, I've been giving a lot of thought lately to Black Swan Events (not the Natalie Portman movie). Which got me thinking about the (in)famous Donald Rumsfeld quote from a 2002 Pentagon press conference.
Rumsfeld, Feb. 12 2002,
"Reports that say that something hasn't happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns -- the ones we don't know we don't know. And if one looks throughout the history of our country and other free countries, it is the latter category that tend to be the difficult ones."
I remember seeing the press conference way back when and thinking, at the time, that Sec. Rumsfeld was making a profound point. To this day, people make fun of the quote, as if it were some idiotic blathering.
In fact, it is the unknown unknowns that continue to roil the world. I'll remember this quote, every morning, when I hear on the news that the latest unemployment figure, inflation number, GDP estimate, etc. was "unexpectedly" large, small, etc., compared against "analyst expectations". If the analysts are always off, and always off in a single direction, then why don't they....oh, nevermind.
But what of the unspoken fourth category: the unknown knowns: those things that we are all well aware of, but won't acknowledge or admit to. As I ponder recent events, I am thinking that it is from this fourth category that we have the most to fear.
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