Devising an early warning system that won’t be ignored

Just taking a Sunday stroll through this week’s magazines, and thought I’d flag up the Economist’s special report on the future of finance.  Plenty of worthwhile stuff in there – but this passage on how, historically, early warning systems have been ignored jumped out at me:

“Some would seek to limit the ebb and flow of confidence with early warnings, as if financial busts were a hurricane or an outbreak of plague. Gordon Brown, Britain’s prime minister, would like to see the IMF cast in that role.

History suggests that such schemes do not work. People enjoy booms. Walter Bagehot, an editor of The Economist in the 19th century, observed that “all people are most credulous when they are most happy.” Whatever Mr Brown says now, politicians like booms too. As chancellor of the exchequer, if the IMF dared criticise the British economy he used to be dismissive.