Indeed, perhaps the most damaging aspect of all of our wonderful technology is that it enables us to live blissfully apart from those with whom we disagree. Our access to news can be tailored to our preconceived opinions.

So, while global markets arguably have been rationally complacent, financial contagion cannot be ruled out. A century ago, financial markets priced in a very low probability that a major conflict would occur, blissfully ignoring the risks that led to World War I until late in the summer of 1914.

In Japan, the isolationist temptation is expressed in the current nostalgia for the Edo period, from 1600 to 1868, before Emperor Meiji opened Japan to the world. Back to Edo has become a dominant mood and theme in public debates, promoted by writers, pundits, and historians like Inose Naoki (who is also Vice Governor of Tokyo), who argue that the Japanese were much happier within their closed world, blissfully insulated from the quest for material success and international status.