In my previous post I concluded that it may take a cataclysmic event to restore sanity to our nation. I’m not talking about the price of eggs or gas skyrocketing, or store shelves being empty for a few days. I’m talking about something that will cause even the most dumbed-down, brain-addled, handheld-screen-addicted person to pick his or her head up and say, “Wow, maybe some things are more important than what the Kardashians are up to this week!”
I’ve long said that Economics is the dismal science, an academic exercise in futility, and while it may be fun and may earn a whole raft of propeller-heads an income, even wealth, it’s really only mental masturbation of the highest order.
Why do I say this? Because economics deals with building “models” that describe what the panoply of pulled levers have caused in the past with the hope that those models will help us predict the future. The fundamental problem with these models, however, is that they depend on two flawed assumptions: 1) the “rational man” and 2) the “absence of an outside shock”.
In case you haven’t been paying attention let me state the obvious:
First, there is no such thing as a rational man (or woman). All human beings are driven, at least in part if not entirely, by feelings, perceptions, etc., what I’d characterize as “squishy stuff”, NOT rational, analytical thought.
And, as we have all seen, “outside shocks” OCCUR ALL THE TIME! They differ in magnitude, of course, but they destroy models’ explanations of the past and their usefulness as predictors of the future.
Nevertheless, thousands of economists and bureaucrats pontificate endlessly on the overarching topics that impact our daily lives and GET PAID TO DO SO! Sometimes they’re right, more often they’re wrong, but they persevere.
In his famous book, Nassim Nicholas Taleb defines a Black Swan as an improbable event with three basic characteristics: it is unpredictable, it has massive impact, and after the fact, explanations are concocted to make it appear less random.
Examples of past Black Swan events include: the 2000 Do-Com Crash, 9-11, the Fall of Lehman Brothers, the Fukushima and Chernobyl nuclear Disasters, BREXIT, and most recently, COVID.
None of these were severe enough to wake people up. The effects, though severe, were not of such duration that people got serious about paying attention to things that matter.
Now we’re sufficiently far down the slippery slope, there is sufficient chaos, there is enough “information” flak in the air, that only a really BIG Black Swan of significant duration will, in my opinion, bring us back to REAL Reality!
So, what might such a Black Swan consist of?
China invading Taiwan
Israel nuking Tehran
The North Koreans launching a nuke at Japan
The San Andreas fault creating Nevada beach-front property
Tactical nukes get used in Ukraine
NATO deploys troops to Ukraine
The Stock Market crashes
The Yellowstone Volcano erupts
Biden resigns and Harris becomes President and Michele Obama becomes Vice President (threw this one in because it is such a frightening nightmare!)
A terrorist attack on the 9 key substations takes down the electrical grid for from 3 months to a year
Another, more deadly virus gets out of a lab
A coronal mass ejection REALLY hits Earth and wipes out much of what is electronic
I could conjure up more… These are just some “known unknowns”. A Black Swan is by definition an “unknown unknown”!
That one about a protracted blackout is the one that worries me the most. Three weeks without electricity and we’re in trouble. Three months without electricity and we’re in a shit-hit-the-fan, possibly even TEOTWAKI (The End of the World As We Know It) situation. I urge my readers to think about this stuff. The time to prepare for a Black Swan walking up your driveway isn’t after it’s already at your front door. It’s not as if we haven’t been forewarned and as if we don’t see how vulnerable our country and society is.