I'd like to suggest my own contribution from the Buiter archives. In September 2007, Buiter took issue with what he characterized as then-Financial Times columnist Larry Summers' "never seen a potential bail out he did not like" predilection in a blog post titled "Support Markets, Not Banks."

I cannot think of a single financial institution that is too big to fail, in the sense that it would damage some systemically important social institution.... I recognize the upside of bail-outs for those who arrange them: they look like movers and shakers, making and shaping events. It's heroic, in an industry where heroism can be rarely displayed. But in all of the examples mentioned above, the bail-out did more harm than good.

So now Buiter will be taking a paycheck from one of the very biggest of the bailed-out too-big-to-fail institutions. Which means, whether he likes it or not, Buiter is being bankrolled with the support of the American taxpayer... and implicit backing of Larry Summers. If Citigroup hadn't been bailed out, would Buiter have gotten this job?

But so far this Monday morning, investor reactions appear more muted than the worst-case scenarios would justify.

How seriously we should take this momentary calm is unknowable at this juncture. Sometimes economic disasters occur in slow-motion, and at this point, nobody would be surprised if Dubai's woes incited a chain of events -- sovereign debt defaults across the planet -- that short-circuited the fledgling global economic recovery. But Paul Krugman and Willem Buiter, neither of whom are ever shy at warning about impending chaos, are both complacent about Dubai World's "intrinsic" significance. Buiter's two posts, here, and here, are particularly worth reading.

Buiter's fundamental observation -- that Dubai World is essentially a commercial real estate developer that overextended itself, and commercial real estate developers are notoriously prone to bankruptcy during recessions -- is compelling. As Buiter writes, Dubai engaged in "the craziest construction boom seen in the Middle East since the construction of the Great Pyramids." One of Dubai World's key subsidiaries, the property developer Nakheel "was at the acme of property development pushed to excess, competing with God, nature and the Netherlands by constructing islands, which it hoped to sell to gormless rock stars and European football geniuses."

For years the financial press doted on stories of Dubai's extravagant excess as symbolic proof that the center of the world economy was migrating to the Gulf. But the real symbolism should have been much more obvious. Excess is a bubble waiting to pop. And stubborn hubris is not a sound investment strategy.

Which brings us to the Lehman Brothers comparison. As many have noted, when Lehman declared bankruptcy, it had liabilities of over $600 billion, which makes Dubai World's $59 billion worth of debt seem relatively insignificant. But symbolically speaking, there are interesting parallels. The millstone around Lehman Brother's neck was bad real estate investments. Not just stupid subprime mortgage security bets, but also actual massively unwarranted investments in real estate developments -- precisely the kind of stuff that gets hammered during an economic downturn.

As is documented in the various accounts of Lehman's fall that have been trickling out all year -- most notably Joseph Tibman's "The Murder of Lehman Brothers" and Andrew Ross Sorkin's "Too Big To Fail" -- Lehman's executives, in particular CEO Dick Fuld, refused to recognize the extent of their liabilities, and waited too long to seek a way out. Possibly the most important reason why Lehman was eventually forced to declare bankruptcy is that Fuld had earlier resisted selling off all or a portion of Lehman at a price he believed to be too low. In other words, Lehman's demise was its own fault.

The same seems to be true of Dubai World. The crash in Dubai's economy has been apparent for many months, but Dubai's ruler, Sheikh Mohamed bin Rashid al-Maktoum, did a pretty good Dick Fuld imitation, and refuse to ask for help or admit reality until it was too late.

As theorized in the Financial Times:

Why so long? Because the proud Sheikh Mohammed, it seems, was reluctant to be bailed out by his richer neighbor, possibly fearing it would put a damper on Dubai's image and constrain its independence. Nor was he willing to part with some of Dubai's crown jewels at distressed prices. Some people suspect that it is the same dogged resistance that has landed Dubai in this week's mess.

The lesson? The complexities involved in modern finance sometimes make what is going on seem inscrutable and hard to understand. Economists consequently argue endlessly about the real causes of the global financial crash in language that they layman has a difficult time deciphering. But when you look more closely at the flashpoints of disaster, whether in Dubai or in New York, the real problems seem to be caused by bad decisions by stubborn executives, whether blinded by greed or stupidity or the satisfaction of excess.

Pierrehumbert, who made news just a few weeks ago with an "Open Letter to Steve Levitt" that eviscerated the SuperFreakonomics co-author for some rank stupidity on the topic of solar panels, has a point. I'm sure I don't want anyone breaking into my home computer network and posting all my private e-mails and documents for the world to see. It would be an embarrassing invasion of privacy.

But in the context of the political battle over climate change, Pierrehumbert is making the wrong point. Who cares? The only meaningful response to this crisis is to get out in front, explain the context of each and every e-mail, and address forthrightly whatever improprieties may or may not exist. Because there may well be more to come.  The Competitive Enterprise Institute just announced that it is suing NASA for what it calls a "failure to respond" to Freedom of Information requests that it has filed attempting to gain access to e-mail discussions conducted by U.S. government climate researchers.  Republican legislators are already opening up investigations into whether the climate change e-mails prove a conspiracy to fudge global warming data or exclude outsider viewpoints from peer-reviewed journals.

We will be living with the content of these e-mails for the foreseeable future, whether or not anyone gets prosecuted and/or convicted of breaking into government property. You better believe that if Republicans retake the House or Senate any time soon, we will see the likes of Sen. James Inhofe or Rep. Jim Barton waving their printouts in front of cherry-picked witnesses and declaiming about how this brouhaha proves once and for all that global warming is a hoax.

Of course, they do nothing of the sort, but in politics, the truth is less important than the perception of the truth. Whining about invasions of privacy isn't going to help. Energy analyst Geoffrey Styles gets at the heart of it in a post he published today, "Do Leaked E-mails Undermine the Scientific Consensus?"

Anyone who has spent five minutes peering behind the veil of academic politics wouldn't be terribly surprised at some of the caustic, small-minded, and downright vindictive comments that pepper the... e-mails that have turned up around the Internet. Nevertheless, most of us aren't involved in work that is integral to a global effort to understand and avert the worst outcomes of something on the scale of climate change. These folks are expected to hold themselves to a higher standard, and if they don't, it jeopardizes not just their own reputations but the public's perception of the findings of the larger body of climate science. When I read an e-mail in which one noted climate researcher asks another not to refer to a particular subject in his reply, but just say yes or no, or another indicating the author would delete some data points from a graph showing a recent change in the trend, I'm reminded of some precautionary advice I received at the very beginning of my oil trading career: "Avoid even the appearance of evil."

The basic issue here that many of those responding from the climate change community seem unable or unwilling to grasp is that their real problem is not how particular individuals or groups might exploit this information, but how the information itself could undermine the faith of the public in the integrity of climate science. I use the word faith deliberately, because for most of us it boils down to that. The number of people actually equipped to read the scientific papers in question and ascertain whether the manipulation of charts and data implicated in some of the leaked e-mails is serious or not is vanishingly small, compared to the much larger number of us who must simply take it on faith that the scientists studying the climate and reporting on alarming changes in it are behaving in a fair, transparent, and unself-interested way, to the greatest extent humanly possible. It would be hard for most of us to read the e-mails in question objectively and not have that faith shaken, at least a bit.

My own faith in climate science hasn't been shaken by this episode, but I'm pretty dumfounded at behavior that hands what Pierrehumbert calls the "inactivists" -- many of whom are working as fronts for the energy industry -- a big stick to clobber me with. Please don't hide behind invasion of privacy. It's only going to get hotter from here on out.

And there's nothing we can do about it.

Based on melting arctic ice and other evidence, it is clear that global warming has begun and existing concentrations of greenhouse gases in the atmosphere will lead to further temperature increases. The timing of the global peak of oil production is less certain, although there is a growing view that maximum production will occur within the next decade. Global climate change and the global peak of oil production will undermine the economic logic and profitability of long-distance, global supply chains of imports and exports. They will lead to a condition of peak globalization, after which the volume of goods traded internationally (measured by ton-miles of freight) will decline. While policies designed to reduce oil depletion and greenhouse gas emissions may work to delay the onset of peak globalization, it is the conclusion of this paper that they will be unable to prevent it.

Curtis doesn't come out and say so directly, but given the fact that his paper appeared in the journal "Ecological Economics" and ecological economists, as a rule, tend to take a dim view of globalization and its assorted capitalist depredations against the environment, one assumes that he's not all that unhappy about the prospect of relocalization. When Curtis writes that "The economic logic of the comparative advantage of global supply chains will be overcome by both increasing transportation costs and interruptions and delays in the transit of freight," he doesn't sound too broken up about it.

But there are some fairly mighty assumptions in his opening paragraph, not least being the imminence of peak oil, the certainty of catastrophic climate change, and human inability to do anything meaningful about either or both of these threats. Additionally, Curtis sees climate change and peak oil working in concert -- but they could just as easily work at cross-purposes.

For example, we've already seen rising oil prices contribute to a global recession, which, in large parts of the world, has led to drastic reductions in greenhouse gas emissions. The economic impact of peak oil, in that sense, may actually postpone, or delay global warming.

There's also an implied presupposition that technological innovation has, for all intents and purposes, stopped. As energy prices climb, not only won't we find new, renewable cost-effective sources of energy, but we also won't devise more efficient ways to use what we've got -- freighters and airplanes that consume less fuel, for example. Curtis believes that "Offsetting technologies and policies are very unlikely to be implemented in sufficient magnitude or with sufficient promptness to counter peak globalization."

He could be right. The hitherto unstoppable advance of the Industrial Revolution could be reaching its high point right now. Curtis doesn't prove this will happen in his paper so much as he lays out the "pathways" that could lead us there. But whether wrong or right, the fascinating thing is that the answer to the question could well be provided during our lifetimes.

If Rupert Murdoch can get enough cash from Microsoft to compensate for what his media properties would lose in advertising dollars by cutting off the flow of Google-directed traffic, then maybe the deal makes business sense for him. But it seems to me that the move would also be a bonanza for any major news organization that does not close off its content to Google -- like, say, Bloomberg, or Reuters, or the New York Times.

Because for a plan like this to work, real scarcity must be created. As information consumers, people like me would go to Google, search for something, not find it, and then go to Bing. Or, ideally, from the newspaper industry point of view, we would sign up for paid access. But there's no way this can be pulled off if just a few major publishers ask Google to stop indexing their sites. It will require a preponderance. Maybe Microsoft has enough cash to pay the entire media industry to pull out of Google, but I somehow doubt it.

For the plan to work, it will also require that the vast, endlessly proliferating ecology of Internet filters, such as the millions of bloggers or tweeters or Facebook posters who recommend or summarize news stories, are eradicated from the Net. When searching for news, I'd rather find the original Associated Press article breaking a story, but in a pinch I will settle for a summary. The pathways in which information flows on the Internet are near infinite, and until now, have always been expanding in size and scope. I have paid subscriptions to the Financial Times and the Wall Street Journal, but I rarely have time to sit down and devour the daily publications from "front" to "back." I depend on a network of my own Internet filters to tell me what is important or newsworthy -- without them, there is simply too much out there for me to comprehend or absorb.

Microsoft and News Corp want to solve my information overload problem by cutting off the firehose. This reminds one of nothing so much as King Canute attempting to turn back the tide (and yes, I know, he was really just trying to demonstrate God's infinite power as opposed to his puny mortal abilities). In other words, for Bing to dethrone Google or News Corp. to reverse the trend of declining newspaper circulation requires the outright reversal of history. Since at least the mid-'90s, the end users and consumers of information have lived in an environment where every single day offered us more -- more choices, more information, more content of all kinds. Let us recall, newspapers didn't make their content freely available on the Web because they were forced to by Google or anyone else -- they did it because anyone with a brain could see that's where the readers were going. We led -- they followed! They had no choice if they wanted to remain relevant. Readers now have such a bewildering infinity of choices upon which to devote their attention spans that one has to offer a really, really compelling service to make them pay for something.

Perhaps a duel between Google and Microsoft, in which both offer escalating sums of money to newspapers in a grab for searchable content, will be good for publishers, and make up for the decline in classified revenues and the broken monopolies on physical-location-based news provision. But fundamentally, what Microsoft and all the other newspapers looking to retreat from the free Web are banking on is that they can profit by reducing our access to information. Good luck with that.