Economist Andrew Lo on ‘Existential Vertigo’

Paul Solman: MIT economist Andrew Lo, who beyond guest-blogging his favorite recent economics book here on Making Sense this week, appears on Friday’s NewsHour, discussing how human frailty and bad decision-making factored into the financial crisis.

I would argue that regulation protects people from themselves and the Federal Reserve and other regulatory organizations are really there to help us deal with human frailties, human behavior coupled with technology.

At the end of the discussion, we spoke with Lo about a different — but interestingly, related — topic: Buddhism, faith, and what insights they hold for financial regulation. You will see a bit of the discussion on the NewsHour Friday, but we continue it here with Lo’s take on why religion is an important component of being human from an evolutionary psychology standpoint.