A Nearly Perfect System 

After Paul Krugman’s essay, “How Did Economists Get It So Wrong?”

Beauty might be mistaken for truth on a Grecian Urn 
but for beauty to fool us in the guise of elegant 
mathematics takes another kind of faith. 

I built an equation to predict 
the outcome of our love. I calculated 
Not Happy and I sent it to him. He added 
a variable for the suspension 
of disbelief. 

There are limitations to human rationality 
(that often lead to bubbles and busts), 
THERE ARE IDIOTS. Look around. 
There are noise traders, Not Rational, not motivated 
by a compulsive need to explain everything in equations. 

Some truths can be revealed with mathematics and 
others just need to be lived -- these are truths 
you know are true just lying on the couch smoking 
seedy marijuana. But even when you step out into the world, 
inductive reasoning can fail. The black swan, 

red billed, s-necked, fat-tailed 
with very large kurtosis did not 
exist until 1790. An Englishman 
could lie on his couch and know 
that all swans were white 

but real life is not normal, does not follow the norm- 
al distribution, cannot be proven to be significant in a universe 
that considers the known unknown but ignores 
the unknown unknowns that will sometimes prove themselves 
to be a water bird living somewhere in southwest Australia. 

If irrational exuberance is what we feel 
in a new relationship when the cardinality 
of a set of two is more than | love |, then 
that is the value of the suspension of disbelief. 

But when zero interest isn’t low enough to stimulate 
something flagging, does not bring us back 
to where we need to be, is there a negative rate -- 
can you go negative into the future or is that 
only an abstraction for those in love with reason. 

If we are rational there is no need to create a variable 
for hope, but sometimes our impulses run through us 
like water and I know now that falling water 
creates bubbles; 

When I stood beside the waterfall 
I slipped on wet rock and 
to avoid falling, I stepped towards white stone
but it was really only froth and
I landed hard in the cold stream. 

Too much liquidity 
is said to create bubbles, 
a sort of irrational exuberance 
that leads the idiots like lemmings 
but also leaves the economists, 
after the bust, the burst, the break up, 
building equations to incorporate our own dysfunction. 

by Alexis Fedorjaczenko, 2009