Saturday, April 10, 2010

"soaring profits and obscene bonuses"

What is a "Soaring profit, or Obscene Bonus" Mr. Obama declared himself ready to have a fight with the day after his State of the Union address. I'm comfortable with engineering terms so lets think of speed governors and control systems. Automatic control systems weather natural or man made (they're everywhere. Cruse control, The thermostat in your house, the thermostat set on 98.6 in your body.) must have some negative feed back loop. It's like this, Car to fast = negative input car slows down, and vice versa. Pure profit is simply the Negative Feedback (opposite in direction to the movement of the controlled condition) to a part of the economy be to small. It is natures eloquent little solution to supply both the means and motivation for building larger the industry in question, as well as related and competing or substitute industry.

Put more succinctly, "Nothing cures high prices, like high prices." We should celebrate when our fellow Americans and, indeed, Humans make a sound profit. We can only be enriched.

What if we control manually. Say your shower is to hot and groping for the faucet you turn it still hotter, or flying a model airplane towards your self you needing opposite normal inputs thus your bank left leads to an apparent right bank to which the response is to move the stick still farther left. It's called a death spiral. This is what will happen to the Economy if Mr. Obama responds manually to a need for growth by artificially crushing Profit.

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