george soros on recession &behavoural economics 101

so geo. soros, a man who has several cles, has a new edition of his book on "a new paradigm for financial markets" out - along with lots of other people he is saying "I told you so", although the original publication's date actually gives him provenance / prior art proof that he did so

but is his message so new? not really - basically he says that the model used by economics is flawed because it doesn't account for what he calls "reflexivity" - basically (my interpretation) this is that the idea that there is a "ground truth" to a value for goods/servies doesn't work with financial services since the "ground truth" is based in himan estimates - the humans doing the estimation (who think that laws of supply/demand and game theory based on a) those laws and b) rational selfish players) actually are flawed and unlike traditional goods and services, the financial instruments are all as much of a figment as the supply/demand figures.....

this is philospically a bit like Heisenberg (the observer perturbs the system so the observed value may not be what they thought) but is extremely familiar to psychology researchers (and therefore to peopel who do behavoural economics) since it is encountered daily in their experiments (tell a human that they are a subject, and they modify their behaviour - surprise - this is know to GPs who offer a DIY blood pressure test in the UK - some patients systematically produce a very high reading even when perfectly well - known as the "White Coat" reading, as their presure is raised by being in the doctors practice and about to see their GP...)

anyhow, the book is a good read for people that want to understand

meanwhle, I wish I lieved in a high tax country like sweden, finland or switzerland where they seem to have industry and be weathering the storm ok, and not everyone leaves the country at the drop of a hat - some sort of patriotism can be good (e.g. based in love of the culture and place one is from) and is not conditional....
and some industry (e.g. volvo, saab, nokia) doesn't seem to walk away from being created in countries which believe in progressive taxation and social servies.