feedback

i'm not an economist. and just like the economists, i don't understand how the economy works.

but fortunately i don't have to understand how the economy works. i'm only a systems engineer. i merely need to envision a system to understand something.

"feedback" is one of those things we know is good for us, but we don't often like, or necessarily pursue. in this sense, we're talking about negative feedback, which is almost never perceived as good. positive feedback is perceived as good. or at least happier.

but from a systems perspective, the opposite is true.

negative feedback is extremely important to the stability of systems (of which, nearly anything can be viewed as). and it'd be really cool - for it to get a good wrap at a gut/intuitive level.

amplifier design, for instance. the goal here is to take an itty bitty electrical signal of only a few milli-volts amplitude and power measure in milli-watts, and amplify that signal so that it has a much larger amplitude and much more power, to drive big speakers that push lots of physical air. especially for our beloved 'merican subwoofers. making a bitty signal big is fairly straightforward. the magic is in harnessing that power so that it doesn't get too big, and in essence pulling that signal gain down in an accurate way so that the amplifier doesn't blow up to infinity when you turn it on.

negative feedback is crucial to life: e.g. a friend of mine thought of leprosy patients - those who loose the negative feedback of pain... another perfect example.

positive feedback on the other hand, is unstable. i can't really point to a common shared example of positive feedback because those systems are inherently unstable - that is, they blow up. a nuclear weapon is about the only example i can think of. like i said, boom.

so, turns out our tinkerbell economy seems to be exhibiting all the signs and symptoms of a positive feedback system. that is when speculators feel good about things, our economy does better, so they feel better, so it does better... until your head explodes. but say, for some reason, those speculators don't feel good about things, well, our economy does worse, so they feel worse, so it does worse... until your head implodes. i betcha there is a clinical psychological term for someone who exhibits these kinds of behavior. and i'm sure its a long one.

i can't help think, and for a long time now, that our economy is a house of cards. who among us can understand this crap - let alone its implications? the big guys at the top only care about one thing - and they don't care *how* because everyone is in it for the short term returns. except us. so, on this point: i'm not exactly disagreeing with bush - our economy does self correct. it's just that were not letting it. because they've got us by the gonads.

would somebody please build an inherently stable financial system. please? one with negative feedback applied to the more sensitive areas of those who benefit from risk. thank you.