The ‘Mud Angel’ Fallacy: Why Financial Heroics Mask the Real Risks
In November 1966, the Arno River in Florence, Italy, burst its banks, unleashing a torrent of mud and water that submerged the heart of the Renaissance. As the waters receded, a different kind of wave emerged: thousands of young volunteers from around the world. Dubbed the “Angeli del Fango” or “Mud Angels,” they waded through the devastation to salvage priceless works of art and ancient manuscripts. Their story is one of inspiring heroism, a testament to the human spirit in the face of catastrophe.
Yet, as a poignant letter to the Financial Times reminds us, this celebration of salvage heroics obscures a more troubling reality: the disaster itself was a preventable failure of infrastructure and foresight. The warnings were ignored, the defenses were inadequate. The heroes were only necessary because the guardians had failed.
This dynamic, which we can call the “Mud Angel Fallacy,” is a powerful and dangerous pattern that repeats itself constantly in the modern global economy. We lionize the central bankers who “save” the stock market with last-minute interventions and celebrate the “turnaround” CEOs who rescue companies from the brink of collapse. But in doing so, we distract from the systemic rot, poor governance, and ignored warnings that made such dramatic rescues necessary in the first place. For investors, business leaders, and anyone involved in finance, understanding this fallacy is crucial to building genuine, lasting resilience rather than simply waiting for the next flood.
The Anatomy of a Financial Flood
The parallels between the Florence flood and modern financial crises are striking. The slow,
