And it’s hard to say for certain if these fires are directly related to the epic drought that the West is currently experiencing.
Some say it’s early in the year for this many fires. Others say it’s normal.
I couldn’t help wonder if it all wasn’t some kind of sinister distortion emanating like the Keynesian ‘broken window fallacy’ resurrected.
The parable of the broken window was introduced by Frédéric Bastiat in his 1850 essay Ce qu'on voit et ce qu'on ne voit pas (That Which Is Seen and That Which Is Not Seen) to illustrate why destruction, and the money spent to recover from destruction, is not actually a net benefit to society. The parable, also known as the broken window fallacy or glazier's fallacy, seeks to show how opportunity costs, as well as the law of unintended consequences, affect economic activity in ways that are "unseen" or ignored.
The problem is that we endure these seasons to begin with. Very much like the booms and busts brought about by artificially induced credit cycles. And the slow, boiling inflation that cooks us like frogs.
Nature has been distorted on so many levels that it is difficult keeping track of it all. Our interventions are largely based on the erroneous belief that we actually know what we are doing. In fact, most of what we eventually learn comes accidentally, in the wake of disasters.
Instead we are in simply reduced to experiencing and adapting to cycles created by extreme intercession.
Repairing symptoms from diseases that we unleash. As we go on, more and more resources are needed to fight the disasters.
Some seasons are normal. But the seasons of today, both fire and economic, are anything but.
In terms of fire, there is the normal forest fuels accumulation.
Nature has evolved to depend on it for restructuring the soil. There are seeds that require the scarring in order to germinate.
Yet civilization has fought this. We build instead. We ignore the dangers, and then invest in protecting the life and property.
This is not limited to forests. Whether it’s 5000 square foot house “(insured)” on the beach in the middle of Hurricane ally or the cottage in the woods. Or building entire communities on a fault line.
The same goes for financial intervention and the trillion dollar band-aids and bailouts.
Financial fuels consist largely of untested or misapplied philosophies that ultimately lead to massive market distortions. The build up of unsustainable public and private debt. The slow destruction of a workforce. The breakdown of the economic engine underlying real, organic economy.
The disenfranchised, the disengaged are left with bread and circuses. Civic, societal participation splinters off into all manner of dark corners.
We can blame it on the great ‘100-year financialization of everything’. It grew from intervention and from one disaster to the next - to save us from doom. Turning every asset - real or imagined - into ‘securities’ that are collateralized, re-hypothecated, and lost in a world of derivatives that will only be sorted out as they burn in default.
Natural systems move back and forth toward equilibrium. Behavioral systems also eventually succumb to physical laws.
In the era of high speed, fully automated, programmed trading, there is no human market maker. Once the algos are triggered, they all sell into a vacuum. The bottom suddenly drops out. And we experience four thousand tiny flash crashes in a moment like the one we observed on August 24th.
There was something ominous about these firefighters — all brought in from New Mexico — having been camped out in make shift areas the previous night.
They were worn out, yet prepared for one kind of disaster. Unlike 99.9% who are ill-prepared a whole other impending crisis.
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