The OECD is working to reform the system, but to what degree can it reform thinking? As the economic horizon brightens, if only faintly, there is a growing tendency to believe that the crisis was simply the result of a few missteps, caused by bad judgement, not bad philosophy. Short-term thinking seems inextricably bound to short-term memory. There are already signs of amnesia. The biggest banks in the US are scrambling to pay off their second round of bail outs so that CEOs and traders can continue to collect their enormous bonuses, on the argument that without these bonuses talent will go elsewhere. It may, or it may not, but such assurances practically guarantee reckless behaviour, as top talent rarely pays the price.

The danger is that policymakers will eventually be persuaded that there is nothing fundamentally wrong with the system, and that with "better judgement" and "sharper traders" similar calamities will be avoided. The sound of popping bubbles is only in your ears. There is a theory in physics that our universe is only one of many, connected to the others, like those balloons that clowns twist into animals at children's birthday parties. The theory suggests something about market bubbles.

Whether in real estate, dotcoms or tulips, bubbles share a disturbing characteristic. Once we find ourselves in one, memory of all the others vanishes. Moreoever, once a particular kind of thinking is given official sanction, it is extremely difficult to change.

Robert James Thompson Paris, France

observer@oecd.org

©OECD Observer No 273, June 2009