RE: Food Shortages, Rising Prices, Stagnant Wages: Welcome to the 13th Century (June 23, 2008):
This isn't original to me. The idea is that you don't control systems with positive feedback. The way it should work is that the feedback is negative. When the machine goes too fast, you tell it to slow down. When it goes too slow, you tell it to speed up.

The economy on the other hand, works via positive feedback. When things are going well, people invest more, spend more, borrow more. That creates more economic activity, everyone seems to get getting richer, and so they push even harder. When that finally peaks, for whatever random reason (wars, droughts, some sudden panic, etc.) it all goes into reverse.

There are the usual financial and budgetary reasons, of course. Lender/investor leverage reverses, states cut their budget with a drop in revenues, consumers cut their spending for the same reason. That all results in unemployment, which further cuts spending. But on top of that, there's the feedback cycle. As things get worse, people assume they are going to get even worse in the future, and pull back, more than they would have to do due to changed circumstances. In place of a boom, you get a crash. Only when things have been bad long enough (but not getting any worse) does activity start to pick up again.

This produces an up and down cycle in the economy. I'm not saying anything you haven't heard here in other terms. The Fed is encouraged to "take the punch bowl away just as the part gets started" -- to act against the cycle. In a Keynesian world, governments are supposed to spend during recessions and cut back during booms. Unfortunately, the entire psychology of the system is against this, and so it never happens that way.

I don't even think this is particular to economics or to human beings. When there's good weather, all the little squirrels and mice survive and you get a population explosion. With all the rodents, all the hawk and eagle chicks survive, and you get more predators. It all continues until the weather changes again. Then you have too many rodents and they compete one another into starvation. With all the prey dead, so goes the predators. And so even natural populations are continually booming and crashing. We're no different.

With all due respect to economic historians (and I haven't read the book you cite), it's very, very easy to retroactively find correlations that seem to explain it all. Overlay that with the usual moral scolding, and you can make a case. I doubt it's anything so specific to our economic policies, to historical cycles, or moral decline. It's just a system run by positive feedback, which will inevitably wobble through extremes.

I wonder how much Obama will be able to change. Washington has seized up like an engine without oil. The republican spin machine is already in full stride talking about how the stock market will crash should Obama win. The same spin machine will be working overtime to get back the White House in four years. Hard core lefties think the answer is to hand out money like candy but keep forgetting that we are broke. The radical right wants to launch wars of aggression to steal what is not ours because our way of life is non-negotiable but keep forgetting we are broke. Consumers want to consume like there is no tomorrow but can no longer ignore that they are broke. As our wants and reality collide there is paralysis.

Power makes people do strange things, in this case the strange thing is nothing.

Enjoyed your meta-beneath-the-bonnet moment. it does all seem to come down to tribes. they are the one absolutely impossible-to-escape entity. they dog the u.n. peace keepers, and other bringers-of-light in every part of the world. most of these tribes do seem to own lots of ak47s. i have looked about me here in maine and wondered what my tribe will be. i agree that they will emerge. we joined mofga, the oldest organization in the country for organic living, and in surveying what their network looks like maine comes off as a very sane place. redneck to a large part, but also a lot of industrious hippy-types raising goats and crops. a very interesting place. the watchword seems to be 'lisa'; low impact sustainable agriculture. it really is amazing how big the movement to grow local food without chemicals is in this state. my hope, slightly tongue in cheek, is that new hampster, vermont and maine will break off into a new nation with a regional gov't. that looks more toward canada than south. course it may take a few of those pandemics to set the stage. we will get loose about the time that n.w. state - jeffersonia is it?, gets independence.

I like your post today. ( Under the Hood of Jim Kunstler's World Made by Hand (June 24, 2008) It is sad though, people seem to really got off on the negative stuff. I wrote that thing about blue collar people, and it was negative and not very happy. And it got put on the peak oil forum and got tons of comments. A lot of them bad, but I've noticed that if you do get comments on the internet those are problably the ones you'll get. I write something positive and a couple of people pop up. It is easy to complain though on the internet, all you need is internet access and usable fingers. Going out and doing something requires the use of ones arms and legs.

It is like I see so many kids now in their house all day playing video games, my parents/co-workers who sit all day watching television. It just makes me sick in the stomach, thinking that we raped the world of its resources, cause the extinction of so many animals, so many great minds have worked so hard to build this world, and the end result are people spending their income tax checks which are meant for their children on big screen televisions and video game systems. One day I realized that technology didn't make life better, but provides the ability to be mind-boggling lazy.