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Why are depressions and financial crises like forest fires?

Do we really believe Paul Krugman is smarter than Issac Newton? (How about Benoit Mandelbrot?)

The new policy of unlimited quantitative easing is an experiment. If those theorists of insufficient aggregate demand are right, then the problem will soon be solved, and we will return to strong long-term organic growth, low unemployment and prosperity. I would be overjoyed at such a prospect, and would gladly admit that I was wrong in my claim that depressed aggregate demand has merely been a symptom and not a cause. On the other hand, if economies remain depressed, or quickly return to elevated unemployment and weak growth, or if the new policy has severe adverse side effects, it is a signal that those who proposed this experiment were wrong.

Certainty is something that economists in particular should be particularly guarded against, even as a public relations strategy. Isaac Newton famously noted in the aftermath of the South Sea bubble that “I can calculate the motion of heavenly bodies but not the madness of people.” In the sphere of human action, there are no clear and definitive mathematical principles as there are in astronomy or thermodynamics; there have always been oddities, exceptions and quirks. There has always been wildness, even if it is at times hidden.

So we shall see who is right. I lean toward the idea— as Schumpeter did — that the work of depressions and crises is clearing out unsustainable debt, unsustainable business models, unsustainable companies, unsustainable banks and — as much as anything else — unsustainable economic theories.
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They're not like Forest Fires because we actually tend to listen to those who know how to properly fight forest fires. :)
And how to properly not fight them. 

An increasingly familiar image of America's Golden State is of water-bombing aircraft dousing the flames as they lick around million-dollar mansions on the hillsides. But in Yosemite National Park, in central California, fire is viewed differently. The forest needs to burn to survive, although fire was once thought to be an enemy of the region's giant sequoia trees.

People used to think that the park's beautiful trees needed to be protected from fire, according to Gus Smith, a fire ecologist. "I think that we need to see more fire and the benefits of fire. Fire looks destructive and dangerous and would kill organisms made out of wood," he says.

For decades, through public service messages, people were encouraged to believe that all fires were bad. Aggressive measures were taken to fight fires, since the perception was that the flames were a wholly negative force in the national park. The Smokey Bear campaign, which started in 1944, promoted the message: "Only You Can Prevent Forest Fires." Using colourful posters, it was an attempt by the US forest service to educate Americans about the dangers of forest fires.

But scientists have come to realise that years of suppressing fire in Yosemite prevented the trees from reproducing...
So we've accumulated decades worth of fuel bad decisions, bad practices, and various distortions in incentives that normal sane markets would have burned cleared out.  By suppressing those normal small forest financial fires we get the large forest economy destroying financial wildfires.  Human economies as systems are much like natural ecosystems in how they function.
Okay I'm liking this metaphor more and more as we talk about it.  :)
I figured you'd figure it out. Given sufficient background. :-)
+James Yee This may be more than a metaphor.  There may be some degree of isomorphism between ecosystems and human economies.   If that is true then as we learn more about one, we also learn more about the other.  I'm not sure that practicing economists and ecologists would see it that way, but as an interested observer of both disciplines, I think there may be some truth to it.
I don't believe he's any smarter than me.  I don't have a nobel prize, but I'm smart enough to know that you will never have the computing power to do what hundreds of millions of people are doing every second--computing the value of thousands of different options in their heads.  All you need to know about economics is that--government will never be able to make good economic policy because it's impossible.  Facilitate free trade, help with the peaceable enforcement of contracts and prosecution of fraud.  That's it.  No amount of book learnin' is ever going to come up with a smarter solution than that.
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