Put another way, Simon Johnson is saying that Orientation (in the form of rigid pre-conceptions) is shaping the Observations as well as the Decisions and Actions (made in response to those observations). Any student of nonlinear dynamics and control theory will tell you that when a positive feedback loop like, Orientation’s positive shaping effect, is pumping without interruption into a negative feedback control system, the entire system spins out of control and its outputs become increasingly disconnected from the real world environment that system is struggling to cope with. The inevitable result is chaos — full stop, end of story.
By Simon Johnson, Basline Scenario, 26 Jan 2010
Following President Obama’s State of the Union address, there is a great deal of discussion about whether we might now be edging our way towards fiscal responsibility.
Unfortunately, most of our political elite – both left and right – is still living in a land of illusions. They cannot even seriously discuss what would be required to bring our true fiscal position under control – remember that most of the recent damage to our collective balance sheet was done by big banks blowing themselves up. No one who refuses to confront the power of those banks can be taken seriously as a fiscal conservative.
Even those interest groups that prominently espouse fiscal responsibility refuse to confront this reality. There are no fiscal conservatives in the United States; at this stage it is all pretence.
Pretence is apparently all we are likely to get, as long as the money keeps rolling in (see Argentina for details).