their superiors and the general public, perhaps) knows the entirely random route through which their successful results have been achieved. But my real-life examples of the Clouseau Complex will have to wait for another post.