The Limits of Predictability

[peristaltor]

Over a year and a half ago, the economics blog Calculated Risk posted this handy chart:

Comments

[a_new_machine]

I think more accurately it's "We might be up Shit Creek. This sure looks a lot like it, but we've never been here before, so this could also be Turd River, or Excrement Lake. Either way, the boat's leaking."

[peristaltor]

Well put.

QOTD?

[rick_day]

damn...wish I said that...

did you get it off an old Moms Mabley comedy album?

[htpcl]

Granted!

Next best thing to winning!

[rick_day]

[mahnmut]

Gee, I need a shower.

shower? wrong end.

[rick_day]

In the US, we call that "toilet paper"

[peristaltor]

Given the analogies, you might not want to open that particular spigot.

[papasha_mueller]

OK, you stay corrected.
On the serious side - don't you think that this theory could benefit from adding the post-ww2 recessions in UK, Germany and France?

[a_new_machine]

Maybe. Those were rather unique in that their entire manufacturing base and most of their cities had been shelled into oblivion, though. Ours started because we had too many buildings, theirs because they had too few...

[peristaltor]

Europe in general decided high gas taxes were a good thing after WWII. As a result, they didn't massively build infrastructure that proved as auto-dependent as the US. As a further result, their economies prove far more resilient to gas price shocks.

I'm not saying they aren't completely immune to price increase shocks; far from it. The extremely low taxation of US fuels, though, provides an interesting case in point demonstrating how a complex system can be constructed over time.