Episode 2048 Scott Adams - Banks, Cartels, CIA Manipulation, Narrative Poisoning, The Success Reframe

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ng anyway. So if you'd like to take this experience up to levels that, I don't know, nobody's ever seen before, well, all you need is a copper mug or a glass or a tall stein, a canteen, your glass, a vessel of any kind. Fill it with your favorite liquid. I like coffee. And join me n

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ow for the unparalleled pleasure of the simultaneous sip. The thing that makes everything better. It's called the simultaneous sip, but it happens now. Go. Sip it. Sip it.

Well, let's talk about all the stories. Would you like to talk about banking? Sorry, I just nodded off there. You know, I was a banker for a number of years. I started my career as a banker. Thought I'd be a big old banker guy. So I know a little bit about banking. A little bit. So let's talk about Silicon Valley Bank.

Here's something I know that people just figured out. I'm not the one person who knew it. You knew it too. But here it is. When the idea of banks was created and then it evolved into modern banking, it was a good design. And one of the things that was good about it is that even if there was something that looked like a banking weakness, communication among people was so slow that unless you saw a line forming in front of the bank, you couldn't tell there was a bank run. So you wouldn't know to get in on it because you wouldn't even know what was happening. So bank runs were naturally, let's say, prevented just by poor communication.

Suddenly you've got Twitter and the internet. Suddenly not only can you instantly tell people there might be a problem, everybody knows at the same time. That's a big problem. But it's worse. They don't even have to go stand in line. They just pull out their app and say, boop, all my money, move it somewhere else. Boop.

So when you have those two things that went from sort of a little bit difficult to do — find out what's happening with your bank, number one, and two, actually go stand in a long line to get your money out — there was a natural slowdown. So we now have a banking system that was created for slow communication and inefficient withdrawals. And then those two things changed. That's a big problem.

So I would say that social media and banking apps that are just more efficient are actually the risk to the system almost as much as bad decisions and poor risk management. The fact that we have two mismatched systems — our communication system is mismatched with our banking system — that has to get fixed. I don't know exactly what the fix is, but there has to be something that's like, maybe I hate to say government regulation, but banks are heavily regulated for a reason. There's a reason to regulate it, right? That's the

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one place you really want some regulation, in my opinion. Yeah, if you're going to get rid of all regulation and get rid of banking, last you want to keep that one around. Not too much regulation, but you want something. So what would we do? Maybe some kind of a government brake. So the brakes just gone. Now, there's an analogy to this whole banking problem that I've been thinking about. Have you…

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Wisdom from this episode

"When the idea of banks was created and then it evolved into modern banking, it was a good design. And one of the things that was good about it is that even if there was something that looked like a banking weakness, communication among people was so slow that unless you saw a line forming in front of the bank, you couldn't tell there was a bank run. So bank runs were naturally prevented just by poor communication."

Early banking systems were well designed because slow communication naturally prevented bank runs—people simply wouldn't know about problems in time to act.

"We now have a banking system that was created for slow communication and inefficient withdrawals. And then those two things changed. That's a big problem. Social media and banking apps that are just more efficient are actually the risk to the system almost as much as bad decisions and poor risk management. The fact that we have two mismatched systems — our communication system is mismatched with our banking system — that has to get fixed."

Banking was built for an era of slow information and physical lines, but instant communication and app transfers created a dangerous mismatch that threatens stability as much as any mismanagement.