The Foreclosure of America

Adam
I heard you on the Brian Lehrer show on WNYC in NY, and thought one of your questions was possibly one of the ‘breakthrough’ questions I’ve come to recognize.

I’ve been studying the subject of natural system growth and collapse, as a physics phenomenon, for 30 years, and have learned to appreciate “asking the dumb questions”. I think you said “we need to find out what causes bubbles”. That’s the remarkably obvious question we have all needed to be asking, but no one has. What get’s blamed, usually the buzz words used in the news feed, is usually what the conversation picks up as “the cause”. You noticed that most everyone from top to bottom involved in the housing bubble, in particular, was really doing what they thought was right. There really were no cheaters with the power to have such a history changing world wide effect. Healthy systems are able to absorb all kinds of unexpected surprises, and share resources without a hitch to level things out.

There’s actually a clear and specific answer to your question about “what causes bubbles”. It’s remarkably simple. The most general valid answer is that they are caused by any plan to insure continual compounding returns. That’s behind every single one on them. It’s like trying to build an ever taller building on the original foundation, assuring that a point of failure will come. Plans to insure compound returns, I’m sure you know, are built into many of our economic institutions and long range plans. That’s why the problem keeps coming up. There are solutions from an equally clear headed point of view

The cause of the bubbles is the pump that inflates them, and that it does not turn off before the system being inflated fails. It has to do with the natural limits of physical systems, of any and every kind. Bubbles are not caused by the ‘cracks in regulation’ or the ‘errors of individuals’ that become noticed as the bubble systems fail. Learning to live within our means only seems to mean rethinking the earth as a home, instead of just another thing to use up ever faster.