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The word you're looking for is overoptimization. We built and optimized a system around the "happy path" but in doing so we cut off our fallbacks for less optim

The word you're looking for is overoptimization. We built and optimized a system around the "happy path" but in doing so we cut off our fallbacks for less optimistic scenarios. This is market capitalism unrestrained. Any measures in place to account for "black swan" events get optimized out of existence in the name of short-term efficiency. And why shouldn't they when the government has shown that they will bail out companies over and over?

PaulDavisThe1st 6y ago
The over-optimization is a part of it. But millions of people livelihood being dependent on, as someone posted above, "the same $300 moving from one person to another over and over again" is also a big contributor. We also have so little in the way of economic self-reliance anymore, at almost any scale. Certainly not individual or familial (which might not be a good goal anyway), but also not at neighborhood, community, city, state and to some extent even national scales.
- wayoutthere 6y ago
  I think this gets at another issue: our economy has a lot of pointless, redundant jobs that only exist because the economy needs to keep people employed. Cheap money policy at the fed was always intended to minimize unemployment, but many of those jobs were unnecessary. Those jobs won't survive the next couple years. The flip side of cheap money is inflation, and it's been building up in the economy since the 2007 crisis. The inflation has been hidden by stagnant wages and falling commodity prices from globalization, so it's led to "top heavy" inflation -- the value of a dollar has been shrinking as the supply of dollars has increased, but that extra supply of dollars has been almost exclusively concentrated in equity markets. Prices of goods have remained in check because the vast majority of people simply don't have access to most of the new money. See also all the US companies sitting on hundreds of billions in cash, stock buybacks, and corporate debt. I believe the US has 2 economies: one denominated in dollars, the other denominated in millions of dollars. It wasn't seen as "inflation" because most of the inflation indicators used by the federal reserve target the consumer economy. I think we're about to have a really bad decade as all this starts to unwind. The housing market is the first place this will hit (and we're seeing it already); capital will start to flow into REITs buying up residential properties and we'll see prices stay high even or even rise in an economy when they shouldn't be. All but the wealthiest individuals will be priced out of the market (this is already the case in many cities). That means more renters, higher rents, and zoning laws that prevent new housing starts. The two economies will start to bleed together in the margins between the millionaire economy and the individual economy -- with disastrous results for the people of the country.

PaulDavisThe1st 6y ago

The over-optimization is a part of it. But millions of people livelihood being dependent on, as someone posted above, "the same $300 moving from one person to another over and over again" is also a big contributor. We also have so little in the way of economic self-reliance anymore, at almost any scale. Certainly not individual or familial (which might not be a good goal anyway), but also not at neighborhood, community, city, state and to some extent even national scales.

wayoutthere 6y ago
I think this gets at another issue: our economy has a lot of pointless, redundant jobs that only exist because the economy needs to keep people employed. Cheap money policy at the fed was always intended to minimize unemployment, but many of those jobs were unnecessary. Those jobs won't survive the next couple years. The flip side of cheap money is inflation, and it's been building up in the economy since the 2007 crisis. The inflation has been hidden by stagnant wages and falling commodity prices from globalization, so it's led to "top heavy" inflation -- the value of a dollar has been shrinking as the supply of dollars has increased, but that extra supply of dollars has been almost exclusively concentrated in equity markets. Prices of goods have remained in check because the vast majority of people simply don't have access to most of the new money. See also all the US companies sitting on hundreds of billions in cash, stock buybacks, and corporate debt. I believe the US has 2 economies: one denominated in dollars, the other denominated in millions of dollars. It wasn't seen as "inflation" because most of the inflation indicators used by the federal reserve target the consumer economy. I think we're about to have a really bad decade as all this starts to unwind. The housing market is the first place this will hit (and we're seeing it already); capital will start to flow into REITs buying up residential properties and we'll see prices stay high even or even rise in an economy when they shouldn't be. All but the wealthiest individuals will be priced out of the market (this is already the case in many cities). That means more renters, higher rents, and zoning laws that prevent new housing starts. The two economies will start to bleed together in the margins between the millionaire economy and the individual economy -- with disastrous results for the people of the country.