Daily Archives: Jun 4, 2022 at 01:01 am EDT

Book Bits: 4 June 2022

Direct: The Rise of the Middleman Economy and the Power of Going to the Source
Kathryn Judge
Review via The Economist
In 2011 there was an outbreak of E. coli in Germany. Thousands of people fell ill. The authorities suspected that salad ingredients were to blame, but did not know which ones were contaminated with the bacteria. Their initial guess was Spanish cucumbers—and so European consumers avoided that country’s fresh produce. Only later did the authorities find that salad sprouts grown in Germany were to blame.
The reason for the confusion, argues Kathryn Judge, a professor at Columbia Law School, was the complex supply chains that have developed in the global economy. It is not easy for regulators, let alone consumers, to know where goods come from. She draws a parallel with the subprime-mortgage crisis of 2007: loans had been repackaged so many times that investors were far from sure which financial products, and which banks, were safe. So they avoided them all, thereby exacerbating the panic.

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