Electric cars

Yes, which is why it's disappointing that nobody seems to be discussing damping mechanisms, or anything else that will improve the markets or the economy in the long term.

John

No, just make 'em pointy on the front and smooth underneath, that's good enough. Squared-off boxes are a serious drag.

Ditto outboard mirrors, but less so.

Cheers, James Arthur

Good point. The main damping mechanism ensuring stability against upward mania is fear: fear of losing your investment.

That mechanism is currently being nulled out on an historic scale, with a rush for more. That's bad. Long-term and short.

James Arthur

With no available credit, we're heading into a depression.

It will, however, be labeled as "W's fault", so the Dems don't care, the graft will be successfully distributed to the faithful (*)

(*) The "faithful" are NOT the public

...Jim Thompson

message

in

republicans

was

congresses

oscillator.

Damping mechanism are applied such as interest rates and taxing polices. But they can only go so far. Right now we are fresh out of interest rates, but there is still some give in taxes. But, taxes should not be lowered during times of up swing as was done essentially taking the damping off.

Since the system is unstable, application of stimulus, damping and other corrections must be judiciously applied as required to smooth the system. response. Which is to say what is needed today is not what will be needed tomorrow. Unfortunately most politicians of all stripes get in ruts and think their philosophy always applies. That thinking exacerbates the instabilities often making things worse than they might otherwise be.

Right now we need stimulus that crates jobs. But it is inevitable that the resultant spending will create inflation. The trick will be to modulate it in such a way that it works but is not over done.

competition.

Yes, that is one loop in the system. However, there are 100 other loops, many with positive feedback and all with time delays. That creates an unstable oscillatory system the closest analog being a chaotic oscillator, look it up. All you have to do is look at the results of boom and bust cycles, panics, recessions, the great depression, boom times and bubbles to see that it is wildly oscillatory. What are you blind?

That was the problem. Writing too many checks wrecked our balances. Now we're just hoping for some change.

James Arthur

The problem is that greed has a slower time constant than fear, and nobody has sufficient long-term memory. So, every generation, more or less, we get a slow greed-driven ramp up to unrealistic valuations, and an inevitable fast ramp down when the smart money figures they've got all they can, or some other event trips the crash. It's a relaxation oscillator.

Tax policy could help here. Or control theory, even. Find me a politician who understands control theory.

John

You are, I think, talking about active macroeconomic interventions to damp the loop. That's unlikely to work, and certainly won't work forever, because politics will screw it up. Better would be long-term policies that damp things at the individual transaction level. Like high taxes on short-term investments, even for non-profits and pension funds. Or transaction fees. Or prohibiting the bundling and resale of mortgages. Things like that, things that will work automatically in the background.

The stimulus is just more borrowing with funny money, said act being the cure for too much borrowing with funny money.

John

Now we're doing ten times more of the same...

...hoping the outcome will be different.

Change we'll have. From bad to worse is change.

None of these is true laissez-faire capitalism. Government interference is what screws it up.

That, and unionism: "Since we're not good enough to compete, let's just gang up on our employer and _extort_ the money we want."

Hope This Helps! Rich

Everybody avoids the real answer - stop ripping off the wage-earners and giving handouts to the unproductive and crooked.

Cheers! Rich

I seriously doubt if you'd find one that even knows what it IS.

Thanks, Rich

If they really wanted to stimulate the economy, they'd get rid of the withholding tax.

Cheers! Rich

One of the definitions of insanity is doing the same thing(s) and expecting different results.

Cheers! Rich

Just make 'em SMALL. A large cross-sectional area is a serious drag.

Jim Thompson wrote in news: snipped-for-privacy@4ax.com:

in more ways than this one! ;-)

Richard The Dreaded Libertarian wrote:

This is the best description of the problem I have seen in so few words.

It does, however, fail to mention the lack of mandated oversight:

I know. I know. I still think like an 18 year-old... then I falls asleep ;-)

...Jim Thompson