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The key message is you need volatility, you need stressors in the system, and you need companies and you need markets who can survive those stressors and thrive by them. Exactly. We need to encourage people to take certain classes of risk. We need more small fluctuation and fewer big crises. In fact we have the exact opposite. Things are smooth but with big — very quickly.
Remember the first one is the economy, don’t mistake the economy — the economy is more like a cat than a washing machine. The second rule is small is beautiful because it is less fragile. decentralize that small. Third rule is skin in a game to make sure that nobody’s antifragile at the expense of others. And a fourth rule … make sure that bailouts help individuals, not companies.
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