The editor of the Financial Times was once asked to explain, in layman’s terms, how it was that the banks and financial institutions all made the same mistakes and ended up following each other into perdition. This was his explanation:
The Navajo Indians on the huge reservation consulted their medicine man, saying “How hard is the forthcoming winter going to be? We need to know how much wood to gather to keep us warm”.
The shaman said he would go to the top of the hill to commune with the spirits, but he ensured that he took his cell phone with him. Once there, he rang the weather station, but was told that long-term forecasts were unreliable and they really didn’t know. “Then let me speak to your boss”, he said, “because I cannot lose face in front of my people”. This was done, and the boss, not knowing who he was, made an inspired guess that it would be cold.
The shaman told his people that the spirits had foretold a cold winter, and they spent some time gathering a lot of wood. They then went back to their chief and asked if what they had gathered would be enough. He went off to “commune” again, and rang the weather station’s boss direct. “Just how cold is the winter going to be?” The boss, not wishing to backtrack, told him it would be pretty bad. This information was duly conveyed to the tribe, who spent many more days gathering huge stocks of wood. Again they came back to the medicine man and asked if it would be enough.
Again he went to the top of the hill; again he rang the weather station boss, and again he asked for more information. This time the answer was more forthright. “It’s going to be a really hard winter, with very cold weather; the worst for years”. “Thank you”, said the chief, “I’m grateful. Incidentally, how do you know for certain?”
“Easy”, came the reply; “Those Navajos have spent days stockpiling wood!”