So, I got up this morning and looked at the news -- a major earthquake in Japan, 8.9 magnitude, tsunami warning, tsunami damage, all the "good" stuff that no one wants to see happen. The latest is that Hawaii is under a tsunami warning, with no one sure of how big it will be when it hits. Obviously, the thoughts, and prayers or well-wishes, of the world are with the people in the Pacific Rim.
Most people are familiar with "Black Swan Theory," wherein there are major turning points of history that no one could've predicted or expected, a "Black Swan" event. We seem now to be in a time when we're seeing one event after another -- the manmade ones of Middle East civil war and the crash of 2008, now the various extremes of the natural world, from poor crop yields from strange weather, and strong earthquakes.
Japan, of course, is used to its position of being a modern nation on a seismically active island. Still, it is sobering to see the damage caused and read about the deaths in a place we always think of as being an orderly, efficient and well-run sort of place. Things, of course, will return to normal sooner or later, or so we would expect.
However, human society is a complex series of systems, social, religious, political, economic, and so on, and this earthquake is coming at an unstable time. When energy is injected into a complex system, strange and unpredictable things may happen. Just as we didn't expect that the triggering event for the next dip of the multi-dip recession would be caused by a Tunisian fruit seller who had lost his fruit cart, then his will to live, we may not yet see what the real effect of this event is, either, for some time. How bad will the economic fallout be? Will a political crisis somewhere be caused by this, which will spiral out of control like the Middle East has? Will this be another triggering event of the total collapse of modern industrial civilization?
In the meantime, we can only watch and see what happens, prepare and take information in as it becomes available, and help the best we can, either financially or physically.
We all must feel great sorrow at the loss of life in Japan and the difficulties the Japanese will face in the days ahead. Its too early to assess what the short & long term fallout will be for the Japanese economy and the impact it will have upon the global economy. It seems there are a lot of idiots out there espousing the 'broken window' theory that the events in Japan will have a positive effect upon the Japanese economy and the global economy in general. Balderdash! Beyond the human tragedy and suffering, this can not be good news to a shaky global economy that is struggling to come to grips with the recession of 2008.
ReplyDeleteFrom my POV it looks like we may be heading towards a perfect storm: unrest/revolution in the Arab nations, devaluation of the US dollar and the eventual (soon) demise of the dollar as the global reserve causing a rise in commodity prices, and now the 3rd largest economy hit by a tragedy that will probably cause a multi-trillion (mega-yen) loss in Japanese GDP.
2011 is shaping up to be an interesting and perhaps historic year.
I think many people are reaching a consensus on what this means and how it really is shaping up to be a perfect storm (my latest post covers this).
ReplyDeleteThank you for bringing up the "broken window" fallacy. Keynesian economics is one of those goofball ideas that seems to persist, even when the Keynesian ideas keep failing on a large scale. All the money put into fixing the window can't go anywhere else to do anything of progress. Of course, I think we've pretty much settled into being a "maintenance economy" by this point anyway, where the economy's purpose has become to provide comfort and consumable goods as opposed to making forward progress into new technologies, space, etc.
-John
2.30 pm, UK - Just saw 3 black swans flying over my garden. hmmm
ReplyDeleteA year has passed. What did we learn from the earthquake and tsunami in Japan?
ReplyDeleteI think a quick cursory glance at how the Japanese behaved compared to how Americans behaved during and after Hurricane Katrina are telling. Not all the people of the world are going to resort to barbarianism when confronted with 'Hard Times'.
Culture, will be a strong support to survivability. The Japanese have displayed that cultural quality during the immediate after shocks (pun intended) as well as during this past year. The Americans also displayed what their culture is likely to bring under similar stresses.